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Executive Trial and Credit Execution

Wolfenson Lawyers provides legal advice for the execution of credit or debt titles.

It is essential to have good legal representation in judicial and extrajudicial collection processes, for the success of our claims. It is in this way that our law firm provides adequate legal advice for the effective collection of instruments or credit instruments such as promissory notes, checks, invoices, among others. Through the initiation of a prior extrajudicial collection until reaching judicial collection through the executive procedure of seizure of movable and immovable property.


Wolfenson understands the value of our clients' work, which is why we provide timely legal guidance in the judicial collection procedure.

Here is a legal guide to provide you with guidance on the enforcement procedure:

What is the executive procedure?

The executive procedure or executive trial is a procedure of general application, which aims to fulfill any obligation that is contained in an undisputed document, which the law considers as an executive title . This procedure leads to the realization of the debtor's assets ( seizure and subsequent sale of them) for the purposes of complying with the obligation.


In the executive trial in Chile , if the executed (defendant) remains inactive and does not oppose exceptions or opposition within the legal term , the pronouncement of the final judgment will be omitted and the judicial resolution called “execution order and embargo” will do the times of this, being considered enforced for all legal purposes . This means that the sale of your assets will proceed until the debt has been satisfied.

What are the exceptions in the executive trial?

The law exhaustively lists the exceptions that the executed (debtor) may oppose in Article No. 464 of the Code of Civil Procedure . They are:

1. The incompetence of the court before whom the claim has been presented;
2. The lack of capacity of the plaintiff or legal personality or representation of the person who appears on their behalf;
3. The litigation-pendency before a competent court, provided that the judgment that gives rise to it has been promoted by the creditor, either by way of claim or counterclaim ;
4. The ineptitude of libel for lack of any legal requirement in the way of formulating the demand, in accordance with the provisions of article 254 ;
5. The benefit of excussion or the expiration of the bond;
6. The falsity of the title ;
7. The lack of any of the requirements or conditions established by law for said title to have executive force , either absolutely, or in relation to the defendant;
8. The excess of appraisal in the cases of subsections 2 and 3 of article 438;
9. The payment of the debt ;
10. The referral of the same;
11. The granting of waiting or the extension of the term ;
12. The novation ;
13. Compensation ;
14. The nullity of the obligation ;
15. The loss of the thing due, in accordance with the provisions of Title XIX, Book IV of the Civil Code;
16. The transaction;
17. The prescription of the debt or only of the executive action ; and
18. The res judicata.


Executive titles admit perfect and imperfect executive titles as a classification. The former allow the creditor to immediately start the execution through the executive procedure , while the latter require "preparatory management of the executive route" to pursue debt compliance. Article No. 434 of the Code of Civil Procedure enshrines the so-called perfect titles.

What do I need to start an executive judgment for non-payment of debt?

In order to start, it is necessary that 4 budgets are present :

1. Existence of an executive title containing the obligation to be fulfilled

2. The obligation must be liquid

3. The obligation must be currently payable

4. The obligation must not be prescribed

How to judicially collect a promissory note?

To collect a promissory note, it is necessary to make the protest of the same by notifying the debtor, it will only be exempted from said requirement if the parties have expressly waived said protest at the time of agreeing on the promissory note . Once this action has been carried out, it is already possible to initiate the executive collection through a lawsuit before the competent Civil Courts of Justice , accompanying the respective title (protested promissory notes) through the legal advice of our specialist lawyers.


How to judicially cash a check?

To judicially cash a check , said check must be protested by the debtor , by means of a non-payment order to the bank . Subsequently, the executive route must be prepared through a judicial action (preparatory management) , notifying the debtor through a judicial receiver and accompanying the protested checks to the cause and hearing of the court. If the debtor does not make a charge of falsehood within the legal term, the title will be perfected to begin with the action of seizure of assets.

How to judicially collect an invoice?

In order to judicially collect an invoice , it is first of all required to verify whether or not this invoice was rejected by the debtor through the Internal Revenue Service system within the legal period of eight days. If it is not rejected within the term, Law No. 20,727 on Electronic Invoicing , establishes that it must be understood as irremediably accepted and it is possible to initiate, then, the executive procedure of seizure of goods through Wolfenson's lawyers.

What are the most recommended instruments for documenting a debt? Will I pay, acknowledge a debt or check? 

Wolfenson’s attorneys recommend the subscription of a promissory note or a transaction by public deed. This is given by the nature of the executive title and the possibility of directly demanding enforcement without the need to prepare the executive path. That is, the release of the obligation to protest, or the possibility of incorporating acceleration clause, among others.

In addition, there is the possibility to document through debt recognition. It is an instrument where our debtor will recognize that he has an outstanding obligation to us. While it is useful, care should be taken to be signed by public deed for the purpose of a magazine rack with the quality of perfect title, and thus be able to execute it in an executive procedure without first going through an ordinary procedure, being highly recommended to have the legal advice of a Wolfenson judicial collection attorney.

Finally, the cheque will always be a good way to document an obligation, since, after notifying your protest through a preparatory management, it will be a perfect executive title. However, unlike the promissory note, the cheque must always be protested before the start of the execution, in addition to preparing the executive route, which makes it a slower instrument, without prejudice to the fact that, the non-payment of a check enables the filing of criminal proceedings such as the crime of intentional draft of a cheque, which in many cases facilitates the judicial collection and payment of the same.


What happens in the case of a service or sales contract?

