Debt Collection in Guatemala: Judicial and Extrajudicial Recovery

## Debt collection in Guatemala Debt collection is the process through which a creditor recovers a sum of money owed to them. In Guatemala, collection processes are regulated primarily by the **Civil and Mercantile Procedural Code (Decree-Law 107)** and the **Civil Code (Decree-Law 106)**. There are two main avenues: **extrajudicial** (direct negotiation) and **judicial** (through the courts). --- ## Extrajudicial avenue ### When to use it? When the relationship with the debtor is good and there is willingness to pay. It is faster and less expensive. ### Steps: 1. **Payment demand:** Formal letter requesting payment, with deadline and consequences 2. **Negotiation:** Agree on a payment plan, discount, or extension 3. **Payment agreement:** Document the agreement in writing 4. **Follow-up:** Verify compliance with the agreement If the debtor does not respond or refuses to pay, proceed to the judicial avenue. --- ## Judicial avenue ### Executive trial (most common for documented debts) Used when you have an **enforceable title**, i.e., a document that proves the debt and allows expedited collection. **Enforceable titles under the Civil Procedural Code (art. 327):** - Bills of exchange - Promissory notes - Checks - Public deed containing an obligation to pay - Confession of debt before a judge - Final court judgment ### Step-by-step of the executive trial: #### Step 1: Prepare the claim Gather: - The original enforceable title - Creditor identification (DPI) - Debtor information #### Step 2: File the claim Filed with the competent **Civil Court of First Instance** (based on the debtor's domicile or the place of payment). #### Step 3: Payment demand and attachment The judge issues a **payment demand** to the debtor. If they do not pay within the stated period (generally 3 days), **attachment** of assets proceeds: - Movable assets (vehicles, equipment) - Bank accounts - Real estate - Wages (up to a percentage) #### Step 4: Auction Attached assets are sold at public auction. The proceeds are used to pay the debt. #### Step 5: Payment to creditor With the auction proceeds, the judge orders payment to the creditor. If there is a surplus, it is returned to the debtor. --- ## Monitorio process For debts not documented with an enforceable title but with evidence of the debt (invoices, contracts, emails). The judge requires the debtor to pay or object. If they do not object, judgment is entered. --- ## Precautionary measures Before or during the trial, the creditor may request **precautionary measures** to ensure the debtor does not hide assets: - Preventive attachment - Lis pendens annotation (on real estate) - Asset seizure --- ## Documents you will need - The debt document (enforceable title, contract, invoice) - Creditor identification (DPI) - Debtor information (name, address, DPI if known) - Communications with the debtor (emails, messages) - If there is a guarantee: mortgage or pledge deed --- ## Authorities involved | Authority | Role | |---|---| | Civil Courts of First Instance | Executive and monitorio processes | | Authorized notary | Drafts extrajudicial demands | | General Property Registry | Annotations and attachments on real estate | | Superintendence of Tax Administration (SAT) | Debtor tax information | --- ## Legal basis - **Civil and Mercantile Procedural Code** (Decree-Law 107), articles 327-400 (executive trial, enforcement) - **Civil Code** (Decree-Ley 106), articles 1641-1655 (civil liability) - **Commercial Code** (Decree 2-70), articles 295-339 (negotiable instruments) - Available at: www.congreso.gob.gt *This article is informational and does not constitute legal advice.*