by Vlad Cuc
As of February 15th, 2013 the new Romanian Civil Procedure Code has entered into force. As a result the procedures related to debt collection in Romania have suffered some changes. At this time, a creditor can start debt recovery procedures from a Romanian debtor through several legal methods.
The main legal options are: the common law trial, the Ordinance of Payment or, if the amount is below RON 10,000, through a special low value claim procedure. The new Romanian Code regulates both the common law procedure and special procedures for debt collection in Romania. If you need legal assistance on the procedure, you can refer to our team of Romanian lawyers, who can act as a debt collection agency in Romania.
Table of Contents
Common law procedures in Romania
Regarding the common law litigation, it must be noted that, compared to the old Code of Civil Procedure, it is not necessary to meet the same requirements. However, according to Art. 193 of the New Code, the pre-trial procedure is still necessary “when the law states.” In these cases (when the law states) evidence fulfilling the preliminary procedure must be attached to initial claim in court.
Regarding the common law procedure, the new code brings a number of changes. The list on the main modifications is prepared by our team of Romanian lawyers, who can represent you in a trial concerning debt collection, regardless if you are a natural person or a legal entity. Our debt collection agency in Romania can provide its services to both parties. With regards to the main changes, we mention the following:
- establishing jurisdiction for first instance courts – courts will retain jurisdiction on family matters, multi-apartment buildings management, matters of lower value etc.;
- an important part of the trial will take place predominantly in the council’s chamber;
- after hearing the parties, the court will set a schedule;
- new major changes in enforcement matters for faster procedures;
- establish a new procedure or referral with the High Court of Cassation and Justice.
The Romanian debt collection procedures are now covered under Title IX of the New Code of Civil Procedure. Our law firm in Romania can present extensive details on the law regulating debt collection procedures and can present the steps one has to follow in the case in which debt collection proceedings are necessary.
What is the data on debt collection in Romania?
Debt can happen in numerous scenarios – between businesses, between clients and businesses and between individuals. The law regulates the procedures that have to be enforced in all these cases, and the rules of debt collection in Romania will vary based on the amount that needs to be collected. Our debt collection agency in Romania can present all these scenarios, if you are interested in this matter or if you are involved in a debt collection case. With regards to debt collection statistics, we present the following:
- in 2017, the amount of debt that was registered in Romania on business-to-client cases was of EUR 728.61 million;
- the debt recovered from the above mentioned value accounted for only EUR 96.76 million;
- in 2018, the amount of debt for the same matter (business-to-client) further increased, reaching EUR 992.79 million;
- the amount that was recovered in 2018 accounted for EUR 123.69 million;
- in the first quarter of 2019, the amount of debt was of EUR 269.9 million;
- the recovered amount accounted for EUR 76.09 million.
Ordinance of Payment Procedure in Romania
This applies to claims certain, liquid and due liabilities consisting of money resulting from a civil contract, including those between a professional and a contracting authority, established in written form or which are established in accordance to the law, regulations and so on, signed by the parties or in other form that is recognized by the applicable legislation in the field.
You can watch a short presentation on debt collection in Romania in the video below:
IMPORTANT: the creditor will inform the debtor through a bailiff or by registered letter with acknowledgment of receipt, an order in which it will request payment of the amount due within 15 days of receipt. Our debt collection agency in Romania can present more details on this procedure.
NOTE: if the debtor does not pay within the 15 days referred to in art. 1014 par. (1), the creditor can proceed with the claim in the competent court for a judgment of first instance (the first phase of the trial procedure). Here, our Romanian law firm can represent you and initiate the court procedure.
When making the claim through the Payment Ordinance, the creditor must include in the claim a set of details, such as: the name and various details of the parties involved in the debt collection case, what is required from the debtor – meaning the payment of debt, various legal information and documents and any other proof that show evidence on the debt, thus, on the validity of the claim, but also the interest that needs to be paid by the debtor.
