Debt collection in Austria

The debt collection procedure in Austria begins with an assessment of the debtor’s solvency, his field of activity, the history of the company, the availability of documentary evidence of the debt, current court cases and enforcement procedures, as well as the possibility of challenging the debt. This assessment determines the strategy that will be used on behalf of the client during the collection process.

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in commercial activities, then it is advisable to use the stage of out-of-court debt collection.

This stage involves active negotiations with the debtor to reach an agreement to pay the creditor’s claims or other possible settlement options (for example, return of goods, transfer of debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending the notification by mail, email, telephone or instant messengers. This process involves intensive communication with the debtor in order to apply constant pressure. The main task is to establish contact with key decision makers to achieve speedy debt repayment.

The average time for informal out-of-court collection is up to 60 days (except in cases where an installment plan for debt repayment has been agreed upon). If this stage does not bring the expected results, or after an initial analysis it becomes clear that it is not applicable, you should proceed to recovery through the court.

Before initiating legal action, you should pay attention to the statute of limitations. The statute of limitations for claims for debt collection related to the supply of goods or the performance of work or other services as part of a commercial, trade or other business transaction is 3 years. The legislation does not provide for the possibility of changing the specified limitation periods by agreement of the parties. The consequences of missing the limitation period are applied by the court only if the defendant declares this. The limitation period is interrupted if the debtor directly or indirectly acknowledges the creditor’s claim before the expiration of the limitation period. After the interruption, the statute of limitations begins to count again.

Austrian law provides for judicial debt collection in the form of general proceedings and the procedure for issuing a payment order.

General legal proceedings are carried out by filing a statement of claim, after which the court decides to initiate a case, serves the claim on the defendant and prepares for the consideration of the dispute. The complaint must contain a detailed description of the evidence that the plaintiff will use to support his factual allegations at the hearing. Having accepted the claim for consideration, the court sends it to the defendant and sets a deadline for the defendant to respond to the claim, which cannot be more than 4 weeks. If the response is provided in a timely manner, the court schedules a preparatory hearing for the oral hearing. Dispute consideration takes place in accordance with the general rules of oral hearings, which includes discussion of factual and legal arguments, collection of evidence and discussion of their results. If the defendant fails to file a response in a timely manner, a default judgment must be entered at the plaintiff’s request. If a default judgment is made, the factual statements of the plaintiff regarding the subject of the dispute should be considered true, since they are not refuted by the available evidence, and on this basis the claim is subject to consideration. If a legal dispute is ready for a final decision based on the results of consideration and collection of evidence, the court makes a decision through a verdict (final decision).

The decision of the court of first instance can be appealed by the parties to the court of appeal within 4 weeks from the receipt of a written copy of the decision. In the appeal process, the parties must be represented by lawyers. If an appeal is filed in a timely manner, the entry into force and execution of the appealed decision is suspended within the scope of the appeal until the appeal is resolved. As a rule, an appeal is considered in the form of an oral hearing. After considering the appeal, the appellate court makes a decision, which becomes final from the moment it is announced.

The decision of the court of appeal can be appealed within 4 weeks from the date of announcement of the decision. An appeal from a decision of a court of appeal is permitted only if the judgment depends on the determination of a legal question of substantive or procedural law that is essential to the maintenance of legal unity, legal certainty or legal development, for example because the appeal depends on the case law of the Supreme Court , which differs or such case law is absent or inconsistent. In any case, the appeal is inadmissible if the amount of the claim decided by the court of appeal does not exceed a total of 5,000 euros. Filing an appeal suspends the entry into force and execution of the contested decision within the scope of the appeal until the appeal is resolved. As a result of considering the appeal, the Supreme Court of the Republic of Austria makes a decision that is not subject to further appeal and comes into force from the moment of its announcement.

The procedure for issuing a payment order is applicable to requests for payment of a sum of money that does not exceed 75,000 euros. The court issues a payment order without a preliminary oral hearing and without the participation of the defendant. This procedure does not apply if the defendant’s place of residence or registered office is located abroad. A copy of the payment order is sent to the defendant, who has the right to file an objection within 4 weeks of receipt. An objection filed late will be dismissed without a hearing. If the defendant does not file an objection, the payment order acquires the force of a final decision. If an objection is raised in a timely manner, the payment order becomes invalid, unless the objection is expressly directed at only part of the claim. If the objection is raised in a timely manner, the court schedules a preparatory hearing for the oral hearing. The preparatory hearing is part of the oral argument hearing. An oral objection hearing may be scheduled only if the court considers it necessary in the particular case. As a result of consideration of objections, the court either grants the defendant’s request or rejects the objections.

The procedure for issuing a European Payment Order is applicable to cases of undisputed monetary claims between parties from European Union countries (with the exception of Denmark). The claim price for this procedure must not exceed 5,000 euros. To obtain a European payment order, you must fill out a standard application form and submit it to the court. The court accepts the payment order in closed session and sends it to the debtor, after which the debtor has 30 days to file its objections with the court. If the debtor files an objection, the court summons the plaintiff to hear his position on the case and, if it considers the objection to be justified, cancels the payment order. In this case, the case must be considered in accordance with the general procedure. If the debtor does not submit any objections to the court, the payment order acquires the force of a final decision. The European Payment Order is recognized in all EU member states (with the exception of Denmark).

Once the judgment becomes final, the creditor must initiate enforcement proceedings. Enforcement is carried out either directly by civil courts, or by executive authorities, or by administrators who act on behalf and under the direction of the court. As part of the enforcement of a court decision, the creditor’s claims can be satisfied through the seizure and confiscation of funds from the debtor’s accounts, seizure of the debtor’s movable and immovable property with their subsequent sale, seizure and sale of securities, seizure and confiscation of a share of joint property, seizure and confiscation of virtual currencies , seizure and confiscation of shares in the company (except in cases where the company is characterized by the identity of the debtor or when the company is managed by the debtor alone or with a maximum of four employees).

If the debtor has signs of insolvency or excessive debt, the option of bankruptcy proceedings for the debtor should be considered. A debtor is insolvent if he has stopped making payments to creditors. A debtor is considered to be over-indebted when he has a negative net worth. A prerequisite for opening insolvency proceedings is the availability of the debtor’s assets to cover the costs of the procedure. If there are no assets sufficient to cover the costs of the insolvency proceedings, proceedings must still be commenced if the applicant makes an advance to cover the costs, as determined by the court, within a specified period of time.

Within the framework of this procedure, provided that the debtor’s assets are absent or insufficient, it is possible to challenge and invalidate the debtor’s transactions made before the opening of insolvency proceedings and affecting the debtor’s property. Among such transactions, it should be noted, for example: transactions with related parties; without payment sale of assets or provision of services completed two years before the opening of bankruptcy proceedings; repaying obligations to only one creditor, which puts other creditors at a disadvantage; transactions concluded ten years before the date of declaration of insolvency proceedings with the aim of discriminating against their creditors; transactions concluded two years before the date of declaration of insolvency proceedings with a person who knew or could know about the intention to cause damage to creditors; inaction of the debtor as a result of which he loses the right or through which financial claims are established against him. As a result of the cancellation of such transactions, it is possible to return back to the debtor what he lost from such transactions and thereby increase the bankruptcy estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

If you have any questions or need support with international debt collection in Austria, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us to receive additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY AUSTRIA

26.07.2024

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