New Law Aims To
Eradicate Custom of
Ticos Not Paying Their
Debts
The main objective of
the new law "Ley de
Cobro Judicial" which
goes into effect next
May is to change the
habit of many Costa
Ricans of not paying
their debts.
According to one of the
promoters of the
legislation, superior
civil court judge,
Gerardo Parajeles Vindas,
the objective is to
allow an easier and
speedier judicial
process of bill
collection.
One of the beneficiaries
of the new legislation
are banks and financial
institution in that it
will allow them to
complete the process of
collecting on bad credit
card debt from one year
that it takes now to
three months once the
new law is in effect.
Parajeles denied that
the legislation is an
judicial instrument
against debtors, but
rather a modern
legislation, fundamental
to the economy of the
country that guarantees
investors the fast
recovery of debts.
The Ley de Cobro
Judicial was published
in the official
government publication,
La Gaceta, on November
20 and goes into effect
on May 20, 2008.
The current process of
recovering debt is long
and cumbersome, required
some four processes,
depending ont he debt -
ejecutivos simples,
monitorio, prendario and
hipotecario - and
divided into "mayor
cuantía" for debts of
¢600.000 colones or more
and "menor cuantía" for
debts inferior of
¢600.000 colones.
The Ley de Cobro
Judicial will eliminate
the four processes and
create one, "Juzgados
Especializados en Cobro",
and eliminate the lower
and higher amounts,
which can be accessed in
all judicial circuits,
San José, Goicoechea,
Alajuela, Heredia and
Cartago.
Parajeles explained that
the implementation of
the new law forms a
group of judges that
process the cases in a
reasonable time.
The judge added that
another objective of the
legislation is to create
an electronic process
whereby the case, once
filed, all its motions
and decisions will be
available online by way
of the internet,
including any judgments
of salary withholding
and liens on properties.
Parajeles said that 95%
of the cases involving
debt recovery involve
credit cards. In the
first half of this year
alone, 20.396 such cases
were filed.
The new legislation will
also make it easier for
recovery of property,
like a vehicle, for
example, where it can be
auctioned off and the
money used to pay down
the debt.
With the current law,
the auction process can
take 3 or 4 months and
it requires the physical
presence of a judge at
the auction. Under the
new law, a judicial
official will attend the
auction and as such
auction can be carried
out every day, instead
of having to wait for a
judge to have an opening
his or her calendar.
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