Debt Collection Agency Argentina
Amicable Debt Collections Argentina
1. General information
We provide debt collection services with extensive local expertise in order to meet clients’ needs. We contact debtors verbally and in writing with a proactive and objective approach, aiming to maintain the relationships between our clients and their debtors at all times.
1.2. Local agents
We work with a range of selected partners to supplement our local knowledge and expertise. They complement our global presence and help us meet our clients’ needs wherever they are located in the world. Our local partners are based in Buenos Aires city. If necessary, we can visit debtors at their own local addresses; however, the travel costs must be covered by the client.
Usually during the amicable phase, debtors are charged with a rate not exceeding 1% per month. Meanwhile, in order to have the interest paid, the client is obliged to provide an official document such as a debit note.
1.4. Debt collection costs
During the amicable phase, this is a matter of negotiation. However, the collection costs cannot be added to a case unless a signed contractual agreement exists between the debtor and the client. From a cultural point of view, Argentinian debtors are not used to paying debt collection costs.
2. Legal collections
2.1. General information
We take legal action when every approach has been exhausted during the amicable phase. The debtor is considered in default through a registered letter, which, although is mandatory to proceed to the legal route, is a formal notice recognised by the law as evidence.
2.2. Required documents
The documents required to proceed with legal proceedings are:
- A notarised power of attorney with an apostille
-Original invoices or promissory notes
-Bills of lading
-Other original documentation, like the contract between the client and the debtor.
-The power of attorney, which represents the client, must be written or translated by a public translator to the local language (Spanish), granted before a notary and legalised by an apostille.
2.3. Legal dunning procedure
Regarding the commercial law in Argentina, a shorter process than an ordinary lawsuit can be initiated only when there is an executive title – a title or negotiable instrument that implies its execution. These are promissory notes, checks and agreements, in which the debtor recognises their debt before a notary, or judicial warrants that order the debtor to pay the debt.
Argentina follow a Civil Law System, which is divided into: Federal Courts, which are organised by the federal government Provincial Courts, which are organised by each province Courts of the City of Buenos Aires, which although being called ‘national courts’, have jurisdiction only in the city. Prior to this instance, the law requires a compulsory mediation. If the mediation is not successful, the trial begins and legal fees are to be paid in advance. Typically, the trial goes through a long evidentiary stage.
2.5. Debt collection costs
Initially, the costs of the formal presentation of a judicial action, whether executive or ordinary, range from 3% to 5% of the total amount to be claimed. If this action must be initiated in a jurisdiction other than Buenos Aires, the initial costs may reach up to 5%.
2.6. Expected time frame
In the event that it is feasible to initiate an executive action, the process may run until its completion during a period no longer than three years. When it is necessary to appeal to an ordinary trial, with a long evidentiary phase, it usually takes more than three years.
2.7. Interest and costs in the legal phase
Interest and extrajudicial costs may be charged as part of the legal claim. Extrajudicial costs must be clearly established. Although the interest rates agreed by the parties are usually accepted, the judges have the power to modify them if there is evidence of disproportion or unjustified enrichment.
3. Insolvency proceedings
3.1 General information
Under Argentinian law, debtors are generally able to begin insolvency proceedings when they are no longer able to pay their debts as they are due. The debtor may file for both liquidation and reorganisation through the insolvency proceedings or the reorganisation proceedings. The debtor submits an offer or proposal for payment, which generally consists of debt settlements, to the approval of the majority of the creditors. It should be noted that the filing of insolvency proceedings interrupts the course of credit interest. If the debtor’s proposal is not approved and they simply cannot continue to operate, then the bankruptcy is declared, which is intended to liquidate the debtor’s assets and distribute the revenue among the creditors. In this procedure, the creditors rarely receive dividends.
Along with the opening of the reorganisation proceedings, a controller authority trustee is appointed to the proceedings, and deadlines are established for the filing of credits. Creditors whose credits have been admitted to the debtor’s liabilities must then approve or reject the debtor’s proposed payment, which will be extended to all creditors. In the event of not obtaining the legal majorities, the debtor’s bankruptcy will be declared. The debtor’s assets will be liquidated and dividends will be distributed among the creditors.
3.3. Required documents
The required documentation is advised to be original, such as the invoices, bills of lading, promissory notes and the power of attorney.
The power of attorney, which represents the client, must be written or translated by a public translator to the local language (Spanish), granted before a notary and legalised by an apostille.
3.4. Expected time frame and outcome
The deadline for submitting credits is usually between two and six months, after the insolvency requirement. Theduration of insolvency proceedings is usually between four and ten years, starting with the payment procedure. The law does not set limits on either the payment plan or the debt settlements.