How to register a company in Romania?

In order to register a company in Romania, you need to choose the type of company form you want to incorporate, to prepare the necessary documents and to submit the application to the Romanian Trade Registry. Most common forms of companies in Romania are the Limited Liability Company (LLC), Joint Stock Company (SA) and sole trader (PFA).

How long does it take to open a company in Romania?

The company formation in Romania process will take 2 working days, since the date the incorporation application is submitted to the Romanian Trade Registry.

What is the main advantage to open a company in Romania?

One of the lowest taxation in EU: 1% turnover tax for the companies whose turnover does not exceed EUR 60,000 and have at least one employee or 3% turnover tax if the companies has a revenue exceeding EUR 60,000 or the companies is engaged in some specific activities.

Can I start a company in Romania as a foreigner?

Foreign citizens and legal persons can quickly and easily incorporate their own company in Romania, without any restrictions. There is no need for a Romanian shareholder and director

Debt Collection Agency Romania | Fast Debt Recovery Services

Debt collection in Romania has become an increasingly important aspect for businesses, especially those dealing with international clients. Whether you are a small business owner or part of a large corporation, understanding the nuances of debt recovery in Romania and portfolio recovery is crucial for maintaining cash flow and protecting your financial interests.

debt collection services Romania portfolio recovery company

Are you struggling with debt collection in Romania? Look no further! In this ultimate guide, we will provide you with the best practices and legal insights to help you navigate the intricacies of portfolio debt recovery in Romania. Debt recovery collection can be a complex and challenging process, especially in a foreign jurisdiction. Understanding the legal framework and cultural nuances is essential to ensure success. Our comprehensive guide will equip you with the knowledge you need to effectively recover debts, whether you are an individual or a business. From understanding the legal rights of creditors and debtors to exploring the legal remedies available for portfolio recovery, the essential role of debt collection agency in Romania, we will cover it all. We will also delve into the strategies that work best in Romania, providing you with practical tips and expert advice to maximize your chances of successful debt recovery. So, if you find yourself in the predicament of chasing unpaid debts in Romania, join us on this informative journey as we unravel the complexities of debt recovery in this dynamic and rapidly growing economy.

Understanding debt collection in Romania. What is debt recovery?

Debt collection in Romania is governed by a mix of local laws and European regulations. The process can be complex, especially when dealing with cross-border cases. Romanian law provides a structured framework for debt recovery, but it’s essential to be aware of the specifics to ensure compliance and success.

The legal framework of Romania debt collection process

Romania’s debt collection process is primarily regulated by the Civil Code, which outlines the procedures for claiming debts. The process typically starts with an amicable settlement attempt, followed by legal action if necessary. It's important to note that debtors have rights protected under Romanian law, which means that debt collection agencies must operate within strict legal boundaries.

Why you need debt collection agency in Romania. Outsourcing debt recovery to a Romanian agency

Navigating the debt collection process in Romania can be daunting, especially for foreign companies unfamiliar with the local legal system. This is where a debt collection agency in Romania can be invaluable. These agencies specialize in recovering debts while adhering to Romanian laws and regulations, ensuring a higher success rate and faster resolution.

Benefits of using a debt collection agency in Romania for recovery

Expert Knowledge: Debt collection agencies in Romania are well-versed in the local laws and customs, allowing them to handle cases more efficiently than an in-house team unfamiliar with the terrain. A debt collection agency in Romania brings a deep understanding of local laws, regulations, and cultural nuances. This expertise ensures that the debt recovery process is handled efficiently, minimizing legal risks and maximizing recovery rates.

Cost-Effective: Managing debt collection internally can be time-consuming and expensive, diverting valuable resources away from your core business operations. By outsourcing to a debt collection agency, you can save both time and money, allowing your team to focus on what they do best. Outsourcing debt collection to a specialized agency can be more cost-effective than pursuing legal action independently, particularly when considering the time and resources required.

Higher Success Rates: Debt collection agencies often have a higher success rate in recovering debts due to their lawyers’ experience, specialized skills, and established networks within Romania.

Legal Compliance: Debt collection in Romania involves navigating a complex legal landscape. A reputable debt collection agency ensures that all recovery efforts comply with local laws, protecting your business from potential legal repercussions.

Focus on Core Business and Stress Reduction: Chasing unpaid debts can be stressful and frustrating. A debt collection agency takes on this burden, handling everything from initial communication to legal action if necessary, allowing you to focus on growing your business. By outsourcing debt collection, businesses can focus on their core operations rather than getting bogged down by the complexities of debt recovery.

How to choose the right debt collection agency in Romania

When selecting a debt collection agency in Romania, it’s important to consider several factors:

Lawyers: Consider to look for the debt recovery process to be carried out only by lawyers registered in the Romania Bar. The Romania debt collection process carried out by specialized lawyers is faster and more efficient operation than the one realized by simple agencies which don’t have attorneys.

Our Romanian Advocacy lawyers have extensive expertise on debt recovery in Romania and will represent you with commitment and professionalism in any dispute concerning debt collection and foreclosure, regardless if you are a natural individual person or a legal entity. Our debt collection agency in Romania improves the chances of success when faced with challenging debt recovery situations.

Reputation: Look for agencies and lawyers with a solid track record and positive client testimonials.

Experience: An agency with extensive experience practice in Romanian debt collection will be more adept at navigating legal challenges and ensuring compliance.

Range of Services: Ensure the agency offers a comprehensive range of services, from amicable settlement to legal action and enforcement.

Transparency: The agency should provide clear and transparent communication throughout the debt collection process, keeping you informed of progress and any potential challenges.

