Debt Collection in Romania

Per the Romanian Law, a debt represents the patrimonial right of a natural or legal entity (creditor) upon another natural or legal entity (debtor) to execute an obligation: return goods, money or perform a service.

The Romanian Law stipulates the following methods to end the debt:
 through Common Law
 through Summons of Payment
 through legal methods other than payment, distinguishing: compensation, novation, remittance of debt.

I. THE SUMMONS OF PAYMENT PROCEDURE
This procedure takes place at the creditor’s request with the purpose of executing by free will or forcedly of debts representing obligations of payment of certain amounts, assumed through a written contract or determined through a different statute, regulation or written document, agreed upon by the parties by signing or through another lawfully admitted method and which attests rights and obligations regarding the execution of certain services, work etc.
It is to be underlined that the procedure of Summons of Payment is only applicable to obligations implying payment of certain amounts and is non-applicable to goods.

Important:
The only admissible proof during the Summons of Payment procedure is represented by written documents;
Competence for a Court Decision for a request from the creditor belongs to the Local Court for civil cases, respectively to the Tribunal for commercial cases, not depending upon the value;
The procedure institutes a direct way for the creditor to address a request to the Court without any prior procedure, the first condition for the first hearing being verifying the possibility for the reconcilement of the parties;
In the case where the parties have agreed to end the debt, the Court will emit an irrevocable decision;
Per the Romanian legislation in effect the citation for Court hearings is performed on an urgent basis.

II. OTHER METHODS OF ENDING DEBT
Compensation – represents the method of ending a certain debt through ending 2 reciprocal debts to the limit of the least valuable one.

The compensation can be of 3 types:
- Legal, when operating lawfully, in certain conditions.
- Conventional, when operating through the parties’ convention.
- By Court of Law, when operating through the decision of the Court.
 

The Novation represents a convention through which the parties end an existing obligation with a new obligation.

Important: This solely implies the transformation of the legal positions, the old obligation being replaced by a new one.
The Novation can be of 2 types: a) objective – taking place between the initial creditor and debtor, the only thing changing in their legal positions being the object or cause and b) subjective – implies the change of the creditor or debtor.

REMITTANCE OF DEBT – represents the free waiving of rights by the creditor related to the debt.

III. RECUPERATION OF DEBT THROUGH COMMON LAW PROCEDURES
The Debtor must execute its obligation in the term stipulated by the parties in the contract or if such a term has not been foreseen, as soon as the obligation is assumed. If non-execution of the obligation occurs, the debtor is notified as “late payer” in certain conditions. The notification as “late payer” constitutes a manifestation of the creditor’s will through which the execution of the debtor’s obligation is requested. This can be done in the following manners:
- notification, the formation request (the summon addresses to the debtor);
- start of legal proceedings, through which the execution of the obligation is requested by Court action.
In the trials and requests of a commercial nature, evaluated in money, before the request to start Court proceedings, the claimant shall try reconcilement with the other party. As a result, the claimant will convoke the other party communicating in writing its requests and their legal background, as well as all the documents on which these founded on. The Convocation will be done via a letter sent with a confirmation of receipt, through telegram, telex, fax or any means of communication insuring the transmittance of the document’s text and the confirmation of its arrival. The date set for the reconcilement will not be any earlier than 15 days from the date the letter is received. The document attesting the result of the reconcilement procedure, or that the defendant has not attended the meeting, as well as the proof that from the date of the letter’s receipt a period of 30 days has passed, will be attached to the request for start of Court proceedings.
The obligation established through Court order must be fulfilled by good-will. If the debtor does execute its obligation by good-will, then the Court order will be fulfilled forcedly.

Enescu & Cuc has a very good experience related to the recuperation of debts through the methods described in the present article. Contact us for more information.