DEBT RECOVERY
Credit protection services offered by the Dedimpresa Project
We sort out Your uncollected receivables
Credit management is a strategic task in every company because it generates cash flow, in other words liquidity, which is necessary for businesses to operate, develop and prosper.
The planning and implementation of the recovery of uncollected receivables is essential for obvious reasons that are related to the accuracy of the budget of any business, as well as for the relevant tax implications related to the assessment of credit loss.
Legal services in this area – carried out in constant synergy with the tax advisor and the credit manager of the company along with, when necessary, the assistance of reputable investigative agencies – are designed to obtain maximum benefit for the Client therefore recovering the credit in its entirety as well as all the expenses and interests in arrears.
Our work is guided by the following principles:
EFFICIENCY
Timeliness in taking recovery action and accuracy in completing it are essential factors for success, as well as the ability to determine early on the debtor’s solvency situation.
EXPERIENCE
We manage daily a large number of significant credit situations nationwide and among our valuable clients are industry groups and leading companies in numerous industries, such as furniture, construction, mechanical and fashion.
OVERVIEW
Clients may at any time access the Client Area of the DEDIMPRESA Project and consult their on-line records containing the details of all their active files and related activities.
UPDATES IN REAL TIME
The management software of the DEDIMPRESA Project automatically informs the Client of any cleared recovery activity as well as of the addition or amendment for each procedure.
TAX BENEFIT
Even if not (completely) satisfactory, the recovery action proves fruitful for the tax deductibility of the loss and for the possibility to issue a so named “Variation Note” and recover the IVA (Italian VAT) that was already paid.
COST PREDICTION
Our standardized and substantially uniform procedures allow us to offer a clear view of the cost of the services required. We also offer agreements for the provision of a continual service that can be suited to the particular needs of any business and ensure consistent cost savings.
WHAT debt recovery entails
Debt recovery is a necessity for any business – small, medium or large – for at least two sets of reasons. Firstly, for the obvious negative impacts that outstanding money has on the regular activities of the business. Secondly because clarity, honesty and truthfulness must be demonstrated for the financial situation of the beneficiary as well as for the profit and loss statement of every company. For these reasons the planning and implementation of the recovery of uncollected receivables is a necessary part of every business activity.
Even if not (completely) satisfactory, the action directed towards the recovery of debts proves to be highly beneficial in relation to the tax benefit that the company derives from the assessment of the bad debt. In particular, credit loss can be deducted for the purposes of direct taxes when it is confirmed by “certain and precise requisites”, e.g. upon the negative conclusion of a compulsory enforcement or when you start an insolvency proceeding (such as bankruptcy, administrative compulsory liquidation, etc.). It is also possible to issue a so named “Variation Note” for insolvency or enforcement proceedings which remained unfruitful, therefore recovering the IVA (Italian VAT) already paid for transactions where the invoice was issued.
This means that the procedure of the judicial recovery of debts is essential in order to:
- ensure that the company’s accounting is correct, truthful and in accordance with the law;
- deduct the loss on bad debts, obtaining fiscal savings in terms of direct taxes;
- recover the IVA (Italian VAT) paid on the transaction that was the source of the credit.
Here is an example. A public limited company that we will call Alfa is owed a credit of € 12,200.00 including IVA (Italian VAT) from someone. The judicial recovery, unfortunately, was not successful for the unrecoverable insolvency of the debtor. The conclusion of the procedure will, however, allow Alfa to get an immediate benefit amounting to EUR 4.600,00 (equal to the sum of the IVA [Italian VAT] recovered of € 2,200.00 and € 2,400.00 of saving on Corporate Tax).
This result is unlikely to be obtained in any other way other than with the implementation of a judicial debt recovery action. For example, it could prove to be very risky, the widespread practice of credit transfer without recourse. This is because the tax authorities may at any time deny the tax benefits achieved with credit transfers that do not possess valid economic reasons but where they are conducted with the sole purpose of fraudulently achieving tax savings, especially when the transfer happens for a significantly lower amount than its original value.
HOW we conduct debt recovery
The recovery action is aimed, of course, at obtaining the maximum benefit for the Client by recovering the balance in its entirety in addition to legal fees and interest on late payments. In this regard, it should be noted that for economic transactions between businesses or between businesses and public authorities, the debtor must pay the creditor a particularly high interest rate (corresponding to the rate of the main refinancing instrument of the ECB incremented by eight percentage points). Furthermore he must reimburse the costs incurred for the recovery of the amounts not paid on time, in addition to the greater damage that can be demonstrated.
The normal procedure for the recovery of a debt entails a formal written warning. When the deadline given to the debtor (generally 15 days) is not respected, a petition for a court order, based on the accounting records of the creditor, is followed. Upon the expiry of the 40 days from notification, if there is no opposition, the decree then becomes final and can be executed, constituting valid initiative to begin compulsory enforcement, which is forewarned by an act of requisition and fostered by repossession.
