Effective Debt Collection and Asset Enforcement Strategies in Italy

If your company is dealing with unpaid invoices in Italy, our Prague-based attorneys advise on how to proceed effectively to minimize losses and prevent the statute of limitations from expiring. This article provides specific answers regarding out-of-court debt collection, court orders, and subsequent enforcement of assets on Italian territory. We assist Czech and international clients in these matters through  ARROWS International. 

Quick summary for managers from ARROWS

• Key limitation periods: For commercial claims arising from invoices, the statute of limitations in Italy is 5 years; however, for transport contracts, it is critically short – only 1 year.
• Efficiency of the Italian order: The Decreto Ingiuntivo allows for obtaining a payment order in ex parte proceedings without the debtor's prior knowledge, making it a fast and cost-effective tool.
• Necessity of a formal demand: Before initiating legal action, it is essential to send a Lettera di messa in mora, which officially places the debtor in default and interrupts the limitation period.
• Secured through professionals: ARROWS law firm handles these cases through the ARROWS International network, ensuring direct representation in Italy and coordination with local authorities.

Strategic context of Italian commercial law and payment culture

Doing business in Italy requires a deep understanding of the local legal environment, which is strongly rooted in the civil law tradition with an emphasis on written documentation. For international companies operating there, unpaid invoices in Italy can become a serious obstacle to cash flow if the recovery process is not initiated in time. Our attorneys in Prague emphasize that the Italian market is not homogeneous, and the approach to debtors often varies by region and business sector.

In Italian business practice, we often encounter a phenomenon where debtors rely on the lengthiness of court proceedings and try to pressure creditors into unfavorable out-of-court settlements. This is precisely why it is essential to have experts on your side who are familiar with the Italian Code of Civil Procedure (Codice di Procedura Civile) and know how to utilize expedited procedures. Our Prague-based law firm routinely handles these matters and, thanks to its specialization, can effectively counter obstructions from Italian partners.

The reality is complicated by the fact that the Italian judiciary has undergone several reforms in recent years aimed at speeding up debt recovery, but their application in practice can still be inconsistent. Without deep knowledge of local customs, a creditor may miss key deadlines for asserting claims.

The importance of statutes of limitations in Italian law

The limitation period for a claim in Italy is called prescrizione, and underestimating it is one of the most common mistakes made by foreign creditors. While the general limitation period under the Italian Civil Code (Codice Civile) is set at 10 years, specific periods apply to commercial relationships which are substantially shorter. Unpaid invoices for goods and services in Italy typically expire after 5 years.

A much more dangerous situation exists for claims arising from transport contracts, where the law sets a period of only 1 year. If the creditor does not take a formal step to interrupt the limitation period within this time, the claim lapses, and the debtor can successfully raise a statute of limitations defense in court. These deadlines must be actively monitored to ensure the timely dispatch of all necessary documents.

It is important to realize that in Italy, the limitation period is not interrupted by a mere informal email or telephone reminder. To interrupt the period, an act of a formal demand for payment is required, delivered in a manner that Italian law recognizes as verifiable. In these cases, our Czech legal team utilizes the certified email system (PEC), which is the Italian equivalent of the Czech "data box" system for legal entities.

It is not just about debt recovery itself, but about comprehensive legal support including contract and policy reviews, representation in disputes with Italian suppliers, or negotiations with local regulators. Our experience shows that high-quality contractual documentation prepared with regard to both Italian and Czech law can save up to 70% of the costs of future disputes.

ARROWS law firm handles cases with an international element through the ARROWS International network, which allows us to collaborate with proven Italian attorneys in every region from Milan to Palermo. The client thus gains the advantage of a Prague-based partner coordinating the entire process, alongside a local expert who knows the nuances of a specific Italian court. This model has proven in practice to be the most effective way to recover outstanding amounts.

Extrajudicial recovery phase (Fase stragiudiziale)

Successful debt recovery in Italy should always begin with an attempt at an amicable solution, referred to as the fase stragiudiziale. This phase is not only less expensive but often faster than litigation. The key to success here is professionalism and the formal correctness of the procedure, which clearly signals to the debtor that the creditor is prepared to defend their rights even through Czech or Italian courts.

As part of the out-of-court procedure, our Czech legal team first analyzes the available documentation to verify the enforceability of the claim. It is essential to have not only the invoices themselves but also confirmed orders, delivery notes (CMR for transport), and any correspondence in which the debtor acknowledged the debt or at least did not dispute it. The ARROWS law firm in Prague collects these documents and prepares a negotiation strategy.

Lettera di messa in mora: The fundamental pillar of debt recovery

The most important document in the out-of-court phase is the formal demand for payment, known in Italian law as the Lettera di messa in mora. This document is governed by Article 1219 of the Italian Civil Code and results in the official recognition of the debtor's default with all legal consequences. Sending this demand, among other things, stays the statute of limitations and starts the accumulation of late payment interest at the statutory rate.

