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I am a company from the United States, and they owe me money in Spain. How can I get my money back?

I am a company from the United States, and they owe me money in Spain. How can I get my money back?

When a company in the United States is owed money in Spain, the first question that we must clear is what the procedure is to follow to claim it. In this sense, it is important to know that apart from the rules of international legal competence, in private businesses it is common to establish submission clauses, which allow the parties to determine who will be the competent body in case of conflict. Added to this is the possibility that there are framework agreements or international treaties or sectoral legislation at stake.

Thus, analyzing who is the competent body to hear such a claim is a complex and casuistic task. Therefore, it is advisable to seek the assistance of lawyers specializing in international debt claims

Once the competent body is known, it will be necessary to determine which is the applicable law. However, procedural law tends to be that of the competent body. Therefore, it will be your national legislation that tells us how we should proceed to handle our claims.

In this article we are going to focus on a very specific case: that of a company in the United States that is owed money in Spain.

First step: determination of the competent body

Generally, the courts of the defendant's country are competent to resolve claims for quantity. However, this may vary in each case.

For example, the contract documenting the debt may include an arbitration clause. In this case, the controversy may have to be settled before the Arbitral Court designated in the contract itself.

It may also happen that the parties have agreed to submit to the jurisdiction of the State of one of them. This is common in framework agreements or when there is an imbalance of power between the parties. 

Since we are analyzing the case of a US company that is owed money in Spain, we will assume that it is the Spanish Courts that are competent to resolve. However, we insist on the importance of consulting this matter with a specialized office in the matter, detailing the circumstances of the case and providing documentation for a detailed study. If you have a company in the United States and a company in Spain or the European Union owes you money, contact Forcam Abogados, we take care of recovering the debts that exist between companies in the United States and companies located in Spain.

Second step: choosing the claim channels 

Once the jurisdiction of the Spanish courts is determined, the United States company must choose a claim strategy, with the help of its lawyer. Expert debt claims attorneys recommend starting with an out-of-court negotiation, leaving legal claims only for situations where it will not be possible to reach an agreement.

Extrajudicial claims 

Generally, when faced with a Private Law conflict, the best option is to seek an out-of-court solution. This begins with a formal and reliable claim. 

The mere submission of this communication will suffice to prove that we have tried to collect our debt before going to trial. What causes legal effects, such as the establishment of the debtor in default (although this claim is not always necessary for the debtor to be considered delinquent).

In any case, even if the debtor in Spain does not pay on this first claim, it would be convenient to invite him to negotiate. If you are not fulfilling your obligation because you do not want to do so, we will have to go to court.

But generally, debtors or defaulters are because they cannot meet their payment obligations. Given this, it is advisable to study whether your insolvency situation is temporary or structural.

In the first case, we can try to restructure the credit through a payment agreement to ensure that we collect it in full or, at least, for the most part. We can even claim late payment interest to make up for our wait. It is also possible to reconvert the debt. For example, accepting dations in payment, the transfer of shares or social participations or the issuance of bonds.

If the insolvent is not going to be able to recover, we will have to tread lightly. It is important to try to recover the credit before a ruinous liquidation (for example, in a bankruptcy or a discharge of the unsatisfied liability) destroys our expectations of collection.

In any case, the United States company that is owed money in Spain should be advised by a local specialist. Our knowledge of the national legislation will allow us to avoid a damaging agreement or a delay in payment or negotiation that ruins the possibility of collection.

Legal claims 

If the negotiations have not come to fruition, we will have to know the procedural tools that we have. In the event that the dispute must be defended in the United States, we will subsequently need to legalize the resolution so that it is recognized and enforced in Spain. 

If it must be settled here (which will be the most common), the procedure to follow will depend on the type and amount of the debt. Generally, it is easier to accredit commercial debts, since if we have documentation, an arbitration award, an acknowledgment of debt, a mediation agreement or other instruments, we can initiate executive actions directly.

Otherwise, we could be forced to previously go through a declarative process, in which the existence and enforceability of the debt is accredited. Faced with such a scenario, the claim will be extended, since once the debt is declared we will have to request the seizure and execution of the debtor's assets if it persists in its non-payment.

We have already spoken about the judicial procedure to claim debts on other occasions. Also, on the claim of debts between companies and other matters related to debt claims. So, we refer the reader to avoid repeating the information already provided. 

The worst scenario that we could find would be one in which the debtor is in a situation of insolvency. Although it is possible to claim bad debtors, it is possible that their situation leads the process towards a bankruptcy. In this case, it will be especially important that the American company to whom money is owed in Spain has lawyers specialized in claiming debts in the territory.

Contact us, and our debt specialist lawyers will study your specific case. We Have:

Law firm in Barcelona
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Law firm in Tarrega