Steps in the debt collection process. Key stages of debt recovery in Romania

1. Amicable Settlement: The first step usually involves attempting to reach an agreement with the debtor without involving the courts. This can include sending reminder letters, making phone calls, or arranging meetings to negotiate payment plans.

2. Legal Action: If amicable settlement fails, the creditor may file a lawsuit in court. The court process can be lengthy, often involving multiple hearings and the presentation of evidence.

3. Appeals: Debtors have the right to appeal court decisions, which can further prolong the debt recovery process.

4. Enforcement: Once a court judgment is obtained, it can be enforced through various means, such as wage garnishments, property seizures, or bank account freezes.

Debt collection legal procedures in Romania. Best practices for effective debt recovery

Effective debt collection is a crucial aspect of financial management for businesses operating in Romania. Understanding the legal procedures involved in debt recovery can make a significant difference in successfully reclaiming outstanding debts. This article provides an extensive overview of the law procedures for debt collection in Romania, offering insights into the legal framework, step-by-step processes, and best practices for businesses seeking to recover unpaid debts.

Romanian Advocacy lawyers are specialized in dispute resolution, litigation, debt recovery and enforcement proceedings in Romania can advise you on every step in such debt recovery cases and can assist and represent also the creditor and the debtor before the Romanian competent court or before any natural or legal person in Romania to recover the debt. Our lawyers are well-versed in these legal frameworks, enabling you to navigate the complexities of debt recovery efficiently, reducing the risk of legal disputes and enhancing the likelihood of successful debt recovery.

Debt collection in Romania is governed by several key pieces of legislation, primarily the Romanian Civil Code and the Code of Civil Procedure. These laws provide a structured framework for recovering debts, outlining the rights and obligations of both creditors and debtors. Additionally, European Union regulations also play a role, particularly in cross-border cases.

The Romanian law also dictates the procedures that must be followed in each of these situations, and the debt collection rules in Romania will differ depending on the amount to be recovered, of the following presented below legal claims: preliminary proceedings in debt recovery (amicable settlement), the payment ordinance, special procedure on small claims or the common procedure.

Pre-litigation phase of the debt collection in Romania (amicable settlement). Preliminary proceedings for debt recovery

The debt collection process in Romania typically begins with an attempt to settle the matter amicably. This phase is crucial because it can often resolve the issue without the need for lengthy legal proceedings. The lawyers play a key role during this phase by:

Step 1: Issuing Demand and Summoning Letters: Our lawyers will send a formal demand letter to the debtor, outlining the outstanding debt and requesting payment within a specified timeframe. This summoning letter serves as an official notification and a final attempt to resolve the matter before legal action is taken.

Step 2: Negotiating Settlements: Lawyers may negotiate on behalf of the creditor to reach a settlement that is acceptable to both parties. This might involve agreeing on a payment plan or a reduced lump-sum payment.

Step 3: Mediation: If both parties are open to alternative dispute resolution, mediation may be pursued. Romanian Advocacy lawyers can facilitate these processes, which are often faster and less costly than going to court.

Litigation phase of the debt collection in Romania (Court Proceedings)

If amicable efforts fail, the creditor may decide to pursue legal action. The litigation phase in Romania involves several key steps:

Step 1: Filing a Lawsuit: The creditor, through their lawyer, files a lawsuit in the appropriate Romanian court. The lawsuit must include all relevant documentation, such as the contract, invoices, and previous correspondence. The lawyer ensures that all procedural requirements are met, which is crucial for the case to proceed smoothly.

Step 2: Court Hearings: Once the lawsuit is filed, the court will schedule hearings where both parties can present their evidence and arguments. Our lawyers represent the creditor, ensuring that their case is presented effectively and persuasively.

Step 3: First Court Phase Judgment: After considering the evidence, the court will issue a judgment. If the court rules in favor of the creditor, the debtor is legally obligated to pay the debt. The judgment will specify the amount to be paid, including any interest and legal fees.

Step 4: Appeals and Final Appeal Proceedings: If the debtor contests the judgment, they may file an appeal and subsequent a final appeal (recourse), as the case provided by the Romanian law. The appeals process can be complex, requiring expert legal representation to navigate effectively. Our lawyers prepare and file all necessary documents, ensuring that the appeal is properly supported by legal arguments.

The appellate court reviews the case, focusing on legal and procedural issues rather than re-examining factual evidence. The lawyer's role is crucial in persuading the appellate judges to uphold or overturn the lower court's decision.

Final Judgment: The appellate court issues a final judgment, which may affirm, modify, or reverse the original judgment. If the appeal is successful, the case may be remanded to the lower court for further proceedings.

Enforcement of judgment ruling on the debt collection in Romania

Even after obtaining a favorable judgment, the debtor may not voluntarily pay the debt. In such cases, enforcement actions of the court ruling are necessary. Romanian Advocacy lawyers handle this phase by:

Step 1: Obtaining a Writ of Execution: The lawyer obtains a writ of execution from the court, which authorizes enforcement actions against the debtor.

Step 2: Seizing Assets and Distraint on the Debtors Assets: The lawyer may coordinate with a bailiff to seize the debtor's assets, such as bank accounts, real estate, movable property, or distraint on a real estate asset to satisfy the debt.

Step 3: Garnishment of Wages: In some cases, the court may order the garnishment of the debtor's wages or other income until the debt is paid in full.

Step 4: Public Auction of Seized Assets: If assets are seized, they may be sold at a public auction. The proceeds from the sale are used to pay off the debt. Romanian Advocacy attorneys ensure that the auction process is conducted legally and transparently.

