Debt collection in Poland

The debt collection procedure in Poland begins with an assessment of the debtor’s solvency, which includes an analysis of its financial indicators, the organizational and legal form of doing business, the reputation and specifics of its activities, the presence of employees and debts to the tax authorities. It is also important to assess the availability of documentary evidence of debt, ongoing litigation and already initiated enforcement actions by other creditors. In addition, challenging the existence of the debt is being considered. This assessment will serve as the basis for developing an individual strategy that will be applied on behalf of the client in order to repay the debt.

In the absence of active legal proceedings against the debtor or unenforced court decisions to collect the debt, and provided that the debtor continues to conduct business, amicable collection becomes the preferred route. This stage is based on persistent negotiations with the debtor in order to reach a mutually beneficial agreement regarding debt settlement. Settlement options may include payment of a creditor’s claim, return of goods, transfer of debt to a third party, or exchange of services or goods.

Interaction with the debtor begins with sending a demand through various channels, such as mail, email, telephone or instant messengers. This process involves actively interacting with the debtor in order to put pressure on him. The main task is to establish a dialogue with key decision makers in order to speed up the debt collection process.

An additional leverage of influence on the debtor at this stage is the possibility of including the debtor in the “Krajowy Rejestr Długów” (National Register of Debts – Black List), which will make it difficult for him to find new business partners and maintain relations with current ones.

The average term for out-of-court collection is usually from 30 to 60 days. If a long payment schedule or installation plan is agreed upon, the specified period will be longer. If this stage does not bring the expected results or after an initial assessment it becomes clear that it is not applicable, then it is necessary to proceed to debt collection through the court.

The general limitation period is six years, and for claims related to business activities three years. At the same time, the legislation prohibits the reduction or extension of these deadlines. Regarding international debt collection, Poland is a party to the 1974 UN Convention on the Limitation Period in the International Sale of Goods, and therefore if the foreign creditor is registered in a country that is also a party to this convention, the limitation period will then be 4 years old. After the expiration of the designated periods, the debtor has the right not to fulfill the requirements presented to him and, as a result, the process of judicial collection becomes more complex, since it will be necessary to prove in court the existence of circumstances of interruption of the limitation period.

Conducting a mediation procedure or other out-of-court method of resolving a dispute is not mandatory before going to court, but in the absence of such measures, the reasons why they were not taken should be explained in the statement of claim.

Depending on the circumstances of the case and the cost of the claim, the following types of judicial debt collection in Poland are provided:

1. The procedure for issuing a payment order (“Nakaz zapłaty”) is applicable to undisputed claims of the creditor. After filing the application, the court considers it in a closed session without calling the parties and accepts a payment order in which it orders the defendant to satisfy the claim in full within two weeks from the date of its delivery. A payment order becomes an executory document as soon as it becomes final, provided that the defendant does not file an appeal against the payment order within two weeks from the date of service. If the debtor raises an objection within the specified period, then the payment order is considered invalid and the case will be considered in civil proceedings. At the same time, the payment order is invalid only in the part that is disputed by the objection.

2. Civil proceedings (“Postępowanie zwykłe”) are applicable for cases in which the debtor disputes the payment order or when it is initially obvious that the creditor’s claim is controversial. Civil proceedings are carried out through a trial where the parties are summoned to inform their positions on the case. The total period for consideration of the case at this stage is from 6 months and depends on the amount of evidence that needs to be collected and examined. As a result of the consideration of the case, the court makes a decision on the case (“Wyrok”), which comes into force within fourteen days from the moment it is served on the party in the case, provided that it is not appealed.

If one of the parties to the dispute who is not satisfied with the decision of the court of first instance has the right to appeal it on appeal within 14 days from the date of receipt of the decision. The decision of the appellate court may be appealed to the cassation court within two months from the date of receipt of the appealed decision. In this case, at the request of one of the parties, the appellate court has the right to suspend the effect of its decision or the decision of the first instance until the completion of the proceedings in the cassation court. The law does not allow cassation appeals against court decisions in cases with a claim price of less than 50,000.00 zlotys (about 10,750.00 euros).

3. The procedure for issuing a European payment order (“Europejski nakaz zapłaty”) is applicable to cases of undisputed monetary claims between parties from European Union countries (with the exception of Denmark). 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 inform his position on the case and, if it considers the debtor’s objection to be justified, cancels the payment order. In this case, the case is subject to consideration in civil proceedings. 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 (except Denmark).

After receiving a final court decision, if the debtor refuses to voluntarily comply with court decisions, a forced execution procedure should be opened. Issues of enforcement proceedings are the responsibility of district courts and bailiffs operating in these courts. When filing an application for enforcement, the creditor may indicate the method of enforcement he has chosen, but the bailiff will apply the method of enforcement that is least burdensome for the debtor. The average period of compulsory execution is about fifteen months.

If enforcement turns out to be ineffective, the option of bringing the debtor’s management to additional liability for the company’s debts should be considered. Depending on the organizational and legal form of the company (limited liability company or joint stock company), the Code of Commercial Companies of the Republic of Poland provides as subsidiary liability and general responsibility for members of the board or directors of the debtor company. But in order to apply such options, there must be certain grounds provided for by the specified code, for example, the head of the debtor company did not file an application for recognition of bankruptcy within the prescribed period or a decision was made to open a restructuring procedure or to approve the agreement in proceedings to approve the agreement.

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

# DEBT COLLECTION AGENCY POLAND

12.04.2024

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