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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 acknowledgement, and (email) correspondence about the outstanding invoices or reasons for not pay.

4 - What is the reason why the debtor is not paying? 
Financial problems? The debt is disputed? This helps to guide debt collection strategy towards attempts to fully collect or look for a settlement or payment plan.

5 - The debtor can be located? 
Essential information includes the full company name or full name of the person, full address details, telephone numbers, cell phone numbers, e-mail addresses and VAT number. It is important to keep such information up to date during the whole commercial or consumer relationship, as it may turn out to be vital once payment problems show up later on.

6 - What is the current solvency of debtor?
Before starting it is essential to be aware of the debtor’s solvency status as well as other data such as pending legal actions. If insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt and if there are pending legal actions against the debtor the chances of collecting decrease substantially.In these cases writing the debt off and stop spending more time or money on something which is practically impossible to collect could happen to be the best solution. It is also important to check company records and relevant financial information (in Portugal publishing yearly financial results is mandatory).

To determine chances for success in collecting a debt in Portugal, we suggest to ask yourself these 6 questions. We can help answer these issues, especially the last two. The answer is crucial to determine the next steps to collect a debt in Portugal.

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