Debt collection in Slovenia

The debt collection procedure in Slovenia begins with an analysis of the debtor’s financial performance, its 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 analysis forms the strategy that will be used to repay the debt.

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in his activities, then it is advisable to proceed to the stage of informal amicable 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 unofficial 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 Code of Obligations establishes a general limitation period of 5 years. Claims under commercial contracts, as well as claims for expenses incurred in connection with those contracts, expire after three years. The legislation does not provide for the possibility for the parties to change the specified period. The running of the statute of limitations may be interrupted if the debtor acknowledges the debt in writing, as well as by taking indirect actions, including partial repayment of the debt, payment of interest or provision of security.

In addition, the Republic of Slovenia is a party to the 1974 UN Convention on the Limitation Period for the International Sale of Goods, and therefore if a foreign creditor is registered in a country that is also a party to this convention, the limitation period in this case will be 4 years.

Depending on the cost of the claim and evidence of debt, the legislation provides for the following options for judicial debt collection: 

1. General claim proceedings are carried out by filing a claim in court, after which the court prepares for the main hearing, which includes consideration of the claim, serving the claim on the defendant for response, scheduling a preliminary hearing and scheduling the main hearing. The court is obliged to send the claim to the defendant within 30 days from the date of its receipt. After receiving the claim, the defendant has 30 days to file a response to the claim. If the debtor exercised his right of response and submitted it to the court, such response must be served on the plaintiff within 30 days from the date of receipt by the court. Also, after receiving the response, the court sets a date for the preparatory hearing, which is determined so that the parties have sufficient time to prepare, but not less than 30 days from the date of receipt of the relevant summons. During the preparatory hearing, the court openly discusses the legal and factual aspects of the dispute with the parties so that the parties supplement their claims and legal conclusions, present additional evidence, make statements and strive to reach a judicial settlement. If the preliminary hearing does not end with the conclusion of a settlement agreement, the court may immediately begin the main court hearing. The main hearing must be scheduled to allow the parties sufficient time to prepare, but not less than fifteen days from receipt of the summons. As a result of consideration of the case in the main hearing, the court, within 30 days, makes a decision on the case (“Sodbo”), which becomes final after the expiration of the period for appealing it. 

Each of the parties to the case that is not satisfied with the decision of the court of first instance, if it wishes to appeal it, must, within 8 days from the date of receipt of the court decision, declare its intention to appeal. If a party declares such an intention within the specified period, then it has the right to file an appeal within 30 days from the date of receipt of the protocol of the decision (for bill and check disputes – 15 days). A timely appeal prevents the decision of the first instance from becoming final to the extent that it is challenged. As a rule, the court of second instance considers the complaint without holding a hearing, but if it considers that the case is complex or it is necessary to establish additional facts, then the consideration takes place at a hearing with the parties summoned. 

The final decision of the second instance court may be appealed by filing an application for leave to review with the Supreme Court within thirty days from the date of receipt of the final decision. If the Supreme Court grants such leave, the appeal must be filed within 15 days after the party is served with the Supreme Court’s decision granting review. The Supreme Court allows review of a decision of the second instance if it contradicts the practice of the Supreme Court, or it is a legal issue on which there is no precedent decision of the Supreme Court, or it is a legal issue on which the judicial practice of the Supreme Court is heterogeneous. Appealing a decision of the second instance does not prevent its execution. As a result of the consideration of the case, the Supreme Court makes a decision that is final and not subject to further appeal.

