An overdue invoice isn't just money that didn't come in. It's money you already spent:
you bought the inventory, paid the payroll, covered the tax. And with every month that goes by, that
debt is worth less —not because the amount changes, but because the debtor gets organized,
moves, changes phone numbers or simply gets used to not paying you.
The question that lands on our desk is almost always the same: I already wrote, I already
called, now what? This is what a business in Ecuador can do, in the
order it makes sense to do it.
1. Before making a claim, put the file in order
It sounds obvious, and it's the step most often skipped. Before taking a single step, gather:
- The document that proves the obligation: contract, purchase order, invoice,
promissory note, bill of exchange or the email exchange where the customer agreed. - Proof that you delivered: shipping guide, delivery record,
service report, the signature of receipt. - The payment history: partial payments, credit notes, withholdings.
- All prior contact: emails, messages, meeting minutes.
That file decides two things: whether your debt can be collected quickly through
the courts and whether it's worth starting. Collections are lost more often due to
incomplete documentation than to the debtor's insolvency.
2. Pre-legal collections is where the business relationship is saved
Before suing, there is ground many businesses waste: formal,
documented negotiation with visible legal backing.
It isn't “calling again.” It's changing the person on the other end and the tone. When the one
writing is no longer the salesperson who wants to keep the customer but an
external collections agent who documents every action, the debtor understands the matter
has escalated. And many times they pay right there, with no lawsuit, no court costs and without breaking the relationship.
That is the logic of pre-legal collections:
recover the money through negotiation, but with the file already built so
that, if the debtor doesn't respond, the next step is immediate.
3. When to stop pushing on your own
There are four signs that in-house collection efforts have run their course:
- The debtor stopped answering. They don't dispute the debt: they ignore it.
- They promise and don't deliver, more than once. Every broken promise teaches them
that nothing happens. - Your sales team is the one collecting. A salesperson can't
pressure a customer they want to keep selling to. It's a conflict that
is never resolved in favor of collection. - The debt is about to become time-barred. Time always runs against the
creditor.
4. The legal route: two different paths
In Ecuador, the General Organic Code of Procedure (Código Orgánico General de Procesos) provides two routes to
collect money, and choosing the wrong one costs months.
Executory proceeding
This is the route when you have an enforceable instrument: a document the law
recognizes as collectable on its own, such as a properly executed promissory note or bill of
exchange. It allows you to request precautionary measures over the debtor's assets while the
case moves forward.
Payment-order (monitorio) proceeding
This is the route when you do not have an enforceable instrument but do have documents proving the
debt: invoices, delivery receipts, emails, certifications. Article
356 of the COGEP (General Code of Procedure) allows it for debts that are determined, liquid, due and past
due, whose amount does not exceed fifty unified basic salaries.
The judge orders service of process and grants the debtor fifteen days. If the
debtor doesn't object, the ruling becomes final and enforceable. If they object, a
single hearing is called. A detail that matters when time is tight: service together with the payment order interrupts the statute of limitations (art. 358).
In practical terms: the payment-order proceeding exists precisely for the creditor who
invoiced properly but didn't get a promissory note signed. If that's your case, you're not out of
options.
5. What if the debtor “has nothing to pay with”?
It's the most common answer, and it's often false. A company can report
losses and have vehicles in a relative's name, active accounts at another
institution, current government contracts or recently transferred real estate.
Locating those assets before suing completely changes the conversation:
you stop negotiating blind and the debtor loses the advantage of knowing
something you don't. When it's done, it's done through legal channels with traceability
of every search.
6. The mistakes that cost you the debt
- Waiting too long. A three-month-old debt and an eighteen-month-old debt are not the same
debt, even if the number is identical. - Accepting token payments without paperwork. A payment without a written agreement can
give the debtor an argument and give you nothing. - Threatening actions you won't follow through on. Every empty threat
weakens the next one. - Collecting improperly. Pressuring relatives, contacting the debtor at
improper hours or exposing them to third parties isn't just counterproductive: it exposes
your company. Collection work must always be traceable and auditable. - Not closing the loop. Recovering the money without fixing the credit policy
that caused the delinquency guarantees the problem will come back with another customer.
In summary
Order matters: document, negotiate firmly, and only then go to court
—using the right route for the paperwork you have in hand. Skipping the first
step is what turns a weeks-long collection into a years-long lawsuit.
At FEXCOB we have spent more than twenty years recovering receivables in Ecuador, Colombia and
Peru, with our own team in each country and more than USD 20 million recovered for the
financial system. If you have an open case and don't know where it stands,
tell us about it and we'll tell you which route applies.
You may also be interested in: when it makes sense to send a debt to legal collections · how to collect overdue invoices without losing the customer
Legal sources cited: General Organic Code of Procedure (Código Orgánico General de Procesos, COGEP), articles 347 and 348 (enforceable instruments and admissibility of the executory proceeding), 351 (preventive measures over the debtor's assets), and 356 to 359 (payment-order proceeding). Current text, last amended October 7, 2025.
This article is for informational purposes only and does not constitute legal advice for any specific case.