Debt collection

Difficulties in recovering money owed is one of the most serious problems of modern entrepreneurs. If the amount owed is significant, problems with its payment by the debtor may translate into loss of financial liquidity and even lead to the liquidation of the enterprise. Therefore, in certain situations, there should be no delay in debt recovery and entrust the recovery of the debt to specialists.

Every debt collection process begins with a pre-court request for payment of the debt. If the debtor still refuses to fulfil the monetary claim or simply continues to fail to do so, the legitimacy of taking the matter to court is assessed. A final order for payment or a judgment adjudicating the claim, obtained as a result of court proceedings and accompanied by an enforcement clause, constitute an enforceable title entitling to initiate enforcement proceedings conducted by a bailiff.

Debt collection is therefore a complex processwhich seeks to recover money owed by a debtor, which the debtor is in no hurry to pay, despite the obligation to do so. The reasons for this may vary: from the debtor's financial problems to his business strategy. Regardless of the reason for the delay in payment, however, it is worth taking the appropriate steps as soon as possible, which will lead to the enforced recovery of the debt.

All the more so as every claim is subject to a statute of limitations over time. For example, business-related claims are time-barred after three years.

The effect of the expiry of the limitation period is the risk that the litigation opponent may raise a plea of limitation, which the court must take into account. This results in the dismissal of the action and thus in the impossibility of further enforcement of the claim by way of bailiff enforcement.

Thanks to many years of experience lawyers, chancelleries can offer a wide range of debtor recovery services.

At each stage of the debt recovery process, they are mindful of minimising the costs incurred by their clients in enforcing the debt and are vigilant about the advisability and legitimacy of the actions taken by the bailiff. Each time we take certain recovery activities are consulted with clients.

As part of the activities aimed at the recovery of claims law firm offers:

Recovery services are provided either on an ad hoc basis - on the basis of one-off support for a specific debt case - or on the basis of a permanent cooperation agreement - both in terms of debt collection only and also covering ongoing legal services.

Debt collection can take different forms depending on what stage the case is at and how the debtor reacts. Amicable action is usually taken first, with the aim of obtaining payment without going to court. If this is unsuccessful, the creditor may decide to file a lawsuit and start court collection. The final stage is bailiff collection, which involves the forced enforcement of the debt from the debtor's assets.

The recovery time depends on the complexity of the case and on the cooperation or resistance of the debtor. At the amicable stage, recovery of the debt can take from a few days to a few weeks. Court proceedings usually last from a few months to more than a year, depending on the court's workload and possible appeals. Bailiff enforcement, on the other hand, can end very quickly if the debtor has funds in a bank account, or drag on for years if assets are difficult to locate.

Creditor in the debt collection process:

- has the right to charge statutory interest for late payment,
- may claim court and bailiff costs,
- has the option to apply for security over the debtor's assets.

At the same time, he or she should bear in mind the obligation to document the debt reliably, respect data protection regulations and observe ethical principles in dealing with the debtor.

The costs of debt recovery are not uniform and depend on the mode of recovery adopted. In amicable actions, they are usually limited to the fee of the law firm or the commission of the debt collection company. If the case is taken to court, one has to reckon with the necessity to pay a court fee (usually 5% of the value of the object of litigation), as well as the costs of legal representation. At the enforcement stage, there are additionally bailiff fees, which in many cases can be passed on to the debtor.

In order for debt recovery to be effective, it is necessary to collect the appropriate documentation:

- invoices, receipts or other proof of debt,
- contracts and orders that form the basis of the cooperation,
- correspondence with the debtor, e.g. requests for payment,
- proof of payment or proof of the absence thereof.

Debt collection is based on the provisions of civil law and civil procedure. The most important regulations are to be found in the Civil Code (e.g. provisions on the statute of limitations for claims), the Civil Procedure Code (rules for pursuing claims in court) and the Law on Court Bailiffs and Enforcement, which regulates the operation of enforcement bodies.

Effective debt collection also involves preventive measures. Among the most important of these are:

- verification of counterparties before signing a contract,
- the use of advances or staged payments,
- clearly defined payment deadlines and contractual penalties,
- ongoing monitoring of payments and rapid response to delays,
- receivables insurance for larger contracts.

Debt collection is a complex process that requires both legal knowledge and experience in dealing with debtors. Each stage - from amicable action, through court proceedings to bailiff enforcement - has its own rules, costs and possible risks. The effectiveness of debt collection depends to a large extent on the proper preparation of documents, knowledge of procedures and a quick reaction to any late payment that occurs.

If you want to entrust the recovery of your debts to professionals and avoid unnecessary costs or stress, contact our law firm. We will provide you with a comprehensive legal service, from the first request for payment to the effective enforcement of the debt. 

Contact us today to recover your money efficiently and safely.