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The Judicial Collection Law (# 8624), effective in Costa Rica since May 20th, 2008, completely changed the way the judicial collection files were processed, and put in order those people who failed to comply with the payment of debts, regardless the amount.
Let´s recall that the judicial collection applies to those who have debts with public or private entities:
- Banks: credit cards or loans
- Financial institutions: loans
- The Social Security Institution (CCSS): late payments of fees or wrongful retentions
- Municipalities: property taxes
- Private persons (people or corporations): Loans
Benefits of the Judicial Collection Law:
Legislation 8624 introduced major changes for the benefit of the creditor, such as:
- Specialized courts were created to present and process directly the judicial collection claims
- Oral proceedings were included in the judicial collection process; a tool that accelerates the legal process
- The law establishes that debtors can suffer the seizure of wages or the auction of properties
- The judicial collection process went from several years to just some months to be finished
- Technological tools were implemented, such as the electronic file, to streamline procedures and notifications, and the management of documents
The time frame is perhaps the most important issue of Law 8624, because the judicial collection used to take three years or more, but now the process is reduced to three to eight months.
How does the judicial collection process works now?
Before the Judicial Collection Law, the debtor was demanded and he/she had a time of grace to replicate; then there was a hearing for the presentation of evidence and then, the judge issued a judgement. This process used to take at least three years.
With Law 8624 the judicial collection process became more expeditious:
- 1. The debtor receives a notification (auto intimatorio) that indicates the amount owed; from that moment on he/she has 15 days to respond.
- 2. If the debtor does not oppose to the judicial collection claim or opposes baseless, the resolution becomes a sentence and opens up the possibility to seize his/her wage or auction his/her properties or vehicles, in order to recover the debt.
- 3. If the debtor provides a based response, the judge in charge of the collection process will issue a private oral hearing where the parties shall be present to discuss the case, submit evidence and give a final judgment. This process takes a few months, but time will depend on the amount of work that the Court has.
ERP Lawyers, experts in collection management
As the best “boutique” Law Firm in Costa Rica, ERP Lawyers & Associates has extensive experience in handling judicial collection processes, serving public and private companies, and citizens in general (domestic and foreign).
Our expert lawyers will provide you an integral and efficient legal service that meets your needs and ensure you the recovery of the amounts and/or assets owed.
Contact us:
(506) 2520-1122
eduardo@erplawyers.com
jose@erplawyers.com