The payment ordinance procedure for debt collection in Romania

Understanding the payment ordinance procedure in Romania

One of the most effective legal tools available in Romania for debt recovery is the payment ordinance procedure (Romanian: „ordonanța de plată”). The payment ordinance procedure is a legal mechanism in Romania designed to expedite the recovery of debts.

This process is streamlined and less time-consuming than traditional litigation of the common procedure and with less cost for the plaintiff-creditor, making it an attractive option for creditors seeking to recover undisputed debts.

This procedure is particularly useful in cases where the debt is not contested by the debtor, allowing creditors to obtain a court order for payment without undergoing lengthy and complex court proceedings. The payment ordinance procedure is applicable for both domestic and international debts.

This applies to claims that are clear, specific, and overdue, involving monetary obligations arising from a civil contract. This includes agreements between a professional and a contracting authority, which are documented in writing or established according to legal provisions, regulations, and other recognized forms as per the applicable legislation.

Key features of the payment ordinance procedure in Romania

Expedited Process: The payment ordinance procedure is designed to be swift, usually completed within a few months, compared to the often lengthy traditional litigation process. The average timeline of this kind of lawsuit takes about 3 months.

Cost-Effective: Because it bypasses the need for extended court proceedings, this procedure is generally more cost-effective for creditors. It involves fewer court appearances and lower legal fees.

Limited Dispute: The procedure is typically used for undisputed claims, where the debtor does not contest the existence or amount of the debt. If the debtor raises a dispute, the case may be moved to ordinary court proceedings.

Legal Certainty: Once granted, the payment ordinance has the force of a court judgment, allowing creditors to proceed immediately with enforcement actions if the debtor fails to comply, since the first phase court and before the court case will issue a final ruling.

Legal framework for the payment ordinance procedure in Romania

The payment ordinance procedure in Romania is primarily governed by Articles 1013 to 1024 of the Romanian Code of Civil Procedure. These articles outline the conditions under which a payment ordinance can be issued, the steps involved in the process, and the rights and obligations of both creditors and debtors.

The key provisions of the legal framework are regarding:

Jurisdiction: The payment ordinance is issued usually by the court of the debtor's domicile or registered office.

Claim Requirements: The creditor must present a clear, certain, and liquid claim. This means the debt must be clearly established and quantifiable, with no need for additional evidence or calculations. The claim must be clear, specific, overdue, and provided by a civil/commercial contract, including also the agreements between professionals and contracting authorities.

Timeframe: The procedure is designed to be swift, with courts required to issue a decision within 45 days from the filing of the application, barring any delays caused by the debtor's actions.

Stamp Duty: the plaintiff must submit also the proof the payment the stamp duty of RON 200 (approximately EUR 40).

European Payment Order: the ordinance of payment may be filed not only in debt collection cases in Romania (Romanian debtors), but also at the level of European Union (EU), through the mechanism of the European Payment Order provided by the Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure.

Step-by-Step process of the payment ordinance procedure in Romania

Step 1: The Creditor’s Summon. The creditor-plaintiff must notice the debtor, through a bailiff office or by registered letter with acknowledgment of receipt and declared content, the obligation to pay the debt within a 15 days term of receipt. Only if the debtor does not pay the debt within this term, the creditor may proceed to filling the debt claim to the court.

Step 2: Filing the Application. The process begins with the creditor filing an application for a payment ordinance with the competent court. The application must include: details of the creditor and debtor, the amount of the debt and its method of calculation, the basis of the claim (e.g., a contract, invoice, or other financial obligation) and any supporting documents that prove the existence and amount of the debt.

Our lawyers typically assist in preparing and submitting this application to ensure it meets all legal requirements and increases the likelihood of a favorable outcome.

Step 3: Court Examination. Upon receiving the application, the court examines the claim to determine its validity. The court will review the evidence presented by the creditor to ensure the debt is clear, certain, and liquid. If the court finds the claim valid, it may proceed to issue the payment ordinance without requiring a hearing. In some cases, the court may summon the debtor to a hearing if there is a need for further clarification or if the debtor has raised any objections.

Step 4: Issuance of the Payment Ordinance. If the court finds the claim valid and the debtor does not present any valid objections, it will issue a payment ordinance. This ordinance is a formal court order requiring the debtor to pay the outstanding debt within a specified period, usually 30 days. The payment ordinance has the same legal force as a court judgment, meaning it can be enforced through legal means if the debtor fails to comply.

Step 5: Subpoena to the parties and parties’ challenge. Once the payment ordinance is issued, the court serves it to the debtor. The debtor is then required to pay the outstanding amount.

Also, the debtor may file a challenge within 10 days of receiving the ordinance, where he presents his objections to the first phase court ruling. The debtor's objection must be based on valid legal grounds, such as a dispute over the existence or amount of the debt. In such cases, the creditor may need to pursue the debt through traditional litigation common procedure, where the matter will be examined in greater detail.

Even if the debtor files the challenge within the specified timeframe, the payment ordinance procedure and its enforcement will not be halted and the enforcement may continue.

Step 6: Enforcement of the Payment Ordinance. If the debtor fails to pay the debt within the specified period, the creditor can initiate enforcement proceedings. This involves: obtaining the writ of execution, distraint and seizure of assets and public auction, as we presented above.

Advantages of using the payment ordinance procedure for debt recovery in Romania

Speed and Efficiency: The expedited nature of the Payment Ordinance Procedure makes it an attractive option for businesses looking to recover debts quickly. The reduced need for lengthy court hearings and extended legal arguments means that creditors can secure a judgment in a matter of weeks or months rather than years.

