Debt recovery procedures in Romania
Updated: Oct 21
Debt recovery is a common issue in commercial and business relationships. In Romania, there are several legal procedures through which creditors can recover debts from debtors who have not fulfilled their financial obligations. It is advisable to consult with a debt recovery lawyer before initiating judicial procedures to choose the most effective method for your situation as sometimes you might risk losing your rights.
This article will detail the most efficient and commonly used debt recovery methods, the general aspects of the procedures involved, admissibility requirements for filing a lawsuit, burden of proof, and will provide a general cost and time estimate for each type of procedure.
Amicable Debt Recovery. Payment Notice Template
Amicable debt recovery is, of course, preferable to any judicial procedure. Amicable settlement endeavours commence by notifying the debtor about the outstanding payment obligations with an explicit request to settle the debt in a certain grace period. For more authority, the creditor can contact the debtor through a debt recovery lawyer.
At this stage, the creditor can send a paymentnotice / summons (template), a formal document requesting the debtor to fulfill their payment obligations within a specified period of time. Usually, the payment notice is sent by courier or postal services with acknowledgment of receipt or through an enforcement officer of the state.
Content Requirements for a Payment Notice
A payment demand should include the following elements:
Identification details of the creditor and the debtor.
The amount owed and details regarding the debt (e.g., invoices or relevant contracts).
The grace period granted for payment, usually around 15 days, although there is no universally applicable standard.
A warning that in case of non-payment, the creditor will resort to legal debt recovery procedures.
Cost Estimates for Sending a Payment Demand
Amicable recovery does not involve significant legal costs. Download the payment notice template from Docs & Deeds at very low costs. The costs for sending the demand by mail or courier are low, usually under 100 lei. The judicial costs for sending the demand through a judicial executor are also not significant – around 150-300 lei in addition to courier service costs.
If you wish to consult with a debt recovery lawyer before sending the demand, fill out the contact form or schedule a legal consultation directly.
Payment Order Procedure. Payment Order Template.
The payment order procedure is a simplified and quick method of debt recovery. It is probably the most used debt recovery procedure as it is easily accessible to all creditors, court deadlines are short, and the court decision can be quickly enforced.
However, not every creditor can use the payment order procedure. If you want to recover a debt, it is important to understand the admissibility conditions of this procedure and whether your debt meets them. Otherwise, you risk wasting time and incurring unnecessary costs.
What Types of Debts Can Be Recovered through the Payment Order Procedure?
The payment order can be used for certain, liquid, and due debts that involve the payment of a sum of money and are based on a contractual relationship.
According to art. 1.014, para. (1) of the Code of Civil Procedure: “The provisions of this title apply to certain, liquid, and due debts consisting of payment obligations that result from a civil contract, including those concluded between a professional and a contracting authority, established by a written document or determined according to a statute, regulation, or other document assumed by the parties through signature or otherwise accepted by law.”
What Debts Result from a Civil Contract?
A debt results from a civil contract when a contractual relationship is established between the creditor and the debtor. There is an agreement of will regarding the delivery of goods or the provision of services (about service provision).
It is not absolutely necessary for the contractual relationship between the creditor and the debtor to be documented in writing – although this is preferable for evidentiary purposes, making it much easier to prove.
The contract between the creditor and the debtor that allows debt recovery can also result from: an offer followed by execution, issued and accepted invoices, online orders followed by product delivery. Here are excerpts from court decisions where the payment order for debt recovery was admitted even though there was no unitary contractual document between the parties:
“The court observes that the debtor’s payment obligation results from the invoice filed in the case file, this being evidence proving the existence of a consensual commercial contract for which the parties did not, however, prepare a written instrument” (Brașov Court, Civil Judgment 9617/2021).
“The creditor demands the debtor to pay the amount of 742,326 lei representing the unpaid principal debt, whose existence is evidenced by the fiscal invoices” (Arad Court, Civil Judgment No. 2474/2021).
When Is a Debt Considered Certain?
