The payment order is final and the debtor is not paying: how it turns into enforcement

The court issued a payment order, the debtor filed no objection and the period expired. The company holds a decision equivalent to a lost case, yet nothing has arrived in its account. A payment order obliges the debtor to pay, but it will not take the debtor’s assets away. That is what enforcement is for, and it has its own rules, time limits and costs. Anyone who knows them in advance will not lose the first weeks to formal errors and can estimate what enforcement will realistically produce.

When a payment order is an enforcement title

The Code of Civil Dispute Procedure identifies the moment of finality precisely:

A payment order becomes final (a) on the fruitless expiry of the period for filing an objection, (b) on the day on which the order rejecting an objection under Section 267(2)(c) becomes final.

— Section 268 of Act No. 160/2015 Coll. (unofficial English translation)

An enforcement title is an enforceable court decision imposing an obligation (Section 45(1) of the Enforcement Code). It is endorsed with a certificate of enforceability by the court that decided at first instance (Section 46(1)(a)). A payment order from electronic payment order proceedings against which no objection was filed has the effects of a final judgment (Section 11(6) of Act No. 307/2016 Coll.) and need not even be attached to the application for enforcement (Section 48(4)(a) of the Enforcement Code). If the debtor did file an objection but the court rejected it for want of substantive reasons, what matters is the finality of the order of rejection; we discuss what an objection that stands up looks like in the question what an objection to a payment order must contain.

The application for enforcement

The application is filed electronically to the court’s electronic mailbox on the prescribed form and must be authorised, otherwise it is disregarded (Section 48(7)). An entitled person without an activated mailbox may file it through any enforcement officer (Section 48(8)). The calculation calls for attention. A monetary claim must be broken down in the application into principal, recurring accessories, capitalised accessories, contractual penalty and the entitled person’s costs of enforcement, and the application must state whether and to what extent the debtor has performed the obligation as at the date of filing (Section 48(3)(g) and (k)). Partial payments made after the order was issued must therefore be deducted before filing.

The court fee for the application must be paid in full within 15 days of filing; the court does not invite payment and, once the period has expired fruitlessly, the application is disregarded (Section 11d(2) and (3) of Act No. 71/1992 Coll.).

The court authorises an enforcement officer

If there are no grounds for dismissal, the court issues an authorisation to conduct enforcement within 15 days of service of the application (Section 53(1)). The entitled person does not choose the enforcement officer: the court designates one by random selection from among the officers for the regional court district based on the obliged person’s registered office or permanent residence (Section 55(1) and (2)). Enforcement commences on service of the authorisation on the enforcement officer (Section 57(1)). Beware of old titles: where the application is filed more than three years after enforceability and recurring accessories are also claimed, the court will dismiss it as to the accessories that arose after enforceability if the debtor was not called upon to perform in the preceding three months and there is no agreement on instalments (Section 53(3)(g) and (4)). We explain the further consequences of a demand in the article the pre-action demand in Slovak law.

Notification and the debtor’s defence

The enforcement officer notifies both the entitled and the obliged person of the commencement of enforcement and calls on the obliged person to satisfy the claim (Section 61(1)). The notification states the amount of the costs on payment within fifteen days and a higher amount should the obliged person not pay within that time (Section 61a(1)(e) and (f)). Within 15 days of service of the notification, the obliged person may apply to have the enforcement discontinued, which has suspensive effect, but only on the grounds the Act lists, for instance circumstances that caused the claim to lapse after the title arose (Section 61k(1) and (2)). Objections to the claim itself, which should have been raised in the objection to the payment order, will generally not succeed in enforcement. A legal person may apply for instalments under the statutory conditions (Section 61g(3)).

The enforcement officer determines the method of enforcement so that it is proportionate to the obligation being enforced (Section 64). For a monetary claim, the options are deductions from wages, attachment of a receivable, and sale of movables, securities, immovable property or a business (Section 63(1)). For a sale of movables, immovable property or a business, the officer may require an advance from the entitled person towards necessary expenses; if the entitled person does not provide it, the enforcement is discontinued (Section 58).

The order in which sums recovered are distributed

From each payment, the enforcement officer’s costs are satisfied first, then the principal, then the accessories awarded by the title and finally the entitled person’s costs (Section 60(1)). No more than 24 per cent of the payment received goes to the officer’s costs and the remainder to the principal; interest and the entitled person’s costs come only after the principal has been extinguished (Section 60(2)). With regular deductions, default interest and the entitled person’s costs therefore only begin to be satisfied once the principal has been repaid.

When the debtor has no assets

Enforcement cannot go on for ever. Where a company is concerned, the Act ends it as follows:

The enforcement officer shall issue a notification of discontinuance of enforcement if […] in enforcement conducted against the assets of a legal person, within 30 months of the commencement of enforcement or of the last levy of execution on assets, it has not been possible to identify assets or income that could be subject to enforcement and that would suffice at least to cover the enforcement officer’s costs […]

— Section 61n(1)(c) of Act No. 233/1995 Coll. (unofficial English translation)

For a natural person that period is five years (Section 61n(1)(d)). In the notification of discontinuance, the officer calls on the entitled person to pay the reimbursement of expenses (Section 61n(3)). A commercial company whose enforcement was discontinued for want of assets is dissolved without liquidation six months after the notification is published in the Commercial Bulletin, unless it is in bankruptcy (Section 61n(6)). Before that it is worth checking whether the managing director is answerable for the company’s debts, as we describe in the question can we sue the managing director directly.

What to have ready

The order with the certificate of enforceability, a summary of all payments made after it was issued and everything you know about the debtor’s assets: bank, employer, immovable property, vehicles, shareholdings. We calculate and file the application, deal with the enforcement officer and report progress to you as it happens through our enforcement recovery of a claim service. If you do not yet have a title, the route to one runs through a payment order and payment claim.