Debt Collection Agency Colombia
Amicable Debt Collections Colombia
1. General information
We provide debt collection services with extensive local expertise in order to fulfil our clients’ needs, focusing on the relationships between our clients and their debtors at all times.
1.2. Local agents
We work with a range of certified partners to supplement our local knowledge and expertise.
They complement our global presence, helping us satisfy our clients’ needs wherever they are in the world. Our local partners are located in Bogota.
They consist of an experienced team of professionals specialised in business advice and problem solving, taking advantage of the capacity and knowledge of each of their members.
Usually during the amicable phase, debtors are charged with an interest rate not exceeding 1% per month. Meanwhile, in order to have the interest paid, our clients are obliged to provide an official document, such as a debit note.
1.4. Debt collection costs Colombia
During the amicable phase, this is a matter of negotiation. From a cultural point of view, Colombian debtors are not used to paying debt collection costs.
2. Legal Debt Collections Colombia
2.1. General information
We take legal action when all approaches have been exhausted in the amicable phase. The legal actions will be carried out orally, publicly and in hearings, except for those expressly authorised in writing or are protected by reservation.
2.2. Required documents
The documents required to proceed with legal procedures are:
- A notarised power of attorney with an apostille
- The proof of the existence and legal representation of the creditor (constitutive acts)
- Invoices or promissory notes
- The bill of lading
- The purchase order
- Other original documentation, such as contracts.
- The copies of the documents that are intended to be used as a title executive will require proof of their requirements.
- The power of attorney that 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
It is a formal act designed to prove the default of an individual when they have a formal debt. This procedure is only applicable for monetary (bill of exchange).
An official documentation will be delivered to the debtor to be considered and stamped with the expression “Protest”.
The debtor can appeal in the legal phase, which would then transfer the dunning procedure into a regular lawsuit procedure.
2.4. Lawsuit in Colombia
The lawsuit must fulfil some requirements, such as the designation of a judge, what is intended in the legal proceedings – expressed with precision and clarity, the fundaments of the law, among others.
At the moment of the presentation, the secretary will verify the accuracy of the documents. If they are not in accordance with the originals, they will be returned to be corrected.
The judge will admit the demand that meets the requirements of the law, and will approve the proceedings that legally correspond.
2.5. Debt collection costs Colombia
Initially, the costs of the formal presentation of a judicial action, whether executive or ordinary, are around 2% of the total amount to be claimed. However, they can vary on a caseby- case basis.
If this action must be initiated in a jurisdiction other than Bogota, the initial costs can be increased.
2.6. Expected time frame
The average duration of a legal process depends on the complexity of the case, as well as the availability of the judge and the lawyers on all sides. It can last anywhere from several months up to a few years in proceedings execution.
2.7. Interest and costs in the legal phase
Interest and extrajudicial costs may be charged as part of the legal claim. Judicial costs must be clearly established. Although 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 Colombian law, debtors are generally able to begin insolvency proceedings when they are no longer able to pay their debts as they are due.
Debtors may file for both liquidation and reorganisation through the insolvency proceeding or the reorganisation proceeding. The objective of the procedure is to preserve the company, the protection of credit and the conservation of the company as an economic exploitation unit.
Along with the opening of the reorganisation proceeding, there should be an indication of the existence of the cessation of any payments older than ninety days, or any obligations in favour of two or more creditors or the debtor, or there are at least two legal suits filed by two or more creditors for the payment of the obligations.
Once the request for a reorganisation process has been received, the judge will verify the legal requirements and judge if it is in accordance with the law.
The insolvency proceeding will end in case of any of the following events: The fulfilment of the obligations agreed or The failure to comply with the obligations not resolved in the hearing, where the judge will declare the bankruptcy.
3.3. Required documents
The required documentation is advised to be original, such as the invoices (90 days due), the bill of lading, promissory notes and a power of attorney.
The power of attorney that 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 the credit is usually between two and six months after the insolvency requirement.
The duration of an insolvency proceeding is usually between four and ten years, starting with the payment procedure. The law does not set limits for either the payment plan or debt settlements.
Colombia is a country located in northwestern South America, with a population of over 50 million people. Its capital city is Bogotá. Colombia is divided into 32 departments and a capital district. The government of Colombia is a presidential representative democratic republic. The official language of Colombia is Spanish, and the currency is the Colombian Peso.
It may be somewhat difficult for a foreign business to collect debts in Colombia, as the process may be unfamiliar and may require navigating the local legal system. It is generally recommended to seek the assistance of a local debt collection agency or legal professional to help with the process.
Debt collection agencies have been operating in Colombia for several years. There are a number of such agencies operating in the country, offering a range of services to help businesses recover outstanding debts.
The national credit bureau in Colombia is the Central Credit Bureau of Colombia (Cifin). Some private credit reporting companies operating in Colombia include Dun & Bradstreet, Experian, and Equifax.
Debt collection laws in Colombia are generally the same throughout the country, but local laws may also apply in certain cases. It is important for businesses to be familiar with the relevant laws and regulations when attempting to collect debts in Colombia.
There are several benefits to using commercial debt collection services in Colombia:
- Expertise: Debt collection agencies have a wealth of experience and knowledge when it comes to recovering outstanding debts, and can provide valuable guidance and assistance throughout the process.
- Efficiency: Debt collection agencies are typically able to recover debts more quickly than businesses attempting to do so on their own, as they have the necessary resources and expertise to pursue debts effectively.
- Legal support: Debt collection agencies are typically able to provide legal support and representation if necessary, helping businesses to navigate the legal system and pursue debts effectively.
- Language support: Many debt collection agencies in Colombia have multilingual staff, which can be useful for businesses attempting to recover debts from clients who do not speak Spanish.
- Cultural understanding: Debt collection agencies operating in Colombia will have an in-depth understanding of the local culture and business practices, which can be helpful when attempting to recover debts from Colombian clients.
- Improved cash flow: By recovering outstanding debts quickly, businesses can improve their cash flow and financial stability.
- Increased profitability: By recovering debts that may otherwise have gone uncollected, businesses can increase their profitability.
- Stress reduction: Using a debt collection agency can help to reduce the stress and time involved in attempting to recover debts on one's own.
Our debt recovery agency has a very high success rate in Colombia thanks to our multilingual debt collectors located in the country and our 24/7 online debt recovery report website. We have local debt collection managers in the main cities of Bogotá, Medellín, and Cali.