A debt is considered certain when its existence and amount are known or determinable. This means that the debt is clearly specified as a fixed sum in a contractual document, or its amount can be easily calculated based on a predetermined formula.
When Is a Debt Considered Liquid?
A debt is liquid when its object is determined and assessable in money. There may be documents that clearly establish the value of the debt, such as contracts, invoices, payment orders, etc.
When Is a Debt Considered Due?
A debt is due when it has reached its maturity date without the debtor having made the payment. Due debts may also attract late payment penalties, especially in contractual relationships between a creditor and a debtor engaged in business (professionals). Late payment penalties can exist even if they are not stipulated in the contract. According to art. 2 of Government Ordinance No. 13/2011: “In case the obligation carries remunerative and/or penalizing interest according to legal provisions or contractual terms, and in the absence of an express stipulation by the parties, the legal interest corresponding to each of these will be paid.”
Myth about the Payment Order: The Debt Must Not Be Contested
It is often said that for debt recovery through the payment order, the debt "must not be contested," and many creditors are discouraged from using this procedure knowing they are dealing with a recalcitrant debtor.
So what does “uncontested debt” mean? The simple assertion of the debtor that the debt does not exist is not sufficient. It would be absurd considering that the payment order is used precisely when the debtor refuses to voluntarily settle the debt. In reality, for the successful promotion of a payment order, the creditor must prove the debt and the previous admissibility conditions based on the documents in the case file and the explanations the parties provide during the trial, without requiring complex evidence (such as a technical expertise report). If this proof exists, the debt is considered proven – that is, “uncontested” – and the order will be admitted.
Requirements for Debt Recovery under a Payment Order
The payment order claim template must include:
Identification details of the creditor and the debtor.
The amount owed and the justification of the debt.
Evidence of prior notification of the debtor (copy of the payment notice).
Copies of documents proving the debt (contracts, invoices).
Court Procedure for the Payment Order
The creditor files the request with the competent court, which examines it without summoning the parties. If the request is founded, the court issues the payment order, which is enforceable. The debtor can contest the order within 10 days from its communication.
The payment order is enforceable even if it is challenged with an annulment request and has provisional res judicata authority until the annulment request is resolved. This means that if the creditor obtains the payment order, they can immediately enforce the debt through a judicial executor.
The payment order becomes final as a result of not filing or dismissing the annulment request, which is the specific appeal route for this debt recovery procedure.
Estimated Costs for the Payment Order Procedure
The stamp duty for filing a payment order request is 200 lei. If you choose to be represented by a litigation lawyer (read about the benefits of court representation), you will also pay the lawyer's fee, which starts from approximately 500 lei per court session, depending on the value and complexity of the case.
Additional costs may arise if the losing party files an appeal.
Duration of the Payment Order Procedure for Debt Recovery
According to the law, if the debtor does not contest the debt by defense, the payment order will be issued within a maximum of 45 days from the filing of the request. If the debtor denies the existence of the debt or contests its amount, the procedure may have 1-3 court terms (1-3 months), and in some cases, longer.
The decision of the first instance regarding the issuance of the payment order can be appealed with an annulment action, which can add approximately 6 months to the resolution time.
Debt Recovery in Insolvency Procedure. Application for Claim Registration (Template).
The insolvency procedure applies when the debtor is insolvent, meaning they cannot pay their due debts with the available cash funds. The insolvency procedure is a complex procedure that can lead to the reorganization or liquidation of the debtor, and the deadlines available to creditors for debt recovery are usually short and fixed. It is advisable to use an insolvency lawyer to streamline the debt recovery process.
What to Do If You Are a Creditor and the Debtor Has Entered Insolvency?
If you are a creditor and a debtor has entered insolvency due to their inability to pay their certain, liquid, and due debts with the available cash funds, you must file an application for registration in the creditor list to recover the debt.
According to art. 102 of the Insolvency Law: “Except for employees whose claims will be recorded by the judicial administrator according to accounting records, all other creditors whose claims are prior to the opening of the procedure will file an application for the admission of claims within the deadline set in the opening decision.”
