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Your customer is due to pay you money and you can find no trace of it in your account?

1. Start with a letter to your customer.

Before taking any further steps to collect your debt you must send your debtor a letter demanding his or her voluntary performance.
The letter should outline the nature of your claim and indicate the contract or event that gave rise to the debt, the amount of money you demand and the steps you are going to take in the case of non-performance. It is, however, advisable to refrain from threatening your client with criminal or disciplinary liability. At that stage you should not be exceedingly demanding and you should give your debtor reasonable time to encourage him or her to voluntarily settle the debt – unless, of course, the period of statutory limitation is bound to lapse soon.
The letter is supposed to make your debtor aware of the fact that you do intend to proceed with your claim against him. What’s more, such a letter or any response thereto should prepare the grounds for any further steps by explicitly setting forth the details of the dispute This may help in settling the dispute out of court as well as it may serve as evidence that may be submitted in the event the court proceedings are started.
If your client is an entrepreneur, it is required by law to issue a letter with the demand for voluntary payment before filing a suit. In commercial proceedings non-compliance with this formality may constitute the grounds for consideration that the suit was filed too early, and consequently, may lead to case dismissal.
There is no prescribed form of such a letter. It may be written by your attorney but you may produce it on your own.
Cost: 5 PLN (about 1,25 €) which is a cost of a letter with the certificate of delivery.

2. When do the court proceedings becomes inevitable?

If, on the basis of the response to your letter or judging by the circumstances, you conclude that there are no chances for settling the dispute, it is the time to issue the proceedings.
Before filing the suit you should immediately gather all possible evidential materials, mainly witness statements and relevant documents, that will support your claim. This precaution is very essential as in many types of civil proceedings the law limits your capability of presenting the evidence later on – this is the case in commercial proceedings. Those provisions are quite strict because if you present the evidence after the time of limitation lapses and you are unable to prove that it was impossible for you to present the evidence earlier or it was not essential before, the court may quite legally disregard your evidence.

3. Which court to go?

The general rule is that you have to sue your debtor before the court where he or she is domiciled. However, both European and Polish law provides that you can sue the debtor in the court in the place of performance. Debts, for instance, if a contract does not provide to the contrary, are due in the place where the creditor is domiciled – therefore a pecuniary claim may be sought before a court having jurisdiction in that place.
When referring to the court having jurisdiction in specific subject matter, a distinction between certain claims should be made. In most cases the lower district court is the competent one. However, when the claim exceeds 75 0000 PLN (ab. 18130 €) and 100 000 PLN (24 173 €) in commercial cases, the jurisdiction falls into the hands of the higher district court. In both types of cases you file a typical suit and the proceedings go on in a way more or less similar to what we encounter in other countries. It must be remembered, though, that there are certain time limitations imposed on the parties as far as the submission of evidence is concerned in commercial proceedings and the proceedings when writ of payment is issued.
Additionally, in petty cases the court competent to conduct simplified proceedings is the so called “grodzki” court – a special unit within the framework of the lower district court. The cases adjudicated by this court are based on:
1. contract, warranty against product defect, warranty for quality and non-conformity of goods with a contract and when the subject matter of litigation does not exceed 10 000 PLN (about 2500 €)
2. payment of rent or other maintenance costs encumbering a tenant or rent for lease of a  flat in a cooperative housing association,
This kind of procedure is efficient and quick due to a number of obligations and restrictions imposed on the parties to it. To start with, the claim must be filed on a claim form which  can be downloaded from the Ministry of Justice’s website. Additionally, all the evidence has to be submitted in the first pleading or in an answer to it under the penalty of not taking it into consideration by the court.
Cost:
a) in typical proceedings it is 5% of the value of the subject matter (without interest)
b) in simplified proceedings it depends on the value of the subject matter. It is as follows:
• below 2000 PLN (about 470 €) - 30 PLN (7,25 €);
• between 2 000 PLN (about 470 €) and 5 000 PLN (about 1183 €) - 100 PLN (about 23 €);
• between 5 000 PLN (about 1183 €) and 7 500 PLN (about 1775 €) - 250 PLN (about 59 €);
• above 7 500 PLN (about 1775 €) – 300 PLN (about 71 €)
The losing party generally has to pay the prevailing party the costs of the proceedings, which most often include court fees as mentioned above and attorney’s fees in the amount proportionate to the claim according to the following rules:

Claim value:  Fee:
not exceeding 500 PLN (about 118 €)  60 PLN (about 14 €)
between 500 PLN (about 118 €) and 1 500 PLN (about 355 €)  180 PLN (about 28 €)
between 1 500 PLN (about 355 €) and 5 000 PLN (about 1 183 €)  600 PLN (about 142 €)
between 5 000 PLN (about 1 183 €) and 10 000 PLN (about 2 366 €)  1 200 PLN (about 284€)
between 10 000 PLN (about 2 366 €) and 50 000 PLN (about 11 832 €)  2 400 PLN (about 568€)
between 50 000 PLN (about 11 832 €) and 200 000 PLN (about 47 331 €)  3 600 PLN (about 852€)
over 200 000 PLN (about 47 331 €)  7 200 PLN (about 1704€)

The fees to be paid by the losing party are awarded by the court, usually in the judgement. They are awarded irrespectively of the fees agreed between a party and its lawyer.
Moreover, the costs of the proceedings may contain transport costs if the party or its attorney have to travel to the court, expert’s fees or earnings lost due to the appearance in the court.

4. What is a payment order?

In the case when a claim is based on a contract, the existence of a claim has been acknowledged by the debtor and the circumstances show high probability of the claim’s legitimacy, the court may issue a payment order. No court hearing is required to issue it and the court relies solely on the facts and documents provided by the claimant. The defendant learns about the fact only when he receives the payment order and a copy of the court decision. The order obliges the defendant to pay the amount of money sought by the claimant or to protest against the order. If the defendant fails to protest, the order becomes final and unappealable and it is a valid title to issue execution proceedings before the court enforcement officer. However, it the defendant protests, the order generally becomes void (with the exception of an order issued in the proceedings when the claim is based on negotiable instruments or a document containing an acknowledgement of a debt). The protest opens the proceedings before the first instance court so the parties then gain the opportunity to present their arguments before the two instances.

5. You have a judgement or a final and appealable court order and your debtor is still not willing to pay?

This is the point when you commence the enforcement proceedings. A final payment order or a judgement are enforcement titles. The moment when the judgement or order becomes final and unappealable, you need to apply to the court for the issuance of one of the above mentioned documents stamped with an execution clause.
Cost: 6 PLN (about 1,4 €) which covers the cost if issuing a copy of a judgement properly stamped by the court, you pay nothing in the case of an order.
The next step is an application directed to the court enforcement officer to commence the execution procedure. It is always good to know in advance something about your debtor, i.e. a bank account number, place of employment, real property, other claims against him, its debtors, tangible goods (cars), etc. If you know nothing about your debtor’s financial situation, you can always ask the enforcement officer to do it for you. This service is rendered on the basis of a contract and you have to pay for this.

6. Indirect ways of making your debtor pay and gaining information on your client.

One of the methods of indirectly influencing the debtor is rendering the information about him or her to a commercial information office. This kind of office collects and gives access to information concerning both consumers and entrepreneurs. Revealing information concerning a debtor in such an office has mainly sociological effects as it condemns the debtor in public opinion and deprives him or her of credit worthiness because other creditors may learn about his or hers debts.
Disclosure and obtaining the data concerning consumers is quite difficult and not everyone can do it. Still, when it comes to entrepreneurs, the conditions are less strict:
a) The obligation has to be connected to the business activities of both entrepreneurs,
b) The total sum of obligation amounts to at least 500 PLN (about 118 €)
c) The obligation has been due for at least 60 days,
d) At least a month lapsed since the creditor demanded payment by registered mail under the pain of revealing the data to the public by way of publication
The most important condition is to have a valid contract with such an office.

7. What if you know that your debtor has transferred a valuable part of his or her property to someone else?

There is a special procedure a creditor may follow when it becomes obvious that his debtor disposes of his property in order to avoid the liability. This procedure is commonly known as the Paulian claim. This claim is aimed at protecting the creditor against actions taken by the debtor in order to harm him. To issue this claim the creditor has to prove the existence of an activity on the part of the debtor which gives profits to a third party and harms the creditor. The claim can only be started with the debtor’s awareness of harming the creditor and with the third party’s knowledge of this fact. When the action is taken between relatives, it is presumed that this person knew about the debtor’s intent. When the action brings gratuitous profit to the third party, the creditor may also issue these proceedings even though the third party may not have known or couldn’t have learned about this fact, even if it acted with due diligence.
By awarding the claim the court declares the activity ineffective which means that the object of the activity is seized in order to satisfy the debtor, even though the object is owned by a third party.
Cost: 5% of the value of the subject matter.

 


Author of this article is:

Adwokat - Marcin Gorazda

EMAIL:marcin.gorazda@gsw.com.pl

SKYPE: marcin.gorazda_gsw  Mój stan



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