Mastering the art of debt recovery around the world, part 1: an expert guide to collections in Italy

May 9, 2023

From local factors such as high public debt, to global issues like spiking commodity prices and rising inflation, the economic environment in Italy puts pressure on companies’ credit risk management strategies. Particularly in energy-intensive industries, this means smaller margins and greater uncertainty.

As the second-largest manufacturing country in Europe[1], players in Italy must brace for increased insolvencies. And in this context, understanding the claims and collections process is one of the best ways companies can protect themselves from serious credit risk when a customer doesn’t pay on time.

Picture this: company A ships out an order of machine parts to company B. But after the delivery, they’re left waiting for a payment that never arrives. There are multiple avenues we can take to recover this debt for our clients.  

The first step is to contact company B, the buyer, to request the full payment, negotiate a payment plan or agree on a settlement. If the debtor is untraceable after 30 days, we’ll involve a local agent to initiate face-to-face contact with the debtor. This is our “ideal” scenario.

If after 60 days we haven’t been successful in our collection, we start legal action. First, we work with a credit report to gather the debtor’s financial information, then we appoint a regional lawyer who understands the specifics of the area. This is a particularity of Italy; in France, for example, you can apply directly to the court without a lawyer, making collections cheaper and faster. We proceed at this point by issuing company B with an injunction of payment – a demand for the debtor to pay – which can be either in the Italian or European court system.

Should there be no opposition, our lawyer will serve a court order to enable us to seize the debtor’s bank account or, alternatively, repossess goods. If there is an opposition from company B, an ordinary lawsuit will take place – which can be expensive and lengthy. The last resort is filing a petition for debtor bankruptcy which, if granted, enables us to lodge a claim for partial repayment.

In the event of legal action, we really want to reduce the chances of the debtor raising an opposition to have the greatest chance of recovering most if not all the debt. The best way to do that is by issuing an Italian injunction of payment. While the European order is simple and enforceable across the EU, there’s a major risk: a debtor can file an opposition without specifying a reason.

Due diligence and a strong paper trail are essential for us to use the Italian injunction, where a debtor must give a reason for opposition. These include a power of attorney and statement of account – which we recommend having notarized – copies of the expired invoice and proof of delivery duly signed by the debtor. This same paper trail enables us to start legal proceedings faster, bolsters a claim should the debtor be declared bankrupt, and ensures that clients stay on top of their outstanding invoices.

As with any other legal proceeding, time is essential for collections in Italy. Time-barring, which is the time we have to demand payment of an invoice, differs depending on the contract. For sales of goods, for example, we have ten years. This prescriptive period can be interrupted under Italian law by sending a registered letter with a request to pay. The time-barring is then “reset,” starting again from the date of the letter. In other countries, it’s not as simple to reset the time bar – in France for example, a company must enter into legal proceedings. In either country, factoring debt maturity into a risk management strategy is key.

The Italian legal system for debt collection can be daunting, especially for those unfamiliar with the specific elements of the process. Allianz Trade is the ideal partner. Our network of local agents and lawyers and advanced financial tools enable us to quickly and effectively collect debts for our policyholders. We offer low fixed costs and a uniform process across our global team, providing exceptional service while staying attentive to our clients’ needs.



Francesca Cochi

Francesca Cochi

Legal & Insolvency specialist
Allianz Trade in Italy