Practical Guide To International Debt Collection in Dominican Republic

  • Dominican Republic
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Dominican Rep

Is there a minimum amount to start a legal action?

There is no minimum amount to collect a debt in the Dominican Republic.

The statute of limitation for the collection of debts is 20 years.

Will the due amount condition the type of procedure?

In our legal system, which is civil based, the amount owed does not determine how the debt will be collected. The procedure is impacted whether the debt is secured or not.

Interim and enforcement measures of protection can be taken without a judge’s authorization when there is a secured credit. A secured debt is based on a promissory note authenticated by a Public Notary or a court order.

Is it mandatory to send a warning letter before taking legal action to collect a debt?

The Dominican Civil Procedure Code requires serving a warning or request for payment via bailiff and putting the debtor in arrears for at least 3 calendar days in order to initiate a debt collection and file the lawsuit in Court.

What are the best practices for creditors to increase the possibility to recover the debt?

The debts shall be in writing. It is best to have a promissory note duly authenticated in the presence of a Public Notary. Other documents useful to prove the debts are invoices, contracts, and purchase orders.

It is an important practice to confirm the solvency or financial standing of the debtor prior to initiating the collection procedure.

How can a foreign creditor start a procedure for international debt collection in the Dominican Republic?

The first step is to grant power to a Dominican attorney. Since self-representation is not allowed in the Dominican Republic’s civil proceedings, a lawyer is strongly advised since very early stages (and even in extrajudicial procedures). Legal terms, local bureaucracy, and the complexity of judicial procedures, would be better understood and handled by a Dominican attorney, who may also work hand in hand with your local attorney.

There is no mandatory mediation for debt collection processes. However, attorneys can mediate prior or during judicial proceedings.

Which documents are necessary for the debt collection in the Dominican Republic?

The creditor is required to prove the debt in writing. Any document containing and proving the obligation should be presented in court.

What happens after the first demand of payment?

If the debtor decides to directly pay prior to filing the claim in court, the debtor should request the creditor for a release indicating the debt has been paid in full or partially.

If an agreement is reached during the process, such agreement should be filed in court for the judge’s approval and archive of the case.

If for any reason the debtor does not appoint a lawyer to represent him, the process will continue in his absence. In this case, the court will evaluate the evidence and arguments presented only by the creditor and will decide based on such evidence. This judgment shall allow the creditor to collect the debt.

Can interim measures be taken?

Interim and enforcement measures of protection are available and recommended to the parties to secure the debtor’s assets. The interim measures of protection available to the parties to secure such assets include:

  • a attachment of moveable property;
  • b freezing of bank accounts and other financial instruments;
  • c establishment of compulsory mortgages establishing a prohibition on selling or encumbering real property; and
  • d the filing of a lis pendens on the title deed to the property.

These measures are available to any party with credible grounds and a legal interest in being granted security. However, unless the requesting party has a secured credit, an authorization must be requested before the competent judge in order to apply one or more of the interim measures of protection indicated above.

If the recovery was not possible for any reason, is there any other action that the creditor could take to write off such debt in its accountancy?

For tax and accounting purposes, the deduction for losses caused by bad credits that have their origin in commercial operations, will only be admitted by the Tax Administration when it is duly justified and corresponds to the year in which such losses occur, which may be proved by several methods: by a formal suspension of payments, bankruptcy, the debtor's insolvency, a settlement agreement, the statute of limitations, a compulsory debt collection, or other factors of bad debt.