Lower Costs: The streamlined process generally involves fewer legal fees and court costs compared to traditional litigation. This makes it a cost-effective option for businesses, particularly in cases where the debt is undisputed.

Enforceability: The payment ordinance has the same legal standing as a court judgment, meaning it can be enforced through legal means if the debtor fails to comply. This provides creditors with a powerful tool to ensure that debts are paid.

Legal Certainty: The Payment Ordinance Procedure offers a high degree of legal certainty, as it is based on well-defined legal provisions. Creditors can be confident that their claims will be handled in a predictable and legally sound manner.

Flexibility: The procedure is suitable for a wide range of debts, including both domestic and international claims. This flexibility makes it a valuable tool for businesses of all sizes and across various industries.

Challenges on the payment ordinance procedure for debt collection in Romania

While the Payment Ordinance Procedure offers numerous advantages, there are also some challenges and considerations to keep in mind:

Limited Applicability: The procedure is only applicable for undisputed claims. If the debtor contests the debt, the case may need to be resolved through traditional litigation (common procedure), which can be more time-consuming and costly.

Potential for Debtor Objections: Debtors have the right to file objections, which can delay the process and potentially lead to a full court trial within the common procedure.

Enforcement Complexities: Even after obtaining a payment ordinance, enforcing it can be challenging, particularly if the debtor is insolvent or if the assets are difficult to locate. Professional legal assistance is often necessary and advisable to navigate these complexities.

As conclusion, the payment ordinance procedure in Romania is a powerful tool for businesses seeking to recover unpaid debts efficiently and legally. By offering a streamlined, cost-effective process, it allows creditors to obtain and enforce court orders for payment without the need for lengthy litigation.

The small claims procedure for debt collection in Romania

Understanding the small claims procedure in Romania

The Small Claims Procedure is designed to simplify and expedite the process of recovering small debts. Governed by the Romanian Code of Civil Procedure, this procedure is intended for claims that involve relatively minor amounts up to EUR 2,000 (approximately RON 10,000) without taking into account interest rates, legal fees and other revenues accessories, but though this threshold can be updated periodically.

This remedy cannot be used for claims related to tax debts and receivables, administration law claims, labor law or disputes in insolvency lawsuits.

The procedure is less formal than traditional court proceedings, making it accessible and cost-effective for creditors seeking to recover unpaid debts. It is particularly useful for businesses and individuals dealing with small, straightforward claims.

Legal framework governing the small claims procedure and key features

The small claims procedure is primarily regulated by the following: Romanian Code of Civil Procedure – outlining the requirements, steps, and procedural rules, Law no. 134/2010 – which provides additional details on civil procedural matters, including the small claims process and the European Regulations – for cross-border small claims within the European Union, the European Small Claims Procedure (ESCP) offers a standardized process that complements Romania’s national procedures.

Key features of the small claims procedure

Jurisdiction: The small claims procedure decision is issued usually by the court of the debtor's domicile or registered office.

Expedited Process: The small claims procedure is designed to be faster than traditional court processes. Cases are typically resolved within a few months, reducing the time creditors have to wait to recover their debts.

Cost-Effective: The procedure is generally more affordable than standard litigation. It involves lower court fees and legal costs, making it a practical option for small claims.

Simplified Procedure: The process is less formal, with fewer procedural requirements. This simplicity allows parties to navigate the process with minimal legal assistance.

Limited Appeal Options: The Small Claims Procedure typically limits the grounds for appeal, focusing on the swift resolution of disputes rather than prolonged legal battles.

Stamp Duty: the plaintiff must submit also the proof the payment the stamp duty of RON 200 (approximately EUR 40).

European Small Claims Procedure: the small claims procedure may be filed not only in debt collection cases in Romania (Romanian debtors), but also at the level of European Union (EU), through the mechanism of the European Small Claims Procedure provided by the Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European Small Claims Procedure.

Step-by-step process of the small claims procedure for debt collection in Romania

Step 1: Filing the Claim. The process begins with the creditor filing a claim in the competent court. To initiate the procedure, the creditor must submit: the written claim detailing the amount owed, the basis for the claim, and any supporting evidence and the documentation proving the existence and validity of the debt, such as contracts, invoices, or correspondence.

Pro Tip: Engaging the Romanian Advocacy lawyers to assist with preparing and filing the claim can help ensure all necessary documentation is accurate and complete, increasing the likelihood of a favorable outcome.

Step 2: Court Examination. Once the claim is filed, the court will examine the submission to determine if it meets the criteria for the Small Claims Procedure. The court will review: the clarity and specificity of the claim, the validity and sufficiency of the evidence provided, whether the claim falls within the monetary threshold for small claims. If the court finds the claim valid, it will schedule a hearing. In some cases, the court may issue a judgment based on the written submissions without the need for a hearing.

Step 3: Court Judgment. The court typically issues a judgment shortly after the hearing. If the creditor’s claim is upheld, the court will order the debtor to pay the amount owed. The judgment will specify the amount to be paid, including any applicable interest or legal fees.

Step 4: Enforcement of Judgment. If the debtor does not voluntarily comply with the court’s judgment, the creditor can initiate enforcement proceedings. The enforcement process includes obtaining the writ of execution, seizure of the debtor’s assets and garnishment of wages, as presented above.

Step 5: Appeal and Finalization. While the Small Claims Procedure limits appeals, parties can still challenge the judgment under specific circumstances. Even if the debtor files the appeal, the first court decision enforcement will not be halted and the foreclosure of the debtor may continue. The appellate court’s decision is final, and the original judgment may be upheld, modified, or overturned.