For the demand to be effective, it must contain a precise specification of the debt, the legal title on which the debt arose, and a clearly defined deadline for payment (standardly 15 days). Our professionals ensure that this demand is drafted in Italian and contains all legal requirements to prevent the debtor from challenging its validity. The reality is complex in that an incorrectly formulated demand may not have the effect of interrupting the limitation period, which can be fatal for the creditor.

Delivery of the demand most often takes place through the Posta Elettronica Certificata (PEC) system, which is a certified email that carries high legal weight in Italy. If the debtor does not have a PEC (which is unlikely for companies in Italy due to legal obligations), registered mail with acknowledgement of receipt (raccomandata con ricevuta di ritorno) is used. 

Strategic negotiation and installment plans

If the debtor responds to the demand, a negotiation phase follows. In the Italian business environment, it is common for a debtor to propose an installment plan or request a partial debt waiver in exchange for immediate payment. In these situations, we recommend entering into a formal settlement agreement (Transazione). This agreement should include a direct enforceability clause in case the debtor fails to comply with the installment plan.

The advantage of such an agreement is that in the event of further non-payment, the creditor no longer needs to prove the original claim but can proceed directly to enforcement based on this new agreement. It is necessary to prepare these contracts so they are airtight and protect the client from the risk of future disputes. Our experience shows that a well-negotiated out-of-court settlement is often the best possible outcome for both parties.

However, it should be noted that in practice there are exceptions and procedural details that can prolong out-of-court negotiations. Debtors may purposefully raise objections regarding the quality of goods or services to gain time. In such moments, it is safer to entrust the matter to experts who can distinguish legitimate objections from mere obstructions and respond to them adequately.

Legal tips for out-of-court debt recovery in Italy

1. What is the main difference between a Czech and an Italian pre-litigation demand? The Italian Lettera di messa in mora must be much more formal and must be delivered in a way that an Italian court will not challenge as inconclusive. It is necessary to use certified delivery channels in Italy.
2. Can a debtor avoid payment by not picking up the letter? Under Italian law, a fiction of delivery applies to registered mail and especially to PEC (certified email). If the message is sent to the debtor's official address, it is considered delivered.
3. What if the debtor denies the debt in response to the demand? If the debtor disputes the debt, the out-of-court phase usually ends, and it is necessary to prepare a strategy for litigation in court. 

Litigation: From "payment order" to enforceability

If out-of-court pressure does not yield results, it is necessary to move to judicial enforcement. In Italy, there are several procedural paths to obtain an enforcement title (titolo esecutivo). Choosing the right procedure depends on the nature of the claim, the strength of the evidence, and whether the debtor actively disputes the debt. Regarding unpaid invoices in Italy, our attorneys in Prague advise proceeding primarily through accelerated procedures that save both time and costs.

The main tool for undisputed claims is the Italian payment order, known as Decreto Ingiuntivo. This instrument is very popular in Italian procedural law for its efficiency. Alongside it, there is also the possibility of using European instruments, such as the European Payment Order (EPO), which is suitable for cross-border disputes within the European Union.

Italian Payment Order (Decreto Ingiuntivo)

Decreto Ingiuntivo is a unilateral proceeding (procedimento monitorio) in which a judge issues a payment order based on written evidence submitted by the creditor, without hearing the debtor beforehand. This is a huge strategic advantage because the debtor has no opportunity to delay the proceedings at their very inception. The court examines only the formal side of the matter and the existence of documentary evidence, such as invoices and accounting statements.

Once the court issues the order, it must be served on the debtor. The debtor then has 40 days to file an opposition (opposizione). If no opposition is filed within this period, the payment order becomes final and enforceable, allowing for the commencement of execution. If the debtor files an opposition, the proceedings turn into a standard civil dispute (giudizio a cognizione piena), which is significantly longer. The attorneys at ARROWS law firm in Prague can shorten the time to obtain an order thanks to precise preparation of the application.

Interestingly, in certain cases (for example, if the debtor has acknowledged the debt in writing), a Decreto Ingiuntivo may be issued as provisionally enforceable (provvisoriamente esecutivo). This means that the creditor can initiate enforcement proceedings immediately upon service of the order, even if the debtor files an opposition. Our Czech legal team at ARROWS always strives to achieve this provisional enforceability to maximize the speed of client satisfaction.

European Payment Order and European Preservation Order

The European Payment Order (EPO) under Regulation No. 1896/2006 is a suitable alternative for Czech creditors enforcing debts in Italy. The advantage of the EPO is its uniformity across the EU (except Denmark) and the fact that it does not require a recognition process in another member state. If an Italian court issues an EPO and the debtor does not file an opposition within 30 days, this order is enforceable throughout the Union.

