Enforcement action: how to collect on an instrument
An enforcement action is a way to judicially collect a debt represented by an instrument with enforceable force. Understanding its requirements helps plan credit recovery.
What an enforcement action is
An enforcement action is the means by which the creditor seeks, in court, the fulfillment of an obligation already represented by an instrument with enforceable force. Unlike disputes over the existence of the debt, enforcement usually starts from a document that the law recognizes as sufficient for collection. In general, the focus is on obtaining payment of the amount due.
Instruments that usually allow enforcement
Not every document authorizes direct enforcement. The applicable legislation defines which instruments have enforceable force, and some examples usually appear frequently.
- Checks, trade notes (duplicatas), and promissory notes, subject to the requirements
- Contracts that meet the legal requirements
- Other instruments provided for in the legislation
How enforcement usually proceeds
In general, after the action is filed, the debtor is called to pay or to present a defense within the applicable limits. If there is no payment, measures may be taken to locate and attach assets, always in accordance with the law. The progress depends on each case, on the existence of assets, and on the strategy adopted.
Precautions before enforcing
Before filing for enforcement, it is usually advisable to verify the validity of the instrument, the applicable deadlines, and the real possibility of recovering the credit. In some cases, negotiation or protest may be alternatives or complementary stages. Determining the best path depends on the specific case.
Frequently asked questions
What is the difference between enforcement and a collection action?
In general, enforcement starts from an instrument with enforceable force and seeks payment directly, whereas a collection action is usually used when the debt still needs to be recognized in court. The choice depends on the document and the situation.
Is there a deadline to file for enforcement of an instrument?
Yes, there are usually deadlines set out in the legislation, which vary according to the type of instrument. Letting the deadline lapse can hinder or preclude collection by this route, so it is important to check each case in time.
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