Debt Collection in Peru

 

If you plan to do business in Peru, here you will find useful information to decide the safest way forward.



If your client says that issuing a letter of credit is expensive, believe them. This is true. There are alternatives, although they require awareness of their consequences. A common and less costly option is to issue a promissory note signed in Peru. The most suitable instruments are the Bill of Exchange and the Promissory Note.

Key Considerations

  1. Local jurisdiction. Some companies request contracts with foreign courts. However, this solution does not work. You will not be able to enforce the promissory note in Peru and will need to seize assets located in the country.

  2. Promissory notes. In Peru, they only have legal force if they comply with national law. Therefore, it is not advisable to issue them under foreign rules. In addition, drafting them in Spanish helps avoid misunderstandings.

  3. Guarantor. It is recommended to require a guarantor who also signs the note. If the guarantor or client is not a company, the spouse must also sign. The law requires this when joint property is subject to seizure.

  4. Procedure. Some expired notes must be presented before a notary. Others do not, according to the new law. Therefore, issue it without that requirement. Otherwise, you could lose important legal effects.

  5. Debtor’s domicile. When suing, first check where the debtor lives. Only the judge of that jurisdiction can process the case. Lima offers better conditions for debt recovery. However, outside Lima it can be more difficult. To avoid problems, agree that Lima courts resolve disputes.

  6. Attorney fees. Law firms usually charge a percentage of the recovered debt. If a lawsuit is filed, the same rate applies. In special cases, a fixed fee may be agreed.

  7. Duration of the process. A lawsuit often lasts longer than the law provides. On average, it can extend for 12 months. It depends on the clarity of the case, the debtor’s arguments, and the judge’s workload. Sometimes, an out‑of‑court settlement is a better option.

  8. Court costs. Every process involves fees. In general, they are not high. However, seizing assets requires additional payments. For example, a seizure of assets worth USD 280,000 or more requires a fee of about USD 1,000.

 
Scroll to Top