Since the insolvency procedure is a collective and egalitarian process, the legal doctrine has consistently emphasized the comprehensive nature of the legal provisions mentioned, based on which all types of claims are admitted to the creditor list, including those affected by terms or conditions:
“Conditions of claims being certain, liquid, and due are required only for triggering the procedure; subsequently, claims that do not meet these conditions will also be satisfied. In fact, even for initiating the insolvency procedure, it is not required that the claims be established by an enforceable title. Holders of unchallenged claims will also file an application for admission of claims” (Stanciu D. Cărpenaru, Mihai Adrian Hotca, Vasile Nemeș, The Insolvency Code Commented. Law No. 85/2014 on Insolvency and Insolvency Prevention Procedures, Universul Juridic Publishing House, 2014, p. 285).
The existence and extent of the claim will be verified by the judicial administrator/liquidator, and based on the results, the creditor list will be drawn up with the creditors whose claims have been admitted for recovery. According to art. 105 of the Insolvency Law: “All claims will be subject to the verification procedure provided by this chapter, except for claims established by enforceable court decisions and enforceable arbitration awards.”
Be aware that failing to file an application for registration in the creditor list within the deadline can lead to the loss of the right to the claim. Ask an online lawyer for details on this subject.
What Claims Can Be Recovered in the Insolvency Procedure?
Generally, in the insolvency procedure, claims prior to the opening of the procedure are recovered – those that became due before the opening of the insolvency procedure. The due nature of a claim means that the payment deadline has been reached, and the debtor has not made the payment according to contractual obligations. In the specialized literature, it has been established that “the determination of the anterior or posterior nature of a claim concerning the opening date of the procedure is resolved in relation to the date of the claim’s origin and not in relation to its origin” (Ion Turcu, The Insolvency Code. Law No. 85/2014. Commentary on Articles, 5th Edition, CH Beck Publishing House, p. 287).
Due claims are those that can be immediately requested after the opening of the insolvency procedure, and creditors must register their claims in the creditor list to recover the owed amounts (download the template claim for registration in the creditor list).
Debt recovery in the insolvency procedure can include commercial debts, bank loans, unpaid taxes and fees, and outstanding salaries. It is also essential for creditors to register their claims within the deadline set by the court to participate in the distribution of funds resulting from the liquidation of the debtor's assets.
Post-Opening Insolvency Procedure Claims Can Also Be Recovered
Claims arising after the opening of the insolvency procedure can be:
Unmatured or conditional claims at the date of opening the insolvency procedure – for debt recovery, debts in this category must be included in the creditor list.
“Current claims” are those arising after the date of opening the procedure during the observation period or in the judicial reorganization procedure – they will be paid according to the documents from which they result without needing to be registered in the creditor list. This category includes administrative costs, operating expenses, and other expenses necessary for the continuation of the debtor’s activity.
The claim of an injured party in a criminal trial is registered under a suspensive condition until the final settlement of the civil action in the criminal trial in favor of the injured party. In this case, it is also necessary to file an application for the admission of the claim in the creditor list.
Debt Recovery According to Category in the Insolvency Procedure
Since the insolvent debtor does not have sufficient cash funds to pay all debts, the reorganization plan will establish the rules for distributing funds to various categories of creditors, while the law also provides an order for debt recovery in the case of bankruptcy. For details, we can connect you with a specialized insolvency lawyer.
The main categories of claims are:
Administrative costs of the procedure, such as taxes, stamps, and any other costs related to the sale of assets, costs necessary for the preservation and administration of these assets, costs advanced by creditors in enforcement proceedings, claims of utility providers arising after the opening of the procedure, remuneration due at the time of distribution to persons employed in the common interest of all creditors.
Salary claims – these are claims arising from labor relations and relations assimilated between the debtor and its employees. These claims are registered ex officio in the creditor list by the judicial administrator/liquidator, having priority for employee protection.
Claims benefiting from a preference cause, such as the claims of creditors who have a real or personal guarantee – these are satisfied with priority from the realization of the assets on which the guarantees apply.