2. The procedure for issuing a payment order (“Plačilni nalog”) is applicable for overdue monetary claims that are supported by reliable documents. The legislation includes the following as reliable documents: official documents; private documents on which the signature is certified by the authority responsible for certification; bills and checks with protest and return invoices, if they are necessary to make a claim;   extracts from certified business books; invoices; documents that, according to special rules, have the meaning of state documents.   The procedure for issuing a payment order can also be applied at the initiative of a judge, if debt collection was initiated as part of a general claim proceeding, but all the requirements for using the procedure for issuing a payment order are met. If the amount of the claim does not exceed 2000 euros, then the court issues a payment order without attaching reliable documents confirming the debt to the application, but with mandatory justification of the stated requirements. After filing an application, the court considers the stated claims within the framework of this procedure without holding a hearing. As a result of considering the application, the court accepts a payment order, in which it orders the defendant to satisfy the demands in full within 8 days from the date of delivery or to provide an objection within the same period (in case of disputes over bills and checks – within three days). If the court does not agree to the proposal to issue a payment order, the case is subject to consideration in a general claim procedure. If the defendant does not raise objections within the specified period, the payment order acquires the force of a final decision. If the debtor raises an objection within the specified period, the court holds a hearing during which it makes a decision to uphold or cancel the payment order. In case of cancellation of a payment order, the case is subject to consideration in the general claim proceedings. 

3. The procedure for low-value disputes (“Postopek v sporih majnhe vrednosti”) is applicable to cases with a claim value of up to 2,000 euros for ordinary disputes, and up to 4,000.00 euros for commercial disputes. The procedure is generally the same as general litigation, but with certain procedural simplifications (occurs on the basis of written evidence in a shorter period of time) and restrictions on appealing a court decision (an appeal is allowed only against a decision to terminate proceedings).

After receiving a final court decision, if the debtor refuses to voluntarily comply with court decisions, forced execution of the court decision should be initiated. The period for voluntary fulfillment of obligations begins on the day following the day the decision is served on the debtor. A court decision may be brought for enforcement within 10 years from the date it acquires the force of a final decision. As part of the execution of the decision, the creditor’s claims can be satisfied by writing off funds from the debtor’s accounts, seizing the debtor’s movable and immovable property with their subsequent sale, foreclosure of other property or property rights and immaterial securities, sale of a partner’s share, as well as transfer of assets, belonging to organizations authorized for payment transactions.

If the debtor has signs of permanent insolvency (for example, if the debtor is more than two months late in fulfilling one or more obligations for a total amount exceeding 20 percent of the amount of his obligations reflected in the last publicly published annual report, or if there are insufficient funds in his accounts for the execution of a decision on execution or payment of a writ of execution and such a situation continues continuously during the last 60 days or with interruptions of more than 60 days during the last 90 days, and such a situation lasts the day before the submission of the proposal to initiate insolvency proceedings, or if he does not have at least one bank account opened with payment service providers in the Republic of Slovenia, and if, after 60 days from the date of the enforcement decision, it has not settled its obligation arising from the enforcement decision) or becomes insolvent in the long term (if the cost the debtor’s assets are less than the amount of his liabilities), the creditor has the right to initiate bankruptcy proceedings.

Within the framework of this procedure, provided that the debtor’s assets are absent or insufficient, it is possible to hold liable the participants and management of the debtor’s company, who are liable for the debtor’s obligations as joint and several debtors, if their actions show signs of failure to fulfill the obligations of the Law on Financial Transactions, Insolvency Procedures and Compulsory termination of activity, namely: did not submit a proposal to the court to initiate bankruptcy proceedings within a month from the moment signs of insolvency arose or did not fulfill obligations in the event of insolvency). In addition, it is possible to cancel transactions or actions of the debtor that caused direct damage to the creditor, for example, a transaction that resulted in either a decrease in the net value of the debtor’s property, as a result of which other creditors will be able to receive payment of their claims in a smaller proportion than if the action was not committed; or the person in whose favor the action was performed received more favorable conditions for repaying his claim against the debtor; a transaction in which the person in whose favor the action was performed knew or should have known at the time of the action about the insolvency of the debtor; a transaction on the basis of which another person received the debtor’s property without the obligation to perform its counter-performance, or for counter-performance of a small value; inaction of the debtor, as a result of which the debtor lost the right of ownership or arose a property obligation. 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 liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

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

# DEBT COLLECTION AGENCY SLOVENIA

12.04.2024

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