Along these, the claim must also include the creditor signature, and a proof on the payment of the stamp duty, charged at a standard value of RON 200. You can learn more on this procedure if you address to a debt collection agency in Romania, where you can find persons who have an extensive knowledge on the procedures involved in this case.
Please mind that the Ordinance of Payment is a legal procedure that can be enforced not only in debt collection cases in Romania, but also at the level of European Union (EU). This can be done through the European Payment Order. In this case, the standard form will be addressed to a competent court, which will have the right to judge on the case without the requirement of summoning the debtor.
If the court judges in the favor of the creditor, then the debtor will be served with the European Ordinance of Payment. When the document is received, the debtor can simply pay the debt in a period of 30 days or, in the case in which the party considers that there aren’t any legal grounds for the issuance of the document, he or she can file a defence. The debtor is also entitled to defend himself or herself in front of the court.
What is the law on small claims in Romania?
The New Romanian Code of Civil Procedure also introduced for the first time a procedure on low value claims – Title X of the New Code of Civil Procedure. This procedure is applicable to claims of less than RON 10,000 “without taking into account interest rates, legal fees and other revenues accessories”.
Please mind that the small claims procedure can be started only in specific cases that are not only related to the value of the claim. For instance, the legal procedure can’t be used for cases related to insolvency, to the employment law debt cases or tax administration, even though the value of the claim can qualify as a small claims case.
The Romanian law on small claims follows the EU model for this procedure, which is enforced under the EU Regulation no. 861/2007. Please mind that this procedure can also be enforced at a EU level, through the European small claims procedure, in which the recovery of the debt is a cross-border case – for instance, when company from Romania needs to recuperate a debt from a party living in Spain, or vice-versa.
The legal procedure can be used for civil and commercial matters only, in which the value of the claim is limited to EUR 2,000. Our debt collection agency in Romania can provide in-depth information on how to start a cross-border litigation case, if you represent a company or natural person in the EU.
This type of procedure is started by “completing the application form and submitting it to the competent court or sending it by post or by any other means which provides transmission and confirmation of receipt of the form”. This procedure will be completed within 30 days after the court receives all the necessary information and, where appropriate, the oral debate.
This means that if the complainant duly fulfills the obligations can have a judgment in a short time. These judgments are enforceable by law, subject only to appeal to the appeal.
Frequently Asked Questions
We are based in Bucharest, however we activate in all Romanian major cities, such as Constanta, Cluj, Timisoara, Iasi etc. Depending on certain aspects we are able to represent clients anywhere in Romania.
Procedures depend on the specifics of each case. Nevertheless basic steps include: sending a formal notification (required by Romanian Law in some cases), establishing a meeting with the debtor, commencing the trial and enforcing the judge’s Decision through a legal executor (should the debtor not comply with the Court Decision). It must however be noted that the debt collection procedures in Romania have changed along with the enforcement of the new Romanian Civil Code in 2013.
You are going to be represented by experienced Romanian lawyers throughout all stages of the debt recovery procedure (including pre-trial proceedings). Please read our About Us section to know more about our team.
Although there are 2 types of trials that can be initiated for a commercial debt (one being presumably faster than the other, newly instituted through the new Civil Code), the actual situation of the legal system in Romania still makes debt collection a slow process. Reaching a final Court Decision could easily take months or in some cases, even years.
Besides our fee-quotation which will be offered once we find out the basics about your case, clients will have to consider Court Fees. While the Romanian Court Fees for the Ordinance of Payment (Ordonanta de plata) procedure are significantly lower, these are consistent for Common Law Trials (until now much more preferred by Romanian judges). Please visit the section of our website dedicated to debt collections costs for more information.
Indeed our law firm has partners throughout the world. We recommend company formation services in Holland through BridgeWest, a European Company Formation Agent.
MHC Law Firm has a very good experience related to the recuperation of debts through the methods described in the present article. Contact our Romanian lawyers for more information.