Budget claims – represented by taxes and fees owed to the state and represent a priority category of claims to be recovered.
Unsecured (chirographic) claims – the remaining claims not secured by guarantees, such as various service providers and commercial creditors, are satisfied from what remains after covering the other priority categories.
When Is the Insolvency Procedure Opened Against a Debtor?
Insolvency is the state of the debtor’s assets characterized by insufficient cash funds to pay certain, liquid, and due debts. Insolvency is presumed when the debtor, after 60 days from the due date, has not paid their debt to the creditor, the threshold for non-payment being 50,000 lei. In other words, whenever a debtor has due and unpaid debts for more than 60 days, and they exceed the threshold value, a request to open the insolvency procedure can be filed.
The request to open the insolvency procedure can be filed by the defaulting debtor or by creditors whose claims meet the admissibility requirements. If creditors have the option between opening insolvency and recovering debts through alternative methods, the debtor in a state of insolvency is obliged to file the request to open the procedure, risking even criminal sanctions.
Estimated Costs and Time for Debt Recovery in Insolvency
Among the available debt recovery procedures in the law, probably the most challenging to anticipate is debt recovery within the insolvency procedure. The stamp duty for requests filed in the insolvency procedure, including for debt recovery, is usually 200 lei. Additional costs may include lawyer fees and possible administrative expenses.
The time for resolving the debt recovery request in insolvency is, however, impossible to predict. Generally, insolvency procedures are lengthy, involving multiple challenges filed by various creditors or even debtors, and can extend over several years. Nevertheless, insolvency is opened precisely because the debtor does not have sufficient cash funds, which means there is never a guarantee that creditors’ debt recovery efforts will be successful.
Debt Recovery Based on Contractual Liability. Ask a Lawyer Online.
A lawsuit based on contractual liability is used when debts cannot be recovered through other simplified procedures. This lawsuit is based on the debtor’s breach of contract by non-payment of the debt or by delays in payment.
The elements of a statement of claim for debt recovery are similar to those of a payment order request, with the distinction that there are no limitations regarding the nature, the object of the debt, or the means of proof available to the creditor.
General Procedure
The creditor files the lawsuit with the competent court, typically within a maximum of 3 years from the due date of the unpaid obligation. The debt recovery lawsuit will be analyzed by a court panel through multiple procedural stages: first instance, appeal, and recourse. The creditor and debtor are summoned to all court hearings and have the opportunity to present their arguments and evidence in support of their positions. The court issues a judgment which, as a rule, can be enforced after the appeal is resolved.
Estimated Procedural Costs for a Debt Recovery Lawsuit Based on Contractual Liability
The stamp duty for claims - also known as debt recovery requests arising from contractual breaches - is calculated based on the value of the debt:
Up to the value of 500 lei - 8%, but not less than 20 lei;
Between 501 lei and 5,000 lei - 40 lei + 7% for the amount exceeding 500 lei;
Between 5,001 lei and 25,000 lei - 355 lei + 5% for the amount exceeding 5,000 lei;
Between 25,001 lei and 50,000 lei - 1,355 lei + 3% for the amount exceeding 25,000 lei;
Between 50,001 lei and 250,000 lei - 2,105 lei + 2% for the amount exceeding 50,000 lei;
Over 250,000 lei - 6,105 lei + 1% for the amount exceeding 250,000 lei.
In fact, debt recovery lawsuits based on contractual liability are among the most "expensive" types of lawsuits. And in these conditions, why are they used? Because most debtors do not have another debt recovery procedure available. All other debt recovery methods require fulfilling certain admissibility conditions or are restricted in terms of evidence in such a way that they do not ensure sufficient chances of success.
Duration of the Court Process for a Debt Recovery Lawsuit Based on Contractual Liability
A reasonable estimate for the duration of a common law debt recovery trial is one year at the first instance, with an additional one to one and a half years for resolving appeals. If the parties manage their evidence efficiently, the overall duration of the procedure can be shortened.