Advantages of the small claims procedure for debt collection in Romania

Speed and Efficiency: The expedited nature of the Small Claims Procedure means that creditors can recover debts more quickly than through traditional litigation. Usually, it takes up to 3 months to obtain a first court ruling in this special procedure.

Reduced Costs: The procedure involves lower court fees and legal expenses, making it a cost-effective option for handling small debts.

Simplified Process: The less formal nature of the procedure reduces the complexity of the legal process, making it accessible for individuals and businesses without extensive legal resources.

Effective Recovery: Despite its simplicity, the Small Claims Procedure provides a robust mechanism for recovering small debts, with enforceable judgments that can be pursued through legal means if necessary.

Whether the plaintiff creditor chooses to collect his claim using the formalistic small claims procedure, Romanian Advocacy attorneys strongly recommend assistance and representation by a specialized lawyer in dispute resolution, litigation and debt recovery proceedings in Romania, who will prepare all the necessary steps in order to collect the debt.

The common legal claim procedure for debt collection in Romania

Debt collection is a crucial aspect of maintaining financial stability for businesses and individuals. In Romania, when debts cannot be recovered through informal means or alternative dispute resolution, the Common Court Procedure offers a structured legal process to enforce repayment, irrespective of the type, the nature and debt amount.

Understanding the common court procedure for debt collection in Romania

The common court procedure, also known as the ordinary litigation procedure, is the formal legal process used to resolve disputes, including debt collection cases, that are not suitable for simplified or specialized procedures. Governed by the Romanian Code of Civil Procedure, this method is employed when the debt is contested or when other debt recovery methods have failed.

This procedure is more formal and detailed than alternatives like the Small Claims Procedure or the Payment Ordinance Procedure, making it suitable for complex or high-value claims where detailed evidence and legal arguments are required.

Legal framework for the common court procedure and key features

The common court procedure for debt collection in Romania is regulated by several key pieces of legislation: the Romanian Code of Civil Procedure - the primary legal framework governing this procedure, including the rules for initiating, conducting, and resolving civil disputes and Law no. 134/2010 – provides comprehensive guidelines on civil procedural matters, including debt collection.

Key features of the common court procedure

Formal Legal Process: The common court procedure is a formal process involving detailed pleadings, evidence submission, and court hearings. It is suited for complex cases where detailed legal arguments and evidence are necessary.

Jurisdiction: The claim is usually submitted to the court of the debtor's domicile or registered office (territorial competence), while the material competence belongs to the local courts for debts up to EUR 40,000 (RON 200,000) and the claims beyond this value will be ruled by the district courts (tribunals).

Detailed Proceedings: Unlike simplified procedures explained above, the common court procedure involves a thorough examination of evidence, detailed written arguments, and multiple court hearings if necessary.

Higher Costs and Duration: The procedure generally involves higher legal fees and can take longer to resolve compared to simpler debt collection methods. This reflects the detailed and formal nature of the process.

Appeal Options: The procedure allows for appeals if either party is dissatisfied with the court’s decision. This provides a mechanism for reviewing and potentially overturning the court’s judgment.

Stamp Duty. The plaintiff must submit also the proof the payment the stamp duty depending on the value of the debts, as follows:

a) 8% of the debt, but not less than EUR 5 (RON 20) – for the debts up to EUR 100 (RON 500);

b) EUR 8 (RON 40) + 7% of the debt which exceeds EUR 100 (RON 500) – for the debts between EUR 100 (RON 500) and EUR 1,000 (RON 5,000);

c) EUR 71 (RON 355) + 5% of the debt which exceeds EUR 1,000 (RON 5,000) – for the debts between EUR 1,000 (RON 5,000) and EUR 5,000 (RON 25,000);

d) EUR 271 (RON 1,355) + 3% of the debt which exceeds EUR 5,000 (RON 25,000) – for the debts between EUR 5,000 (RON 25,000) and EUR 10,000 (RON 50,000);

e) EUR 421 (RON 2,105) + 2% of the debt which exceeds EUR 10,000 (RON 50,000) – for the debts between EUR 10,000 (RON 50,000) and EUR 50,000 (RON 250,000);

e) EUR 1,221 (RON 6,105) + 1% of the debt which exceeds EUR 50,000 (RON 250,000) – for the debts over EUR 50,000 (RON 250,000);

Step-by-step process of the common court procedure

Step 1: Filing the Claim. The debt collection process begins with the creditor filing a claim in the appropriate Romanian court. To initiate the procedure, the following steps are required preparation of the Claim: The creditor must prepare a detailed written claim that includes: the parties involved (creditor and debtor and guarantors), the amount of the debt and the basis for the claim (e.g., contract, invoice), supporting evidence such as contracts, correspondence, and financial records and submission to court. The claim is filed with the competent court, which is typically the court of the debtor’s domicile or registered office. The creditor must pay the court fees associated with filing the claim.

Pro Tip: Engaging the Romanian Advocacy lawyers can ensure that the claim is accurately prepared and that all necessary documents and evidence are properly submitted.

Step 2: Court Examination and Preliminary Hearing. After the claim is filed, the court will examine it to ensure that it meets the procedural requirements. The key steps in this phase include:

Preliminary review – the court reviews the claim to verify its validity and completeness. If the claim is found to be in order, the court schedules a preliminary hearing,
Preliminary hearing – during this hearing, the court may address preliminary issues, such as jurisdiction or procedural matters, and set deadlines for the submission of additional evidence or written arguments and
Main hearing(s) – the central part of the common court procedure. During this phase: presentation of evidence – both parties present their evidence and arguments. This may include witness testimonies, expert opinions, and documentary evidence; cross-examination – each party has the opportunity to cross-examine the other party’s witnesses and evidence, ensuring that all relevant facts and arguments are thoroughly examined and closing arguments – after the evidence is presented, both parties make closing arguments summarizing their positions and reinforcing their claims or defenses.

