One of the least pleasant parts of recovering a debt in Poland is the seizure of assets of the debtor. However, when no other alternative has worked, this is the only way for a creditor to be compensated for the loss suffered.
The seizure of assets in Poland can be completed after the trial and only based on a court order issued by the judge. If you need assistance in relation to the seizure of assets as part of a debt collection case in Poland, our lawyers can help you. You can rely on our debt collection lawyers in Poland during the entire procedure of recovering a debt.
What are the measures to protect a creditor in debt collection in Poland?
There are several laws which provide for debt collection in Poland, among which the Civil Code of Procedure is the most important because it contains provisions on the measures for the protection of creditors.
The following measures can be disposed by a Polish court in relation to the seizure of assets in a debt recovery case:
- the seizure of various types of assets, including movable and immovable goods of the debtor;
- real estate property can also be sized if it is subject to a mortgage or other type of loan which could not be paid by the debtor;
- a prohibition order on the disposal of a property subject to encumbrances, such as loans or mortgages;
- a prohibition order related to the use of a vessel or any other type of boat under construction, if it is subject to a mortgage;
- businesses can also be subject to court orders given as measures for the protection of creditors.
Most of the times, agricultural businesses which imply ownership of land titles are found on the list of assets which can be confiscated or frozen for the purpose of debt collection in Poland.
If you find yourself in the position of not being able to recover a debt amicably, it is recommended to ask for the support of a debt collection agency in Poland or even a lawyer who can represent you in the court of law.
Assets which can be seized in Poland
When the writ of execution is obtained the bailiff is entitled to start further procedures in order to recover the debt.
All the debtor’s assets can make the subject of the seizure procedure:
- movable goods;
- immovable goods;
- bank accounts;
- real estate properties;
- property rights and other claims belonging to the debtor.
However, the Polish Law provides that certain goods cannot be seized, for example:
- clothing, bedding, minimum household equipment;
- food and fuel needed for a month;
- three sheep, one cow or two goats;
- equipment needed in the debtor’s daily work;
- money that is not the subject of enforcement;
- a certain amount of money from the debtor’s income or when the debtor is unemployed a certain amount of money needed to maintain a minimum lifestyle for two weeks;
- aids given by the Polish Govern, as provided by the law;
- non- transferable rights;
- payments for personal insurance.
Our debt collection lawyers in Poland can offer complete information on the seizure of assets in this country.
Steps in the confiscation of assets in Poland
The bailiff will draw up a list with the debtor’s goods that will be used in the further procedure, for example in the public auction.
The bailiff must inform the debtor about each action taken against him and shall inform him that by paying the debt any further measure will be stopped.
As a general rule, the debtor loses the right to take advantage of his goods until the entire procedure is accomplished.
In this sense, third parties, for example, bank institutions, are informed about the debtor’s situation. The bailiff sends an official document to each bank institution where the debtor has opened an account in order to inform about the compulsory measures taken against the debtor. From that moment on, the bank accounts are blocked and the debtor can not withdraw money or make any payment.
The debtor’s bank accounts are the first assets used to pay the debt.
When the claim is not fulfilled, the law permits installment payments from the debtor’s regular income (salary).
The last step which must be taken is the seizure of assets. The bailiff seizes the debtor’s assets which are later the target of the selling procedure. When the debtors oppose to the debtor’s actions, the police force can be used.
The debtor’s assets are usually sold in public action. The list drawn up in the first instance by the bailiff will be used. This means that the goods will be sold in accordance with certain rules of priority.
The selling procedure stops when the claim is fulfilled. The new owner has the obligation to deposit a certain sum in the public auction procedure and the rest of the amount in the period provided by the law.
The seizure of assets as security measures in debt recovery in Poland
It is important to understand that the Polish legislation does not provide for the confiscation of assets to be the first measure taken in order to recover a debt, no matter if the case was filed by a natural person of the commercial entity.
Such security measures can be imposed when:
- the claimant has filed a petition in this sense with the court of the first instance, or better said during the initial stage of court proceedings (prior to any appeal);
- in cases where the judge presiding the case rules ex officio (the court examines the case and provides for this measure without any petition);
- when the application for security is filed in writing by one of the parties in the trial;
- the security can also be provided before or during the court proceedings, based on the evidence submitted;
- in the case of applications for security, these must be filed one week before the legal proceedings begin.
The security will be provided based on a court judgment issued by a Polish court. However, an EU court also issues judgment which can be recognized and enforced in Poland. Our debt collection lawyers can offer more information on the recognition and enforcement of court orders.
The effect of security measures related to the seizure of assets in Poland
The most important effect and the reason why the seizure of assets is disposed in Poland is the protection of the creditor. However, the effects of such a decision can go further. Even so, there are also various obligations to comply with when disposing the confiscation of assets in Poland. The bailiff will need to manage the assets with respect to the regulations imposed by the Civil Code. Also, the bailiff is required to report to the court on any changes brought to the assets.
The creditor has the right to be compensated for the debt through the sale of real estate property or collection of the amount of money and interests arising from it from the debtor’s bank account.
The number of debtors in Poland in the last few years has decreased, and according to numbers:
- 15,8% of the debtors against which debt collection was started declared bankrupt at the end of 2016;
- according to the World Bank, the rate of successful debt collection cases in Poland was over 60% in 2016;
- when it comes to commercial debt collection proceedings, in 2017, the number of companies against which such procedures were started was of more than 800 entities;
- the percentage of companies declaring insolvent and in restructuring in 2017 was 2,9%, respectively 9,1%.
For assistance in debt collection and seizure of assets in Poland, please contact our lawyers.