From the Commercial Law Department of Belzuz Abogados, S.L.P. in Madrid, as experts in debt recovery and out-of-court procedures, we have observed a growing interest among businesses in streamlined alternatives to the traditional judicial payment order process. In a context where commercial late payments jeopardise companies’ liquidity, having rapid claim mechanisms at one’s disposal is strategic.
In this article, we will analyse how the reform introduced by Organic Law 1/2025 has hindered the processing of judicial payment orders and assess the procedure for uncontested non-monetary debts before a notary, commonly known as the ‘notarial payment order’, as an alternative channel.
Regulation of the judicial payment order
Judicial payment orders are regulated in Articles 812 et seq. of Law 1/2000 on Civil Procedure. Their theoretical objective, according to the Explanatory Memorandum of Law 1/2000, is the ‘rapid and effective protection of the liquid monetary claims of many litigants and, in particular, of professionals and small and medium-sized enterprises’.
The procedure is straightforward. It allows for the recovery of liquid, specific, due and payable monetary debts substantiated by documents such as invoices, delivery notes or other documents customary in civil and commercial transactions, accompanied by an application that does not require the formal rigour of an ordinary court claim. Once the application has been accepted, the court will require the debtor to pay the creditor within twenty working days, or to state, with reasons, the grounds for opposing payment. If the debtor states their opposition within the time limit, the payment order is filed and converted into an oral hearing if the debt does not exceed €15,000, with the matter being referred to the claimant creditor so that they may, if appropriate, challenge the debtor’s opposition; if the debt exceeds €15,000, the claimant creditor will be required to file a court claim within one month, at which point ordinary proceedings will commence with the subsequent steps: defence to the claim, preliminary hearing and trial, where applicable.
The main feature of the payment order procedure, however, lies in the fact that, if the debtor fails to appear or pay within the specified time limit, the Court Clerk will issue a decree terminating the payment order procedure, this decree constituting an enforceable title to enforce the claimed debt.
The payment order procedure following Organic Law 1/2025
However, in practice, it is common for this procedure to be prolonged as a result of the usual delays in many courts or due to the slowness or ineffectiveness of many summonses and notifications to the debtor in question.
In addition to the delays inherent in the processing of any judicial proceedings, there is also the processing of the mandatory prior MASC (Special Administrative Service for Civil and Commercial Proceedings) required for the bringing of virtually all civil and commercial actions under the terms of Organic Law 1/2025. Since payment orders are not expressly excluded from the scope of this procedural requirement, the courts are now requiring proof of a prior MASC before a payment order application can be filed.
Consequently, judicial payment orders have lost two of their major advantages: speed and lower cost. Seeking prior MASC assistance entails, on the one hand, postponing the filing of the payment order application until the negotiation attempt has concluded or the relevant period for satisfying the procedural requirement has elapsed; on the other hand, it entails incurring legal costs such as sending a burofax or even solicitor’s fees from an early stage should one opt for a confidential binding offer (Article 6.2 of Organic Law 1/2025 requires mandatory legal representation for the formulation of a confidential binding offer in cases where the amount exceeds €2,000) or fees for neutral third parties whom one decides to engage to prove that a MASC has been used.
Ultimately, the judicial payment order has lost its essence following the reform introduced by Organic Law 1/2025. Whilst it was previously understood that the order for payment allowed disputes to be resolved swiftly or served as a demand for payment prior to court proceedings in the event of the debtor’s opposition, it is now required to provide evidence of negotiation or a MASC before using the order for payment to issue a demand for payment, which, where applicable, will precede subsequent court proceedings. Judicial payment orders are therefore redundant and unnecessary in most cases, as they may even lead to a three-stage process: MASC, judicial payment order and, finally, ordinary proceedings in the event of opposition.
A possible solution: the notarial payment order. Requirements for the notarial payment order
Given that judicial payment orders have become distorted and have lost much of their advantages and effectiveness, we must consider notarial payment orders as an alternative.