Step 3: Court Decision and Judgment. Following the main hearing, the court will deliberate and issue a decision, where will be presented the court’s judgment which will outline the arguments on the debt claim, specifying the amount to be paid, including any applicable interest and legal fees.

Step 4: Appeals. If either party is dissatisfied with the judgment, they can appeal the decision. The appeal process involves filing the appeal within the specific timeframe, usually 30 days from the date of the judgment and appellate review. The appellate court reviews the case for legal and procedural errors. The appellate court’s decision may uphold, modify, or overturn the lower court’s judgment.

If at least one of the parties lodges the appeal, the first court decision enforcement will be suspended and the foreclosure of the losing party cannot continue, but only after an appeal ruling is obtained.

Step 5: Enforcement of Judgment. If the debtor fails to comply with the court’s judgment, the creditor can initiate enforcement proceedings. This involves obtaining the writ of execution – where the creditor requests a writ of execution from the court, authorizing enforcement actions to recover the debt; seizure of assets: The court may order the seizure of the debtor’s assets, including bank accounts, real estate, or personal property, to satisfy the debt, garnishment of wages: The creditor may seek to garnish the debtor’s wages or other income streams.

Advantages and disadvantages of the common court procedure

Thorough Examination: The procedure allows for a detailed examination of evidence and legal arguments, providing a comprehensive resolution to complex debt disputes.

Legal Certainty: The formal nature of the process ensures that the debt claim is handled with a high degree of legal certainty, with clear judgments supported by detailed reasoning.

Appeal Mechanism: The ability to appeal provides a safeguard for reviewing and challenging judgments, ensuring fairness and the opportunity for correction of legal errors.

Enforceability: Judgments issued through the common court procedure are enforceable, providing creditors with a robust mechanism to recover debts through legal means.

Costs and Duration: The common court procedure can be costly and time-consuming compared to simplified debt recovery methods. Creditors should weigh the potential benefits against the costs and duration of the process.

Complexity: The formal nature of the procedure requires careful preparation and presentation of evidence. Engaging legal professionals can help navigate the complexities and increase the chances of a favorable outcome.

Potential for Appeals: The possibility of appeals can extend the duration of the debt collection process. Creditors should be prepared for potential delays and additional costs, considering that filing the appeal automatically will suspend the enforcement of the first court decision.

Challenges in debt collection and how Romanian Advocacy lawyers overcome them

Debt collection in Romania, while structured, can present several challenges:

Lengthy Legal Processes: The Romanian legal system can be slow, with cases sometimes taking years to resolve. Our lawyers expedite the process by ensuring all filings and procedures are handled promptly and correctly.

Cross-Border Debt Collection: Recovering debts from foreign debtors involves navigating different legal systems and jurisdictions. Our attorneys are familiar with EU regulations and international treaties that facilitate cross-border debt recovery.

Debtor Insolvency: If the debtor is insolvent, recovering the debt may be difficult. In such cases, lawyers can guide creditors through the bankruptcy process, helping them recover as much as possible through liquidation or restructuring proceedings.

Statute of Limitations: The statute of limitations for debt recovery in Romania is generally three years from the due date. The lawyers help ensure that actions are taken within this period, preventing debts from becoming unenforceable.

Advantages of choosing Romanian Advocacy as your debt collection agency in Romania

Partnering with Romanian Advocacy and choosing our lawyers as your debt collection agency in Romania offers several key advantages in the debt collection process:

Expert Legal Knowledge: Lawyers have a deep understanding of Romanian debt collection laws and procedures, ensuring that all actions taken are legally sound and effective.

Efficient Process Management: Lawyers manage the entire debt recovery process, from pre-litigation to enforcement, saving businesses time and resources.

Risk Mitigation: By ensuring compliance with all legal requirements, lawyers help mitigate the risk of legal disputes or procedural errors that could derail the debt collection process.

Higher Success Rates: With their experience and expertise, lawyers increase the likelihood of successfully recovering debts, even in complex or contested cases.

Frequently Asked Questions on Romania debt collection

1. What is debt collection in Romania?

Debt collection in Romania refers to the legal and procedural methods used to recover outstanding debts from individuals or businesses. This process involves various legal tools and procedures, including the Payment Ordinance Procedure, Small Claims Procedure, and Common Court Procedure, each tailored to different types of claims and amounts.

2. What are the main procedures for debt collection in Romania?

In Romania, the primary procedures for debt collection include:

Payment Ordinance Procedure: A streamlined process for recovering certain, specific,overdue ad undisputed debts by the debtor.
Small Claims Procedure: A simplified procedure for resolving claims involving smaller amounts, usually up to EUR 2,000 (approx. RON 10,000 RON).
Common Court Procedure: A formal litigation process used for complex or contested debts, allowing for a detailed examination of evidence and legal arguments.

3. How does the Payment Ordinance Procedure work?

The Payment Ordinance Procedure is designed for quick and efficient recovery of undisputed debts. It involves filing an application with the court, which reviews the claim and, if valid, issues a payment ordinance. This ordinance is a court order requiring the debtor to pay the amount owed. If the debtor does not comply, the creditor can initiate enforcement actions.