Another extremely powerful tool is the European Account Preservation Order (EAPO) under Regulation No. 655/2014. This instrument allows a creditor to freeze funds in a debtor's bank accounts anywhere in the EU even before obtaining a final judgment. This is an ex parte measure, which the debtor only learns about once the account is blocked. Professionals recommend this tool in cases where there is a risk that the debtor will siphon off assets. Utilizing these European regulations requires specific know-how, as Italian courts may approach them with some restraint if the applications are not submitted in perfect form. Speed and precision are key to success.

The Enforcement Process in Italy (Esecuzione forzata)

Obtaining an enforceable decision is a major victory, but it does not yet mean money in the creditor's account. If the debtor continues to refuse to pay voluntarily, the enforcement phase (esecuzione forzata) begins. In Italy, the enforcement process is unique in that it is handled by state judicial officers (Ufficiale Giudiziario), who, however, act only upon the motion and under the supervision of the creditor's attorney.

The entire process begins with the service of the enforceable title along with a document called Atto di precetto. Without this step, the actual enforcement cannot proceed. Our Prague-based law firm coordinates the service of these documents so that the debtor has no room to further hide assets. The reality is complex because Italian enforcement is highly formalized, and any procedural error can lead to its suspension.

Atto di precetto: Final Warning to the Debtor

Atto di precetto is a formal notice to perform, signed by the creditor's attorney. It contains information that if the debtor does not pay within 10 days, asset seizure will commence. This document is valid for 90 days – if enforcement is not initiated within this period, its effects expire and it must be served again. In practice, the Atto di precetto often serves as the final impulse for payment, as debtors know that after its expiration, the bailiff has the authority to enter their premises or freeze accounts.

Furthermore, in Italy, it is possible to utilize access to the tax authority's database (Anagrafe Tributaria), which allows for the identification of bank accounts and other assets of the debtor. This step is possible only after the service of the precetto. Filing a motion for this asset search is a fundamental prerequisite for a successful pignoramento (seizure).

Types of Asset Seizure (Pignoramento)

The Italian Code of Civil Procedure distinguishes three main types of enforcement, each suitable for a different situation. Our Prague-based attorneys choose a strategy based on the results of the debtor's asset investigation to ensure debt satisfaction is as fast and certain as possible.

Specifically, Pignoramento presso terzi is the most common choice in B2B relationships. If a debtor owes you money, they likely have their own receivables from their customers in Italy. We can "redirect" these receivables directly to you.  However, it must be remembered that in practice there are exceptions and procedural details, such as limits for wage garnishment or specifics of enforcement against state institutions. Entrusting these steps to our experts is safer, as an Italian bailiff proceeds only within the scope of what the creditor's attorney precisely proposes. Without active pressure from the creditor, enforcement in Italy can reach a standstill.

 The Enforcement Process in Italy

1. Can enforcement proceedings in Italy be delayed? Unfortunately, yes; the average duration of enforcement in Italy is higher than in the Czech Republic, often taking around 180 days or more when it involves the sale of assets. However, for the freezing of bank accounts, the effect is immediate upon delivery of the order to the bank.
2. What to do if the debtor has no assets? In such a case, it is necessary to consider filing an insolvency petition or searching for the assets of the managing director if there was a breach of fiduciary duty in managing the company. ARROWS law firm in Prague performs a detailed creditworthiness check of the debtor at the very beginning of the process.
3. Who pays the costs of the Italian bailiff? The creditor must usually provide an advance for the bailiff's costs. These costs are subsequently added to the debt and recovered from the debtor, but the risk of unsuccessful recovery is borne by the creditor.

Insolvency risks and creditor protection (Liquidazione giudiziale)

When recovering unpaid invoices in Italy, creditors often face the threat of debtor insolvency. The Italian insolvency law underwent a major reform in 2022, and the term fallimento (bankruptcy) was replaced by the term liquidazione giudiziale (judicial liquidation). The aim of the reform was to speed up processes and allow for the restructuring of companies in crisis; however, for creditors, this means the need to be even more vigilant.

If a debtor enters the judicial liquidation phase, all individual enforcement actions are immediately stayed, and creditors must register their claims in the collective proceedings. ARROWS law firm in Prague ensures the filing of claims in Italian insolvency proceedings and representation within creditors' committees. Our Prague-based attorneys can identify signs of approaching insolvency and recommend protective measures in time.

Liability of statutory bodies in Italy

Italian law places great emphasis on the liability of directors (amministratori) for the timely recognition of a company's crisis. If a director knowingly deepens the insolvency or siphons assets out of the company, they may be personally liable for the damage caused to creditors. This is crucial information for creditors because, in the case of an empty company, the path to funds may lead through the personal assets of its managers.