The final provision of Law 15/2015 of 2 July on Voluntary Jurisdiction introduced Chapter IV into the Notarial Law of 28 May 1862 (On proceedings concerning obligations’), Section 2 of which regulates a procedure for the ‘claiming of uncontested notarial debts’, commonly referred to as notarial debt collection.
This procedure is governed by the current Articles 70 and 71 of the Notarial Act. The procedure bears many similarities to judicial payment orders, as it allows for the recovery of monetary debts of a civil or commercial nature that are liquid, certain, due and payable. Furthermore, a notary must be appointed who is resident at the debtor’s domicile or where the debtor can be found, in the same way that the competent court for judicial payment orders is that of the debtor’s domicile.
Certain debts are excluded from this type of proceeding:
- Debts arising from a contract between a trader or professional and a consumer or user, including expenses.
- Common expenses, whether ordinary or extraordinary, general or individualised, of co-owners claiming against owners’ associations established under the horizontal property regime.
- Maintenance debts involving minors, nor those relating to inalienable assets or transactions subject to judicial authorisation.
- Debts involving a public administration.
The proceedings are initiated by requesting the Notary to authorise a notarial record, which shall set out details similar to those in a claim for a court order for payment regarding the identity of the parties and the amount and nature of the debt, and to which the document or documents constituting the basis of the claim shall also be attached. The deed must necessarily specify which part of the debt corresponds to the principal and which to the interest and late payment charges applied.
Once the creditor’s application has been accepted, the Notary will require the debtor to pay the claimant within twenty working days, as in the case of a judicial payment order. The options available to the debtor are identical:
- They may pay within the specified period, in which case the notarial record serves as a payment receipt.
- They may lodge a reasoned objection to the demand for payment, which will bring the notarial proceedings to an end and open the way for legal action to recover the debt.
- Should the debtor fail to appear or fail to state grounds for opposition within the time limit, the Notary will record this in the file and the notarial deed will constitute an enforceable title, the enforcement of which will be processed in accordance with the provisions governing extrajudicial enforceable titles.
If your company requires specialist advice on out-of-court debt recovery procedures, notarial payment orders or commercial debt recovery strategies, our team in the Commercial Law Department at Belzuz Abogados, S.L.P. has the expertise to assist you in any of these situations.
Advantages of a notarial payment order over a judicial one
As can be seen, the procedure for a notarial payment order is similar to that of a judicial one and allows for the rapid obtaining of a notarial enforceable title for the recovery of the debt and the attachment of the debtor’s assets should the debtor fail to appear or object. In the current context, the notarial payment order also offers certain advantages over the judicial payment order, which allow the recovery procedure to be significantly expedited:
- There is no need to go through a MASC before initiating the notarial payment order, which allows the start of the collection procedure to be brought forward by several weeks or even months.
- The notarial file will not be subject to the delays typical of many judicial bodies, where months may pass before the payment order application is processed.
- Nor is the creditor exposed to delays that may arise from service of process by the Common Service for Notifications.
Furthermore, although the execution of the notarial deed entails a fee, its amount is similar to the court fee that legal entities must pay if they opt for judicial debt collection proceedings, so it does not represent a substantial increase in costs.
Given that the time limit granted to the debtor to appear is the same as in judicial payment proceedings and that the consequences of the debtor’s actions are also the same, the more streamlined procedure should, in most cases, tip the balance in favour of notarial payment proceedings over judicial ones.
In any event, given that the notarial file will be incorporated into a potential legal claim in the event of opposition by the debtor, it is necessary to have an effective legal strategy in place to prepare both the notarial payment order and the potential enforcement of the deed or the continuation of the claim through the courts in the event of opposition by the debtor. Furthermore, should the debt be disputable, it is advisable to analyse, from a strategic perspective, the merits of filing an ordinary court claim directly
At Belzuz Abogados, S.L.P., with over 65 years’ experience and a presence in Spain and Portugal, our Commercial Law Department specialises in debt recovery, payment order proceedings and corporate debt collection strategies. For specialist enquiries, please contact us via the channels listed on our website.