4. What is the Small Claims Procedure, and how is it different from other procedures?

The Small Claims Procedure is a simplified legal process for recovering smaller debts, typically up to EUR 2,000 (approx. RON 10,000 RON). It is less formal than the Common Court Procedure, involving lower costs and a faster resolution. This procedure is designed for straightforward claims and allows parties to resolve disputes without extensive legal proceedings.

5. What are the costs associated with debt collection in Romania?

The costs of debt collection in Romania can vary depending on the procedure used and the complexity of the case. Costs may include court fees, legal fees, and expenses related to the enforcement of judgments. The Payment Ordinance Procedure and Small Claims Procedure generally involve lower costs compared to the Common Court Procedure, which is more formal and complex.

6. Can a foreign creditor pursue debt collection in Romania?

Yes, foreign creditors can pursue debt collection in Romania. They must adhere to Romanian legal procedures and may need to engage local legal representation to navigate the process effectively. International debt recovery may also involve EU regulations if the debt is cross-border.

7. What happens if the debtor disputes the debt?

If the debtor disputes the debt, the process may be moved from a simplified procedure to the Common Court Procedure. In such cases, the dispute will be resolved through detailed litigation, including evidence presentation and legal arguments. The creditor must prove the validity of the debt to obtain a favorable judgment.

8. How can I enforce a debt collection judgment in Romania?

To enforce a debt collection judgment in Romania, the creditor must obtain a writ of execution from the court. This writ authorizes enforcement actions, such as seizing assets or garnishing wages. Enforcement can be complex and may require professional legal assistance to ensure compliance with Romanian laws.

9. What are the timeframes for debt collection procedures?

Time frames vary depending on the procedure:

Payment Ordinance Procedure: Typically resolved within 4 months.
Small Claims Procedure: Generally completed within 3 months, depending on the complexity of the case.
Common Court Procedure: Can take several months to years, depending on the complexity of the case and any appeals.

10. Can I appeal a debt collection judgment in Romania?

Yes, you can appeal a debt collection judgment in Romania. The appeal process allows parties to challenge the court’s decision based on legal or procedural errors. Appeals must be filed within a specified timeframe.

11. Do I need a lawyer for debt collection in Romania?

While it is possible to navigate debt collection procedures without a lawyer, it is highly recommended to engage a lawyer for complex cases or if you are unfamiliar with local legal procedures. Legal professionals can provide valuable assistance in preparing claims, presenting evidence, and navigating the enforcement process.

12. What are the potential challenges in debt collection in Romania?

Challenges in debt collection in Romania may include: Debtor Insolvency: Difficulty in recovering debts if the debtor is insolvent or has limited assets; Complex Legal Procedures: Navigating the formal legal process can be complex and time-consuming and Enforcement Difficulties: Challenges in enforcing judgments, particularly if the debtor’s assets are difficult to locate or seize.

13. How can I improve my chances of successful debt collection in Romania?

To improve your chances of successful debt collection in Romania: 1. Maintain Accurate Records: Ensure all documentation related to the debt is clear and well-organized; 2. Engage Legal Professionals: Consult Romanian Advocacy lawyers for expert guidance and representation. 3. Utilize Appropriate Procedures: Choose the right debt collection procedure based on the nature and amount of the claim.

Conclusion: Strengthen your business with effective debt collection in Romania strategies

Debt collection in Romania requires a strategic approach, combining knowledge of local laws with effective negotiation and enforcement techniques. For businesses dealing with unpaid debts in Romania, partnering with Romanian Advocacy lawyers bring the legal expertise, strategic approach, and local knowledge necessary to navigate this process successfully, significantly improving recovery rates.

By choosing our lawyers as your debt collection agency in Romania, you can ensure that your debt collection process is handled professionally and in compliance with Romanian regulations, allowing you to focus on what you do best—growing your business.

For any question regarding the debt collection in Romania or portfolio debt recovery, feel free to reach out to us at tudor@roadvocacy.ro or use the contact form on our website at www.roadvocacy.ro. We're here to assist you in any way we can!

Ultimate Guide to Debt Collection in Romania: Best Practices and Legal Insights

Understanding debt collection in Romania. What is debt recovery?

The legal framework of Romania debt collection process

Why you need debt collection agency in Romania. Outsourcing debt recovery to a Romanian agency

Benefits of using a debt collection agency in Romania for recovery

Higher Success Rates: Debt collection agencies often have a higher success rate in recovering debts due to their lawyers’ experience, specialized skills, and established networks within Romania.

Legal Compliance: Debt collection in Romania involves navigating a complex legal landscape. A reputable debt collection agency ensures that all recovery efforts comply with local laws, protecting your business from potential legal repercussions.

How to choose the right debt collection agency in Romania

When selecting a debt collection agency in Romania, it’s important to consider several factors:

Reputation: Look for agencies and lawyers with a solid track record and positive client testimonials.

Experience: An agency with extensive experience practice in Romanian debt collection will be more adept at navigating legal challenges and ensuring compliance.

Range of Services: Ensure the agency offers a comprehensive range of services, from amicable settlement to legal action and enforcement.

Transparency: The agency should provide clear and transparent communication throughout the debt collection process, keeping you informed of progress and any potential challenges.

Steps in the debt collection process. Key stages of debt recovery in Romania

1. Amicable Settlement: The first step usually involves attempting to reach an agreement with the debtor without involving the courts. This can include sending reminder letters, making phone calls, or arranging meetings to negotiate payment plans.

2. Legal Action: If amicable settlement fails, the creditor may file a lawsuit in court. The court process can be lengthy, often involving multiple hearings and the presentation of evidence.

