In the following section we will present the ground rules regarding the debt collection procedure in Romania but before that we want to give you some hints on how to prevent getting in this unpleasant situation when doing business in Romania.
Before concluding a commercial contract with a Romanian commercial partner, a foreign entity should check its financial situation and some information regarding its reputation in the business environment and past activity. This data makes it possible for you to distinguish between different companies and to avoid those that already had payment litigations or do not have the economic strength or behaviour you may require. There are several Government and Non-Government bodies that can provide information in this respect such as: Trade Registry, Finance Ministry, The Payment Incidents Department of the Romanian National Bank and the Romanian Tribunal or Courts.
Besides these, you can contact several companies, in Romania but now also in the Netherlands ( www.legal-finance.com), specialized in debt collection and in offering preliminary information regarding a Romanian firms. For a fee they can provide all the available information regarding a potential commercial partner. They draw a report containing important information regarding the potential commercial partner (identifying data, shareholders and Administrators, exports and imports, payment incidents, litigations, pledges, mortgages, balance sheet, profit & loss account, liquidity, solvability, profitability, etc.) and they also can represent the creditor in collecting procedure of receivables, both outside and in court.
Legal procedure of recuperating a commercial receivable
In order to recuperate the money owed on the basis of a commercial report, Romanian Law stipulates the following ways:
1. Ordinary procedure, according to common law
Romanian Law (Civil Procedural Code) stipulates that a creditor should choose this procedure if the debt it has against the debtor is not evident and the judge would be required to appreciate if its claim is entitled or not. If the judge will declare the claim valid, he/she will convict the debtor to pay an amount in cash or in kind in order to recover the debt.
The disadvantages of this procedure are that it is costly and usually very slow.
2. Special procedure, payment summon
In order to recuperate a commercial debt, a foreign company can also initiate a special legal procedure called payment summon. The Romanian Law (Government Ordinance G.O. no. 5/2001 regarding the payment summon procedure subsequently modified) allows a creditor to start the payment summon procedure in order to recuperate its debts only if they result from a written commercial contract legally concluded and if they are certain, doubtless, liquid and overdue.
Consequently, in this special procedure the judge is not asked to observe the breaching of the contract or the guilt of one of the parties but only to check if the debt meets the legal requirements (written contract, certain, doubtless, liquids and overdue) and if he/she observes the fact they are not met, he/she would irrevocably reject the payment summon request. In this case, the creditor will have the right to start the usual procedure to recuperate its debt.
The debts, interests and penalties (if any) calculated according to the Law stipulations will be updated with the inflation rate applicable at the date of the effective payment.
The creditor must deposit at the Tribunal the request of starting the payment summon procedure that must include all the elements prescribed in the law.
The judge must meet the parties in the Tribunal in order to ask their explanations and to ask the debtor to pay the debt or for the agreement of the parties regarding the payment means.
In this stage:
If the creditor receives its debt or declares that it is satisfied with the agreement reached with the debtor, the judge will irrevocably close the file; If the file is not closed, the judge must analyze the request on the basis of the documents already deposited and the explanations of the parties:- If he/she considers that the creditors claims are justified, he/she issues the payment summon containing the payment term, which must be between 10 and 30 days.- If he/she considers that the creditors claims are not justified, he/she irrevocably rejects it. In this case, the creditor will have the right to start the usual procedure to recuperate its debt.
The advantages of this procedure are that it is much quicker than the ordinary one due to fact that the required proof of the claim and the appeal procedures are much reduced. Moreover the procedure is not at all expensive (the tax is less than ? 10).