Written by: René Jakl
Photo by: Věroslav Sixt
Lodging a complaint against a debtor and getting a court’s decision within a reasonable period of time is still a minor miracle. But what if you go through the interminable proceedings, win the case, and the debtor still doesn’t want to pay up?
Attorney Denisa Přibylová recommends a procedure that comes mainly from the Code of Civil Procedure (Law No. 99/1963 Coll.): “If the debtor (the obligor in legal terms) fails to pay within the period of time stipulated by the legitimate decision, the creditor (beneficiary in legal terms) can submit a proposal against the debtor for execution of the court’s decision,” she says. The beneficiary proposes to the court the way the decision should be executed. The law stipulates the following methods for recovering the financial sum: garnishing wages; the assigning of outstanding debts; the sale of movables and real estate; the establishment of a court-ordered lien on real estate; and the sale of a company. The beneficiary can propose more than one method for the execution of the decision at the same time, but if only one is sufficient, the court orders execution by that means alone. According to Přibylová, the costs for executing the decision are borne by the debtor, in the same way as the debt – i.e., execution of the decision. The beneficiary must pay the court’s fee (2% of the recovered sum), which the debtor reimburses.
The extensive amendment to the Code of Civil Procedure, dated 2000, established a new institution called a declaration of property, which makes it possible for the beneficiary to call on the debtor to submit a declaration of his property prior to the submission of a proposal to execute the decision. If the beneficiary does this on the request of the court, then he can decide on the method of executing the decision (the court is bound by his proposal). But the hitch is that if the debtor fails to react to the court’s order, he is threatened only with a disciplinary fine, while winning time to get rid of his property. Although this is not legally effective with respect to the beneficiary, contesting such behavior in court is usually complicated, because it is necessary to prove that the person to whom the property was transferred knew of the debtor’s intention (this does not apply to close relatives). Besides court execution of the decision, the beneficiary has the right to choose the involuntary auction route, or he can proceed in accordance with Law No. 120/2001, on court executors.
Written in cooperation with the law offices of Dvořák & Přibylová.