3. Appeals: Debtors have the right to appeal court decisions, which can further prolong the debt recovery process.

4. Enforcement: Once a court judgment is obtained, it can be enforced through various means, such as wage garnishments, property seizures, or bank account freezes.

Debt collection legal procedures in Romania. Best practices for effective debt recovery

Pre-litigation phase of the debt collection in Romania (amicable settlement). Preliminary proceedings for debt recovery

The debt collection process in Romania typically begins with an attempt to settle the matter amicably. This phase is crucial because it can often resolve the issue without the need for lengthy legal proceedings. The lawyers play a key role during this phase by:

Step 2: Negotiating Settlements: Lawyers may negotiate on behalf of the creditor to reach a settlement that is acceptable to both parties. This might involve agreeing on a payment plan or a reduced lump-sum payment.

Step 3: Mediation: If both parties are open to alternative dispute resolution, mediation may be pursued. Romanian Advocacy lawyers can facilitate these processes, which are often faster and less costly than going to court.

Litigation phase of the debt collection in Romania (Court Proceedings)

If amicable efforts fail, the creditor may decide to pursue legal action. The litigation phase in Romania involves several key steps:

Step 2: Court Hearings: Once the lawsuit is filed, the court will schedule hearings where both parties can present their evidence and arguments. Our lawyers represent the creditor, ensuring that their case is presented effectively and persuasively.

Step 3: First Court Phase Judgment: After considering the evidence, the court will issue a judgment. If the court rules in favor of the creditor, the debtor is legally obligated to pay the debt. The judgment will specify the amount to be paid, including any interest and legal fees.

Enforcement of judgment ruling on the debt collection in Romania

Even after obtaining a favorable judgment, the debtor may not voluntarily pay the debt. In such cases, enforcement actions of the court ruling are necessary. Romanian Advocacy lawyers handle this phase by:

Step 1: Obtaining a Writ of Execution: The lawyer obtains a writ of execution from the court, which authorizes enforcement actions against the debtor.

Step 2: Seizing Assets and Distraint on the Debtors Assets: The lawyer may coordinate with a bailiff to seize the debtor's assets, such as bank accounts, real estate, movable property, or distraint on a real estate asset to satisfy the debt.

Step 3: Garnishment of Wages: In some cases, the court may order the garnishment of the debtor's wages or other income until the debt is paid in full.

Step 4: Public Auction of Seized Assets: If assets are seized, they may be sold at a public auction. The proceeds from the sale are used to pay off the debt. Romanian Advocacy attorneys ensure that the auction process is conducted legally and transparently.

The payment ordinance procedure for debt collection in Romania

Understanding the payment ordinance procedure in Romania

One of the most effective legal tools available in Romania for debt recovery is the payment ordinance procedure (Romanian: „ordonanța de plată”). The payment ordinance procedure is a legal mechanism in Romania designed to expedite the recovery of debts.

This process is streamlined and less time-consuming than traditional litigation of the common procedure and with less cost for the plaintiff-creditor, making it an attractive option for creditors seeking to recover undisputed debts.

This procedure is particularly useful in cases where the debt is not contested by the debtor, allowing creditors to obtain a court order for payment without undergoing lengthy and complex court proceedings. The payment ordinance procedure is applicable for both domestic and international debts.

Key features of the payment ordinance procedure in Romania

Expedited Process: The payment ordinance procedure is designed to be swift, usually completed within a few months, compared to the often lengthy traditional litigation process. The average timeline of this kind of lawsuit takes about 3 months.

Cost-Effective: Because it bypasses the need for extended court proceedings, this procedure is generally more cost-effective for creditors. It involves fewer court appearances and lower legal fees.

Limited Dispute: The procedure is typically used for undisputed claims, where the debtor does not contest the existence or amount of the debt. If the debtor raises a dispute, the case may be moved to ordinary court proceedings.

Legal Certainty: Once granted, the payment ordinance has the force of a court judgment, allowing creditors to proceed immediately with enforcement actions if the debtor fails to comply, since the first phase court and before the court case will issue a final ruling.

Legal framework for the payment ordinance procedure in Romania

The key provisions of the legal framework are regarding:

Jurisdiction: The payment ordinance is issued usually by the court of the debtor's domicile or registered office.

Timeframe: The procedure is designed to be swift, with courts required to issue a decision within 45 days from the filing of the application, barring any delays caused by the debtor's actions.

Stamp Duty: the plaintiff must submit also the proof the payment the stamp duty of RON 200 (approximately EUR 40).

Step-by-Step process of the payment ordinance procedure in Romania

Our lawyers typically assist in preparing and submitting this application to ensure it meets all legal requirements and increases the likelihood of a favorable outcome.

Step 5: Subpoena to the parties and parties’ challenge. Once the payment ordinance is issued, the court serves it to the debtor. The debtor is then required to pay the outstanding amount.

Even if the debtor files the challenge within the specified timeframe, the payment ordinance procedure and its enforcement will not be halted and the enforcement may continue.

Step 6: Enforcement of the Payment Ordinance. If the debtor fails to pay the debt within the specified period, the creditor can initiate enforcement proceedings. This involves: obtaining the writ of execution, distraint and seizure of assets and public auction, as we presented above.

Advantages of using the payment ordinance procedure for debt recovery in Romania

Lower Costs: The streamlined process generally involves fewer legal fees and court costs compared to traditional litigation. This makes it a cost-effective option for businesses, particularly in cases where the debt is undisputed.

Enforceability: The payment ordinance has the same legal standing as a court judgment, meaning it can be enforced through legal means if the debtor fails to comply. This provides creditors with a powerful tool to ensure that debts are paid.