Portfolio Location and Recovery: Challenges and Effective Actions
July 15, 2024

Author: Atty. Emily Sampedro Morales 






Last week the article by our associate lawyer Cristian Manosalvas entitled “Portfolio Location and Recovery: Challenges and Effective Actions” was published in the Digital Links Magazine belonging to the Ecuadorian-British Chamber of Industry and Commerce. This article highlights the importance of responsible management that effectively helps the profitability of public organizations. Access the full article at: http://bit.ly/2UaPKv4

Portfolio location and recovery: challenges and effective actions
Overdue portfolio collection in Ecuador. What should be done?
Collection management aims to manage the way in which money granted on credit will be recovered. Correct collection management effectively helps the profitability of organizations, and developing a strategic plan is recommended and appropriate. The segmentation of clients by sector, location, income, among others, is fundamental for 4 basic reasons:

a) Use of differentiated strategies, b) Know the portfolio better, c) Detect recurring problems; d) Facilitates the type of management.
In addition to preventive management, once the client has fallen into default, various extrajudicial actions can be carried out, such as mediation, which is an alternate conflict resolution mechanism; the use of the call center, the so-called extrajudicial notices, which is a letter that is sent to the debtor, or also carrying out notarial requirements within which the Notary notifies the required payment of the amount owed.
What legal mechanisms exist for portfolio collection?
Prior to the initiation of legal actions, an extrajudicial investigation of the debtor is required in order to be able to find local and international assets, public information on assets and liabilities, among others, which can conclude with the factual findings found, which will undoubtedly be information Valuable for executing judicial actions such as executive, ordinary, order for payment proceedings, depending on the title that supports the obligation, the amount of the debt and the time elapsed to avoid prescriptions.
It is advisable to have trained advisers with experience in all the judicial and extrajudicial processes indicated above, in order to mitigate risks and that, in the eventual case of initiating legal proceedings, obtaining all the information from the counterparty is recommended with the in order to get better results.





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