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IS IT POSSIBLE TO DEMAND DEBTOR TO PAY INTERESTS AND COMPENSATION FOR DEBT COLLECTION COSTS?

 The first stage in any hard collection process is to issue a final notice to the debtor whereby the debtor is requested to pay the principal amount together with any statutory or agreed (a supplier and purchaser can make their own arrangements) penalty interest or compensation for collection costs. The final notice can be oral, but it is better to put it in writing as it makes it easier to prove that notice has been sent. Under Portuguese law, the creditor has the right to claim interest and compensation for debt collection costs.

Statutory right to interest
According to Decree-Law no. 62/2013, of 10 May (under the European Directive 2011/7/UE combating late payments in commercial transactions), creditors have the statutory right to claim interest for late payment at the European Central Bank base rate plus 7%. Interest is normally payable from the end of the agreed credit period. If no credit period was agreed, interest is payable 30 days from the later of:
- The date of supply, or;
- The date the buyer was told the amount due;
- The conclusion of any procedure for checking that the goods conform to the contract (and the procedure itself cannot take more than 30 days).
If concerns to a public authority, interest will be payable after 30 days, even if a longer payment date was agreed (except for health care providers, concerning these entities the period may be 60 days).

Compensation for debt collection costs
The creditor is also entitled to compensation for recovery costs for a minimum sum of  €40 without the need for a formal request. Notwithstanding, the creditor has the possibility of providing evidence that he incurred in a reasonable amount of higher costs (in particular lawyers’ and paralegals’ fees), and claiming for a higher compensation.

In brief, when is the case of a commercial supply of goods and services, for invoices that are not paid on time, the creditor can claim interests and debt collection costs.

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HOW TO SUCCESSFULLY COLLECT A DEBT IN PORTUGAL

To evaluate the chances to successfully collect a debt in Portugal, one should ask the following main six questions: 1 - Is the debt business or consumer related? Business-related debts often have more chances to receive an immediate positive response than consumer debts. So if the debtor is a company, there are more chances of collecting the debt, unless de company is insolvent or out of business. 2 - How old is the debt? The age of the debt is critical. Despite the fact that in Portugal the period of limitation is 20 years, the older overdue invoices are, the more difficult it becomes to collect. 3 - Are there documentation to support the debt?  To make a strong case towards the debtor, and to start legal actions to enforce payment of overdue invoices or a contractually agreed payment, it is mandatory on file the documentation that supports the claim. Supporting documentation regarding the debt may consist of contracts, invoices, order forms, order confirmations, debt acknow