Debt Recovery & Credit Collection in Italy
Italian Law provides the creditor with various legal instruments for debt collection. It is essential to analyze the situation and use the proper instrument, whether judicial or extra-judicial.
Letter of formal notice
First of all, it is wise to start by the extra-judicial procedure of debt collection, through the formal notice to the debtor. This is an essential step because it allows the dispute to be resolved without having to go before the Court, thus saving money and time.
In particular, this procedure consists in giving the debtor written notice (by registered letter with return receipt) asking to pay within a precise deadline. If the time limit runs without receiving the payment, then it will be possible to appeal to the judicial authority.
The letter of formal notice is not necessary when:
- The debt comes from illegal activity;
- The debtor declared in writing that he will not perform the obligation;
- The obligation was to be performed at the domicile of the creditor and the deadline has expired.
Order of payment
If the debt did not pay after the letter of formal notice, then the creditor can proceed judicially by means of an injunction.
This is the most common procedure and it consists in presenting to the Court the documents necessary to prove the existence of a claim against the debtor. If the judge recognizes the debt, the issued order of payment is temporarily enforceable.
Writ of enforcement
The debtor has 40 days to oppose the order, otherwise this is considered a fully enforceable judgement. The lawyer may ask the Court to attach the enforcement clause to the order of payment and thus issue the writ of enforcement.
This writ obliges the debtor to pay within 10 days, otherwise this is a title to seize his assets.
If the debtor did not pay within 10 days, enforcement shall proceed. Generally, enforcement start with the distraint, which consists of the seizure of the goods of the debtor.
The creditor must always pay attention to the prescription terms of the debt, beyond which it cannot be collected.