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.