What Happens After a Favorable Debt Recovery Judgment Is Issued?
Unfortunately for creditors, obtaining a favorable debt recovery judgment does not always mean that the payment will be made by the debtor. Most debt recovery judgments require enforcement through a judicial executor, who establishes enforcement measures such as garnishments, asset seizures, or public auction sales.
Low-Value Debt Recovery Claims
Low-value debt recovery claims are a simplified and efficient method for recovering debts not exceeding 10,000 lei at the time of filing the claim. These are regulated by the special procedure provided in the Code of Civil Procedure and are intended to ensure a quick and cost-effective resolution of small-value disputes.
The threshold value refers to the principal debt to be recovered, excluding interest, penalties, and other ancillary costs of the debt.
Filing a Low-Value Debt Recovery Claim
The debt recovery claim must be accompanied by documents proving the debt, such as invoices, contracts, or other relevant documents. A standard form provided by state authorities can be used by the creditor wishing to use this procedure.
The low-value claim cannot be used in fiscal, customs, or administrative matters, nor in matters concerning the state's liability for acts or omissions within the exercise of public authority. In other words, the creditor cannot recover fiscal or administrative debts using this procedure.
Court Procedure for Low-Value Debt Recovery Claims
The procedure for recovering low-value debts is written and takes place entirely in the judge's chambers. The competent court (judiciary) may decide to summon the parties if deemed necessary or at the request of one of the parties, but can refuse this request, providing written reasons without the possibility of separate appeal.
After receiving the correctly completed claim form, the court sends the defendant the response form, along with a copy of the claim and the documents submitted by the claimant. The defendant has 30 days to submit the response and relevant documents. The court immediately forwards the defendant's response copy and any counterclaims to the claimant.
If a counterclaim is filed, the claimant has 30 days to respond. If the counterclaim cannot be resolved in this procedure, it will be severed and judged according to common law. The court may request additional information and may admit other evidence than those initially submitted, provided they do not involve disproportionate costs relative to the claim value.
The court may set hearing dates for the parties' appearance, who will be duly summoned and have the opportunity to present verbal arguments in support of their positions. The court can issue a judgment to admit or reject the claim, which can be immediately enforced. The losing party may file an appeal.
Costs and Duration of Judging a Low-Value Debt Recovery Claim
The stamp duty for low-value claims is proportional to the value of the debt: 50 lei if the claim value does not exceed 2,000 lei or 200 lei for claims exceeding 2,000 lei.
Therefore, this debt recovery procedure has lower costs compared to other methods available to creditors. Additionally, low-value debt recovery claims are resolved quickly due to the simplified procedure. According to the law, the judge will issue and draft the judgment within 30 days from receiving all necessary information or, as the case may be, from the oral debate.
Which Debt Recovery Procedure to Choose as a Creditor?
The answer is not universally applicable. The selection of a debt recovery procedure depends on the nature and value of the debt, the relationship with the debtor, and the costs you are willing to incur. For small amounts (under 10,000 lei), the low-value debt recovery procedure is efficient and expedient, being conducted entirely in writing and avoiding significant expenses. This method facilitates debt recovery without the need for complex litigation, offering a cost-effective and time-efficient solution.
The payment order procedure is ideal for certain, liquid, and due debts arising from contracts, offering a quick debt recovery solution. However, this method of debt recovery is not always accessible, as the admissibility conditions provided by law must be met.
For high-value debts or those whose existence is disputed, debt recovery claims based on contractual liability may be the only viable option. Creditors have the possibility to manage complex evidence, which increases the chances of success.
In cases where the debtor is insolvent, you might not have options: filing a claim for registration in the creditor list is the only way to ensure that after opening the insolvency procedure against your debtor, your rights are preserved.
In any case, it is best to consult with a lawyer specialized in debt recovery before deciding on the procedure to choose. There are serious risks if your choice is wrong, including losing deadlines for debt recovery or risking the dismissal as inadmissible or unfounded of a lawsuit. Ask an online lawyer how to proceed, and in the end, you will save time and money resources!
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