Argentina collection profile



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Complexity of collecting debt:

Notable High Very High Severe

Executive summary

  • The payment behavior of domestic companies is poor and the average DSO is excessive.
  • Procedural delays are common and costs are high. Considering the inability of domestic courts to cope with the caseload in a timely manner, commencing legal action without having first conducted pre-legal action is unwise.
  • For insolvent debtors debt renegotiation mechanisms have been put in place, however in practice, liquidation remains the default procedure even though it is never in the interest of unsecured debtors.
General Information GENERAL INFORMATION arrow-transparent
Collection Practices COLLECTION PRACTICES arrow-transparent
Court Proceedings Court PROCEEDINGS arrow-transparent
Insolvency Proceedings INSOLVENCY PROCEEDINGS arrow-transparent
General Information 


Days Sales Outstanding (DSO)

Payments in Argentina take 30 days on average, however the payment behavior of domestic companies is poor and late payments ranging from 15 days to 2 months are common. The financial crisis over the last decade has furthermore weakened the banking system, which fails to support the corporate treasury and provides insufficient short term financing opportunities. A currency shortage tends to increase the problem.


Late payment interest

Argentinian regulation does not have a special set of norms to establish late payment interest which, given the general lack of specific arrangement in most contracts, would be set judicially in practice. As a result, it is highly suggested that interest in case of late payments are set contractually. The only limit is that the sum of compensatory and moratorium interest cannot exceed 2.5 times the interest charged by public banks on the discount of commercial papers.

Similarly, the law provides no regulation on collection costs as far as extrajudicial (pre-legal) collection actions; mediation or conciliation stages are concerned. Costs may nonetheless be used as a negotiation tool as long as the parties have not excluded this possibility within their contract.

collection practice 


Orchestrated negotiation first

The legal system in Argentina is slow and often unreliable; therefore it is essential to rely on amicable settlement opportunities, pre-legal collection and fast-track alternatives to ordinary legal action. On the one hand, the courts seem to have difficulties in managing their caseload and ordinary proceedings are thus time-consuming. On the other hand, mediation or conciliation action is a mandatory prerequisite to commencing any formal legal action (Law No. 26,589 and Decree 1467/2011). Mediators and conciliators may be appointed by the parties or the courts, but their role is limited to helping the parties in reaching a compromise. Thus, they have no authority to decide on behalf of the parties. If the parties reach an agreement, it is certified by the mediator (or conciliator) before being validated by the Ministry of Justice and Human Rights. The agreement then becomes binding and enforceable through enforcement proceedings if the parties disregard their obligations. If no agreement is reached, the claimant is entitled to take formal legal action. There are no penalties for failing to attend mediation; however the court would then be entitled to dismiss the claim. Before starting legal proceedings against a debtor, assessment of assets is important as it allows verification as to whether the company is still active and whether recovery chances are at good. . If insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt (see below).

Court Proceeding 


Argentina has a federal government system and its judiciary is thus distinguished between federal and provincial courts. At the Federal level, District Courts render judgments in the first instance whilst Circuit Courts together with the Supreme Court of Justice both act as Appellate Jurisdictions. There are similar tribunals at the provincial level, as well as Justices of the Peace in charge of minor issues. Litigation is governed by the National Civil and Commercial Procedural Code at both federal and provincial levels; the provincial courts also tend to apply their own provincial procedural codes and their own administrative law. Commercial disputes of all sizes may be settled by federal and provincial courts alike although jurisdiction would depend on the place where the transaction takes place: for instance, commercial disputes located in the Capital District (Buenos Aires) are systematically subject to federal jurisdiction. In addition, certain matters (trademarks, patents, maritime law) automatically fall under the jurisdiction of Federal Courts notwithstanding geographical considerations. First instance courts are usually spread over several divisions depending on their expertise area (administrative, civil, commercial, criminal, labor law). Argentinian courts are normally independent, however the local legal system tends to be extremely slow, expensive and to a certain extent unreliable. In addition, a lack of transparency and reliability may be emphasized where a political public interest is involved.

When amicable pre-legal action is insufficient, fast-track proceedings may help recovering debt efficiently without commencing complex lawsuits, provided that the debt is certain and undisputed (in particular, formal debt recognition instruments in the form of cheques, promissory notes or signed document certified by public notaries under Section 523 of the National Civil and Commercial Procedural Code would allow obtaining summary Payment Orders in which the debtor’s grounds for defence are limited). If the debtor files a counterclaim within ten days, the debt must however be proven by any means of evidence through ordinary proceedings which are generally lengthy and costly and must therefore be considered in last resort. That being said, civil proceedings commence with the filing of a claim with the clerk's general office of the competent Circuit Court, which then allocates the case to a first instance court. The creditor must provide evidence that steps were taken to resolve the dispute. The defendant is then served with a Writ of Summons (through a registered letter or a judicial officer), and is given 15 days to file a counterclaim (Sections 338 to 342 of the Code); however this time limitation is extended to 60 days where State agencies are involved. The court then organizes a preliminary hearing in which the parties are invited to reach an amicable settlement. If none is reached, a 40 days evidentiary period commences, after which judgment must be issued (again, within 40 days). The court must decide the case according to its merits and the evidence produced. Failure of the debtor to take part in the proceedings does not entitle the creditor to seek a default judgment and does not suspend the case (trials must thus be carried out in integral form in the debtor's absence) but would tend to create a negative presumption against him. It can be emphasized that claims for breach of contract are among the most common types of litigation in Argentina, but class actions in commercial matters have also increased lately.

insolvency Proceeding 


Debt recovery may alternatively occur through insolvency proceedings under Bankruptcy Law No. 24,522. Indeed, although the regulation does not specify circumstances when directors must file for bankruptcy, it provides for three judicial procedures with distinct objectives. Of these, debt restructuring is in fact increasingly used. However, in practice, a vast majority of restructuring procedures eventually finish on a bankruptcy / liquidation proceeding, because from the commercial perspective the restructuring process severely limits the possibility to obtain new contracts and credit access, which in turn ends up commonly weakening companies under debt restructuring. In practice, liquidation rarely helps to yield any returns and the chances of recovering the debt once the debtor becomes insolvent are extremely low.



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