The variety of possible scenarios, however, does not allow the activities necessary for the recovery to be determined in advance. These activities can vary from the regular procedure, especially when the claim is disputed or the debtor is subject to insolvency proceedings. In some cases a simplification of the service may occur. For example when the creditor is in possession of outstanding promissory notes issued by the debtor, these notes can represent immediate execution, without the need to request the issuance of a court order.
In order to benefit from every opportunity deriving from debt recovery, especially for significant amounts, the implementation phase could be preceded – on agreement from the Client – by consulting public and private databases and, if necessary, by using official investigative agencies to gather useful information such as the active address of the debtor, his job details and income, his credit history with banks or other parties, details that can pinpoint his vehicles or real estates which can later be seized etc.
Each mandate is carried out in close collaboration with, if present, the credit manager in the Client’s company. He would be constantly informed during briefings dedicated to analysing the development of the complete credit situation and through the delivery of periodic updated reports.
We have a particularly useful and innovative service for Clients to obtain, in real time, updates on their credit situation. The Chiarini Law Firm has, in fact, developed a software that automatically informs our Clients of any recovery activity that has been cleared and allows him to access the restricted area where he can consult, at any time, his on-line file.
This service is accessible from the Client Area section of this website, once a user-ID and password are obtained. To view a demonstration of the program or if you would like any further information, please do not hesitate to contact us by using the addresses in the Contacts section.
The COST of debt recovery
It is indisputable that one of the biggest requirements faced by companies is to know in advance the costs that they will encounter in order to properly plan their budget. For assistance and advice in legal matters, unfortunately, it is not possible to give an exact estimate of the service price, because – most of the time – the performance of the service and the expenses incurred for the resolution of the problem, that the customer is faced with, are only practicably determinable in retrospect.
There are however, particularly in the field of the debt recovery, fundamentally standardized and uniform activities that, unless when exceptional circumstances arise, allow us to deliver a preview of the estimated cost for the services that have been requested.
We also offer the opportunity for Clients to enter into agreements for the provision of a continual service that can be suited to the particular needs of any business and ensure consistent cost savings. The fees for the professional services provided in order to recover debts are, however, deductible from the company’s income as they are part of the operating expenses.
Notice to comply
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 120,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 140,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 160,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 180,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 220,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 260,00 |
| – Over € 520.000,00 | Euro 310,00 |
Petition for a Court Order (Injunction)
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 400,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 540,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 700,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 930,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 1.450,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 2.100,00 |
| – Over € 520.000,00 | Euro 3.250,00 |
Requisition
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 120,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 190,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 250,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 400,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 500,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 700,00 |
| – Over € 520.000,00 | Euro 900,00 |
Repossession of goods
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 190,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 350,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 520,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 790,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 950,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 1.200,00 |
| – Over € 520.000,00 | Euro 1.460,00 |
Garnishment
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 250,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 315,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 525,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 790,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 900,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 1.150,00 |
| – Over € 520.000,00 | Euro 1.460,00 |
Bankruptcy petition (if necessary)
According to the amount of the debt to be recovered*:
| – Up to € 1.100,00 | Euro 250,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 450,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 750,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 950,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 1.500,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 2.100,00 |
| – Over € 520.000,00 | Euro 2.750,00 |
Application for credit recognition from bankruptcy authorities (if necessary)
According to the amount of the debt to be recovered*:
| – sino ad euro 1.100,00 | Euro 200,00 |
| – Over € 1.100,00 and up to € 5.200,00 | Euro 290,00 |
| – Over € 5.200,00 and up to € 26.000,00 | Euro 450,00 |
| – Over € 26.000,00 and up to € 52.000,00 | Euro 650,00 |
| – Over € 52.000,00 and up to € 260.000,00 | Euro 970,00 |
| – Over € 260.000,00 and up to € 520.000,00 | Euro 1.250,00 |
| – Over € 520.000,00 | Euro 1.600,00 |
All amounts, including lump-sum reimbursement for expenses (15%) and excluding CNAPF (4%) and IVA (Italian VAT) (22%), represent information on the estimated cost of the services listed. These apply to the majority of the proceedings except in special or exceptional cases.
In the case of judicial liquidation of legal fees exceeding the specified amounts, the additional sum will be made payable to the Client only if the recovery proves successful in its entirety.
Your DEFENDER in debt recovery
All our Professionals who are in charge of handling these procedures are highly specialized in the field of debt recovery. They will work to get the maximum benefit for the Client, protecting not only economic interests but also image and confidentiality.
The credit protection department of the DEDIMPRESA Project is coordinated and directed by lawyer Claudia Chiarini who has a PhD in civil law. She is also a lecturer at the specialist school for legal professionals, a speaker at conferences and training courses and an author with works in civil and commercial law for important legal journals and book series.
To view Lawyer Claudia Chiarini’s complete curriculum click here.
