From Alba Legal your trusted law firm in Albania
Between Albania and Italy, two peoples that are divided only by a sea, as well as a historical and economic bond from which many commercial relationships between companies and private individuals derive. Given the dense network of commercial exchanges, sometimes there is a need to solve strategic problems and one of these is debt collection. From my personal experience, most of the credits to be recovered are from Italy to Albania.
In case you need to take action against a debtor resident in Albania, you must keep in mind the rules that I list below.
Extrajudicial recovery
Convincing a debtor residing abroad, Albania, to pay the credit is very difficult, if the creditor chooses to do it personally from Italy. This is because the debtor in Albania feels protected and unassailable, since he thinks that the creditor cannot act from abroad with the same effectiveness as he can act in Italy. The same perception exists, even if the creditor acted in Italy through his trusted lawyer.
To be effective, extrajudicial recovery in Albania must be conducted by a local lawyer, who plays a very important role especially in conducting extrajudicial negotiations when dealing with the debtor in Albania. By explaining well all the legal consequences that the debtor could face, in the event that he does not reach an agreement, a capable lawyer manages to convince the debtor. The negotiations, based on the lawyer’s skills to reach an agreement with the debtor, can be different and obviously the proposal must also be accepted by the creditor.
The insistence and skill of the lawyer must also be accompanied by the capacity of the debtor and that he has no objection to the existence of the debt. Very often debtors postpone payments not because they don’t want to pay or because they don’t recognize the debt but simply because they think it’s better to pay later than earlier. Then almost all debtors try to arrive at a payment transaction in installments or a reduction in credit based on their willingness to pay.
Even after signing the agreement, a capable lawyer follows the progress of the credit payment if the debtor actually pays.
From my experience, some of these debtors, after having lowered the value of the debt or after having signed an agreement for payment in installments, are correct with the payment of the debt. Other debtors, however, are convinced to pay if they see the notification from the court arriving for the start of the judicial proceedings, relying on the signed agreement as proof.
Obviously the Creditor must have proven the existence of the debt to the lawyer from the beginning with appropriate documents which are invoices, contracts, agreements and other documents or valid evidence that make the credit certain liquid and collectible.
A serious lawyer should state in the most certain way possible from the beginning to the creditor/client the result of his research – where possible – the goodness of the debtor to prevent the creditor from having to go through a useless procedural process and including expenses.
Certainly a sign of the professional’s seriousness is also the service contract that the lawyer must always propose to the client/creditor for both his extrajudicial and judicial recovery actions, making all actions against the debtor certain and obviously also their cost. Some costs may also be hidden due to the inability of the professional to calculate them at the moment, but most of the costs are better disclosed from the beginning so as not to have unpleasant surprises in the future. Be wary of a lawyer who does not offer you a service contract for debt collection.
Judicial proceedings
In the event that all the legal conditions exist before the start of the judicial proceedings or immediately after their start, the professional must request with the appropriate legal institutions of Albanian law the preventive seizure of the debtor’s bank accounts and assets, until the judicial proceedings end with a final sentence.
A lawyer with experience in debt collection knows when to ask for preventive seizure. This strategy can also be useful for getting the debtor who feels forced to negotiate when he sees that his current accounts have been seized, to sit at the negotiating table. For a commercial company, blocking bank accounts also means blocking commercial activity.
Preventive seizure is a strong guarantee for the creditor, because according to Albanian law, preventive seizure freezes the debtor’s current accounts or assets until the end of the judicial proceedings with a final judgment. In this way, the creditor is sure that he will be able to collect the debt.
As regards the judgment itself, this proceeding is a normal procedural procedure where the debtor must prove payment of the credit in response to the creditor’s claims. If he is unable to prove, the judge, convinced of the existence of the debt, issues a sentence condemning the debtor to pay the debt and also the costs of the proceedings.
On the other hand, the legal proceedings, which may not be very technical, could become complicated when the debtor has claims regarding the debt, the goods sold, payments and various deadlines.
Precisely for this reason, in order for the lawyer to do his job as best as possible, the creditor should communicate everything to him, even the smallest detail of the relationship between him and the debtor.
Very important are especially the disputes of the goods sold that the debtor has made against the creditor, or of partial payments that the debtor has made on behalf of the creditor. All these claims could complicate the judgment and also require a specialized assessment report by a subpoenaed accountant.
The enforcement procedure
Once the debt has been ascertained with a final judgment, we proceed with the enforcement procedure, which is implemented with a request from the creditor or his representative with power of attorney to the judicial officer.
In Albania both the service of state bailiffs and private bailiffs function, who have all the powers to execute the enforcement order and the execution order.
The bailiff seizes the current accounts, seizes all the debtor’s assets until the credit is fully paid, also organizing the auction.
All court costs and the costs of the enforcement process are collected by the bailiff together with the amount of the debt.
The same procedure is also provided for in the case in which the creditor has obtained the injunction from the foreign court through the procedure for recognizing the sentences of foreign courts in the territory of the Republic of Albania. This is in the case in which the parties have contractually chosen the foreign court as the competent court.
This sentence, once recognized in Albanian territory by the Court of Appeal of territorial jurisdiction, becomes a full right of credit, otherwise known as an executive title, and once the execution order has also been obtained from the court of first instance, it is executed by the creditor with the judicial officer with the same procedure as above.
The statute of limitations for credits
The ordinary limitation period is 10 years for commercial debts. In this case, excluding the case in which there has not been an interruption of the prescription.
Furthermore, a 6-month deadline is provided for the payment of contractual penalty clauses, subject to verification by the court competent for the territory and subject matter, and in the event that the debtor does not agree to pay them.
The deadline for shipments is 1 year, 6 months for the transport of goods of people, 2 years for insurance cases, 3 years for payments of property rental contracts for non-contractual obligations and unjust enrichment.
For the moment, law no. is in force. 48/2014 “For late payments of contractual and commercial obligations” and an injunction is not envisaged, but an enforcement order.
The professional’s fee
In Albania almost all professionals, in addition to the fee for their work, both in the extrajudicial debt collection and in court, only at the end of the recovery, also ask for a success fee for the recovery. Certainly, the more difficult the debt is to recover, the greater the success rate requested by the professional.
When the professional asks you for the success rate you must accept it because this success rate means that the professional brings all his skills into play in out-of-court negotiations or in the judicial process.
For further information, contact the Law Firm with twenty years of experience in debt collection for a concrete study of the case