Our Prague-based attorneys specialize in proving these failures and utilize statutory liability institutes within dispute representation. Although this procedure is more demanding in terms of evidence, in many cases, it is the only real chance to recover funds if the debtor's company has been intentionally "stripped" of assets.

As a preventive measure, we recommend using services such as contract reviews that include personal guarantee clauses for directors or bank guarantees. The attorneys at our Prague-based law firm standardly implement these elements into the contractual documentation of their clients, significantly reducing the risk of future uncollectible debts.

Who handles this at ARROWS?

JUDr. Jakub Dohnal, Ph.D., LL.M.

associate, managing partner

• dohnal@arws.cz

Mgr. Vojtěch Sucharda

associate, partner

• sucharda@arws.cz

Risk Table: Unpaid invoices in Italy and their solutions

Why choose ARROWS law firm for Italy?

Debt recovery in Italy is not a mechanical process, but a game of chess where every move matters. ARROWS law firm in Prague has a team that combines knowledge of Czech business with deep Italian legal expertise. Thanks to our ARROWS International network, we are not dependent on external providers but work as one integrated team, allowing us to maintain a high pace and quality of service.

Our clients particularly value the speed of communication and the transparency of the entire process. Thanks to modern technologies and platforms like anywhere.legal, our clients have an overview of the status of their cases anywhere in the world. ARROWS law firm was awarded the most innovative law firm on the Czech market in 2024, confirming our commitment to modernizing traditional legal practice for today's business needs.

The security of your finances is our priority. In addition to insurance up to CZK 400,000,000, we offer transparent escrow systems and detailed reporting. Whether you need representation during audits, a review of international contracts, or the resolution of licensing proceedings, ARROWS law firm in Prague is your strong partner in Italy and across Europe.

The Italian market offers immense opportunities, but it does not forgive errors in legal procedure. Regarding unpaid invoices in Italy, our attorneys in Prague advise proceeding through a combination of rigorous out-of-court preparation and the assertive use of judicial instruments. Remember that time is working against you – statutes of limitations in Italy are relentless, and debtors will exploit every day of your hesitation to secure their own interests at your expense.

ARROWS law firm is ready to take over your concerns regarding Italian receivables. Our experience with Italian procedural law and our international background allow us to achieve results where others hit barriers of language and unfamiliar environments. Entrust your cases to experts who understand how the Italian system works in practice, and do not let your money sit unnecessarily in the hands of unreliable partners.

Frequently Asked Legal Questions regarding Unpaid Invoices in Italy: Our Czech legal team advises on how to proceed

1. What is the probability of recovering a debt in Italy? The probability of success depends on the age of the debt and the debtor's creditworthiness. If recovery is initiated within 6 months of the due date and the debtor is a functioning company, the success rate of out-of-court and accelerated judicial recovery at ARROWS law firm exceeds 70%.
2. Do I need to have invoices signed by the debtor? A signature on the invoice is not a requirement in Italy, but it is necessary to provide evidence of the order and confirmation of delivery of goods or provision of services. To issue a Decreto Ingiuntivo, an extract from the creditor's properly maintained accounting records, verified in Italy by a notary or certified accountant, is sufficient.
3. Can a contractual penalty from a Czech contract be applied in Italy? Yes, if the contract is validly concluded and contains a choice of law or if it is governed by international conventions. However, Italian courts have the authority to moderate (reduce) excessively high penalties if they appear disproportionate.
4. What is PEC and why is it important for me? PEC (Posta Elettronica Certificata) is a certified electronic mail system. Every Italian company must have one. Communication via PEC carries the same weight in court as a registered letter, which makes the delivery of demands and court documents faster and cheaper.
5. Can I recover a debt in Italy even if my contract specifies a Czech court? Yes, thanks to the Brussels I bis Regulation, a Czech judgment can be enforced directly in Italy. Nevertheless, in many cases, it is strategically more advantageous to sue directly in Italy to avoid the intermediate step of "domesticating" the judgment. 
6. How much will I pay in court fees? The court fee (contributo unificato) is calculated based on the value of the dispute. For a claim up to EUR 5,000, the fee is in the range of tens to hundreds of EUR; for million-euro amounts, it involves thousands of EUR. When using accelerated proceedings for a payment order, only 50% of the standard rate is paid.

Disclaimer: The information contained in this article is of a general informative nature only and serves as a basic guide to the issue. Although we ensure maximum accuracy of the content, legal regulations and their interpretation evolve over time. To verify the current wording of regulations and their application to your specific situation, it is therefore essential to contact ARROWS law firm directly (office@arws.cz). We bear no responsibility for any damages or complications arising from the independent use of information from this article without our prior individual legal consultation and professional assessment. Every case requires a tailor-made solution, so please do not hesitate to contact us.

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