Enforcement is the procedure through which the state demands that an individual follows the measures imposed in a court decision, by means of applying coercive measures that aim to limit the debtor’s property rights.
The enforcement of a court decision in Hungary is executed by the court or by the notary public but it can also be executed by other bodies, such as the independent court bailiff or the regional court bailiff.
Debt collection in Hungary is a process that can be handled both by a court-order enforcement and through negotiation with the debtor or through arbitration. The right method can depend on the value and the nature of the debt.
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The procedure for enforcing a court decision in Hungary
The enforcement of a court decision is based on the court-issued order. In some cases, this does not take the form of an actual court order but it is an enforcement clause or an enforcement sheet. This is issued by the court or the notary public upon the request of the creditor, who is the party seeking the enforcement. One of our agents who specialize in debt collection in Hungary can give you more information about the application and how the submission can be made electronically. The elements that need to be taken into consideration include the following:
- The application: this includes information on both parties, the enforceable decision and the claim along with comprehensive information about the debt.
- The nature of the enforcement: this will usually be achieved through coercive measures aiming to restrict the debtor’s access to his financial rights.
- The types of seized assets: these can include the wages or pension of the debtor, his movable property, his claims against third persons or his business shares.
- The limitations of the enforcement: in some cases, the debtor may ask for a court suspension of enforcement, when he has legitimate circumstances.
- The validity of the measures: the general statute of limitations for the execution of the enforcement is five years.
In some cases, the bailiff may decide that the payment is to be made in installments. However, this is not possible for tax debts and other debts enforced as taxed in Hungary. The bailiff will take the necessary measures to inform him of the manner in which he can pay the amount in installments, after drawing out the installment plan. Special considerations can apply when a debtor who is a natural person can prove that his livelihood is endangered by the installment plan. Similarly, a legal person can prove that the installment plan threatens it with having to enter bankruptcy or liquidation.
The suspension of enforcement can only take place in those cases in which the debtor can justify this through the number of persons who are in his care or by proving that he suffers from a long-term and serious illness. In the case of immovable property, the suspension can be ordered only once and for a maximum period of six months. One of our debt collection lawyers in Hungary can give you more details about the limitations and restrictions on debt collection.
Debt collection in Hungary
When dealing with unpaid debts, it is common for companies and individuals to request the services offered by a debt collection agency in Hungary. In most cases, the process will begin with contacting the debtors through formal letters or attempting to reach them via telephone in order to demand the payment. In most cases, the debt collection process will include the following stages:
- Initial notice: this is the first notice sent to the debtor that his payment is overdue; it is not uncommon for payments to fall behind, however, after 60-90 days the creditors can take action.
- Legal claim: when the debtor has failed to respond, the creditor can commence the formal process.
- Judgment: this is the stage in which a court confirms that the payment is overdue and allows for the commencement of the enforcement.
- Enforcement: this is the phase in which the judgment is executed or enforced and the debtor needs to seize goods, as required.
Pursuing undue payments is a necessary step, especially for smaller businesses in Hungary that rely on payments to continue their work. Therefore, the process is one that becomes almost mandatory for businesses or individuals who need to redress financially.
The steps described here concern the pre-court processes. Creditors who need specialized legal aid can reach out to our debt collection lawyers in Hungary.
Dealing with debtors is a process that can be handled with the help provided by a team of experts who are well aware of the laws and the processes applicable in the country. Contact us for complete information about debt collection in Hungary and adequate assistance.
