ENTRUST YOUR OUTSTANDING RECEIVABLES IN MEXICO TO INVENIUM
In Mexico, larger companies usually undertake to respect payment terms in order to preserve their international rating. Small and medium-sized enterprises, on the other hand, deliberately delay payments and credit collection in their regard is often more complicated.
Out-of-court credit collection in Mexico should always be considered as a serious alternative to formal proceedings which are costly and very lengthy. According to the experience of Invenium in fact, pre-legal collection methods provide greater success than traditional legal proceedings.
There is no legal framework for applying arrears interest, especially during out-of-court negotiations; however, an annual interest rate of 6% is customary.
Mexico has a legal system based on civil law traditions in which the rules are essentially encoded. The country consists of 32 states and therefore has a federal organization; the legal system is complicated by its federal structure and is renowned for its lack of transparency and independence.
Usually in Mexico a letter of formal notice to comply is sent by a notary and in theory there is a court procedure to help companies reach an agreement within 3 months. In practice this possibility is rarely invoked and formal legal proceedings remain the most widely used procedure.
The creditor files a claim at the district court. The court should follow a precise procedural process but usually the courts award remedies in the form of enforcement orders or order for payment without following any procedure.