Contracts for the provision of services or sales do not have greater facility in obtaining payment for the obligations contained in them, unless they are signed by public deed. In that case it will be possible to start the execution without further formality.


What are the advantages of public deed in court collection?

In the appreciation of our specialist lawyers, public deed, as we have stated above, is one of the best ways to document obligations of all kinds. This is due to its characteristics:

1.    First, it constitutes an executive title, that is, it will serve as a basis for initiating an executive trial with all the advantages that this entails.

2.    It has important probative value in court by having the signature of a minister of faith. In other words, the scriptures are full proof of the date of its granting, the fact that it was signed by the parties listed therein and the fact that it was given before a minister of faith.


What strategy to take in case of non-payment or fulfilment of an obligation or debt?

When a payment is not paid, it is possible to resort to various strategies and attitudes that will imply a lower or greater percentage of success.

Before collecting any credit, the first thing to consider is under what title it is documented.

Another relevant element is to bear in mind that there are two stages of collection: judicial collection and extrajudicial collection. Each of the above explain our expert lawyers, has its particularity, both in its effectiveness and in the costs that implies. It is essential to examine first the debtor, location and potential for effective payment.


What is extra-judicial collection?

Before going to the Courts of Justice with the aim of filing a lawsuit, it is possible to opt for previous alternatives, of lower costs and greater agility, a good example of the above is extrajudicial collection. Our attorneys at Wolfensondefinen out-of-court or prejudicial collection like all actions that aim to collect a debt, but that are prior or alternative to a trial.

According to the above, there are a number of tools that will help us to try to get payment and lower expenses than those of starting a trial. Among these methods we can list the following:

•    Protesting the default instrument in Dicom.

•    Certified Letter of Extrajudicial Collection.

•    Administrative collection.

•    Out-of-court negotiations.

•    Out-of-court collection calls and emails by specialist lawyers.

•    Etcetera.

All of these methods put pressure on the debtor to pay or to agree to some kind of negotiation with the creditor in order to agree on a new method of payment.


What are the benefits of extrajudicial collection in Chile?

•    The economic savings are greater than filing a lawsuit.

•    As for time, if the conditions are met, payment will be made before a trial.

•    It is less aggressive than a lawsuit, therefore it allows to take better care of business relations between people and companies.

•    It is possible to reach agreements that benefit both parties.

•    Among others.


How to collect a contract?

In the event that the contract is signed by public deed, the same rules apply as to promissory notes, invoices and cheques. Otherwise, we will have to present it for payment by means of an ordinary or summary judgment as the case may be. The ordinary trial has a very long duration and allows discussing structural issues of the contract itself. In other words, it makes it difficult to get a quick charge.


What happens if fees are collected by the courts?

Our law firm in Santiago states that, by fees is meant any type of remuneration to a job, in its broadest sense. Wolfenson’s lawyers explain that such collection is possible through summary judgment. A summary trial is a different procedure from an executive trial, but it is faster than a conventional trial. According to this, once the lawsuit is initiated and the debtor notified, a hearing is scheduled within 5 working days. At the hearing the defendant may answer the application, and the court will try to promote conciliation between the parties. If conciliation fails, a probative term will be opened for the parties to present evidence to support their claims. Once the time limit has expired, he will leave the trial in a state of delivery, which will finally decide whether the fees discussed therein should be paid. Allowing the executive trial to begin.


What is the statute of limitations?

Our lawyers in Santiago, stand out as a factor to be taken into account is always the statute of limitations of the obligations or actions emanating from them. The statute of limitations is the extinction of the right we have to collect our debts, by the simple passage of time. According to this, the time of prescription will vary depending on the type of debt and instrument in which it is consecrated.

Thus, for example, promissory notes, cheques and bills of exchange will be prescribed in a year from the date of maturity. After that, it will be mandatory to initiate a trial of knowledge.

In turn, collection actions arising from a public deed shall be barred for three years. And after that period, you will have two more years to pursue its collection but now in an ordinary trial.


What are the most recommended clauses for the creditor to ensure collection?

Our law firm highlights three important clauses to consider:

1. Acceleration clause: the creditor of an obligation in instalments may "accelerate" the debt, in the event of default of any of the instalments (late collection). The creditor shall not only have the right to request the performance of the dues due, but may demand the total of the insolvent balance.

2. Clause releasing the objection: this clause is introduced especially in promissory notes and bills of exchange. Through it we avoid the previous step of having to notify the protest of the promissory note, and thus go straight to its judicial collection.

3. Criminal interest clause: It adds interest on late payment of dues. The conventional maximum interest is normally applied to each instalment, which will put pressure on the debtor to pay the non-performing instalment.

Finally, the lawyers specializing in our law firm in Santiago emphasize the convenience of having in view the type of document to be signed, and the formality that will be required (private instrument, notarial authorization of signature, protocol, or public deed). This is to facilitate recovery and define an appropriate strategy.

Wolfenson Abogados provides legal advice and legal representation of excellence in judicial and extrajudicial collection procedures.

Links of interest on Legal Advice for Judicial and Extrajudicial Collection :

1.- Civil Code

2.- Chilean Civil Procedure Code

3.- Law No. 20,727 on Electronic Invoicing

Wolfenson Lawyers. Chile Law Firm.

If you need more information and legal advice regarding the executive trial, we invite you to contact our lawyers in Santiago. We are located at Av. El Golf 40, 12th Floor, in the commune of Las Condes, Santiago de Chile.

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