Collecting a promissory note: payment orders

Translated from the Spanish original. If there is any discrepancy between the two versions, the Spanish text prevails. Read the original in Spanish.

You lent money to an acquaintance, or sold merchandise to a customer, and to back the debt you asked them to sign a promissory note (pagaré) or a bill of exchange (letra de cambio). The due date arrived, and the debtor stopped answering your calls. The law has a procedure designed for these cases: payment-order proceedings for money debts (proceso monitorio dinerario), which make it possible to obtain a payment order from the outset and, in many cases, the attachment (embargo) of the debtor’s assets.

Which law governs court debt collection today?

For years, these collections were handled under the Court Collection Law (Ley de Cobro Judicial, Law 8624). That law was repealed by the Civil Procedure Code (Código Procesal Civil, Law 9342), which now governs payment-order proceedings in Articles 110 and 111 (Article 183). Information based on the old law is still circulating, with deadlines that no longer apply.

Payment-order proceedings are used to collect liquidated and enforceable money debts, that is, a specific sum of money whose payment date has already passed. They can be based on public or private documents, whether or not those documents carry executory force (fuerza ejecutiva) (Article 110.1).

What document do I need?

The document must be the original or a signed copy, or be contained in a medium in which the identity of the debtor is beyond doubt, through their signature or an equivalent mark (Article 111.1).

Whether or not the document carries executory force, meaning that the law allows the creditor to attach assets from the outset, matters a great deal. The Code lists the executory instruments (títulos ejecutivos), among them the public deed (escritura pública), a private document acknowledged before a judge, and “all kinds of documents that, under special laws, carry executory force” (Article 111.2). This last category includes negotiable instruments (títulos valores), such as the promissory note and the bill of exchange, to which commercial legislation grants that force.

How does the process work?

Complaint. The creditor files the complaint with the original document. Filings must be authenticated by an attorney (Article 20.1).
Payment order. If the complaint meets the requirements, the court orders the debtor (resolución intimatoria) to pay the principal, the interest already calculated and future interest, and the costs, which are the court expenses and the attorney’s fees (Article 111.3). This first order is served personally or at the debtor’s home, actual or registered address, or the address stated in the document (Article 19 of the Judicial Notifications Law, Ley de Notificaciones Judiciales, Law 8687).
Five-day deadline. The debtor has five days to pay or to object (Article 110.2).
No objection, enforcement. If the debtor does not object, or if the objection is unfounded, the payment order is enforced without further proceedings (Article 110.3).
Well-founded objection, hearing. The court calls an oral hearing and issues a judgment confirming or revoking the payment order (Article 110.4).

How can the debtor defend themselves?

Only on specific grounds. An objection is admitted only if it is based on the forgery of the document, on the debt not yet being due, on payment proven in writing, or on the statute of limitations (prescripción) (Article 111.4). Saying “I have no money” or “they are overcharging me” without evidence does not stop the collection.

The statute of limitations deserves special attention. If the creditor lets too much time pass, the debtor can raise it and the claim fails. The period varies depending on the document; it is advisable to check it as soon as payments fall behind.

When are assets attached?

If the complaint is based on an executory instrument, the creditor can ask that the attachment be ordered in the same payment order, without posting a bond, for the principal and the calculated interest plus an additional fifty percent to cover future interest and costs (Article 111.3). If the document lacks executory force, attaching assets before judgment requires posting a bond equal to twenty-five percent of the amount to be attached (Article 86.2).

The attachment may cover wages, accounts, vehicles, or real estate, but only assets that can legally be attached (Article 154.2). Registered assets are recorded directly in the Registry by electronic means. If the debt remains unpaid, the attached assets can be sold at auction (remate), that is, at a public sale (Articles 157 to 161). The debtor can avoid or lift the attachment by depositing the full amount owed (Article 154.6).

What if I prefer to negotiate?

Before filing suit, or during the proceedings, the parties can settle through conciliation. Under the Alternative Dispute Resolution and Promotion of Social Peace Law (Ley de Resolución Alterna de Conflictos y Promoción de la Paz Social, Law 7727), an out-of-court conciliation agreement, or an in-court agreement approved by the judge, has the force of a final judgment and can be enforced immediately (Article 9).

Practical recommendations

Review the document when it is signed. Make sure the debtor signs it and that it states the amount, the due date, and an address for service of notice.
Keep the original in a safe place. The proceedings require you to file it.
Do not let time pass. The statute of limitations is one of the few defenses available to the debtor.
Find out what assets the debtor has. A title search (estudio registral) helps you know what can be attached.

Need help?

Every collection depends on the document, the time that has passed, and the debtor’s assets. At Murillo y Guzmán we can review your instrument, try to reach a settlement, and, if necessary, file the payment-order proceedings. Book a consultation.

This article is for informational purposes only and does not constitute legal advice for any specific case. To discuss your situation, book a consultation.