One of the least pleasant parts of recovering 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 that 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.
|Legislation applicable||The Civil Procedure Code is the main law covering debt collection in Poland|
Possibility to dispose seizure of assets through amicable debt recovery (YES/NO)
|No, seizure of assets cannot be disposed during the amicable procedure to recover a debt|
Seizure of assets step in the debt collection procedure
Seizure of assets is the last step in debt collection in Poland
|Party initiating the seizure of assets||The creditor initiates the seizure of debts during the court procedure in debt recovery|
|Types of enforcement procedures||
Poland provides for the enforcement of monetary and non-monetary claims
|Possibility to seize movable goods (YES/NO)||
YES, movable goods such as cars, jewelry, and other assets can be seized
|Possibility to seize immovable goods (YES/NO)||
YES, real estate can also be seized in Poland
|Option to dispose the seizure of money in bank accounts (YES/NO)||
YES, bank accounts can be placed under seizure in Poland
|Restrictions on enforcement of court orders (YES/NO)||
YES, there are also restrictions on court orders referring to certain goods that can be seized
|Restrictions on seizure of certain assets (if any)||
YES, personal belongings, such as:
– household goods,
– money that is not subject to the debt, etc
|Type of Polish court issuing seizure orders||
|Requirement to appoint a bailiff (YES/NO)||
YES, it is mandatory to appoint a bailiff to complete the procedure of seizure of assets
|Possibility to sell seized assets to recover a debt (YES/NO)||
YES, the goods seized can be sold to pay the creditor(s)
|Options to avoid the seizure of debts in Poland||
Reaching an agreement with the creditor(s) is the main way to avoid the seizure of assets in Poland
|Debt collection services available (YES/NO)||YES, we provide debt collection support in Poland|
Most of the time, agricultural businesses which imply ownership of land titles are found on the list of assets that 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 a court of law.
Assets that 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.
Who issues the enforcement order for the confiscation of assets?
The enforcement order for the seizure of assets cannot be issued by any court. The application should be delivered to the debt enforcement officer pertaining to the courthouse where the debtor lives or resides.
Under certain limitations, the creditor may select a debt enforcement officer from a different district. The procedure to follow is:
- first, the respective officer for the district where the immovable property is located must be contacted if the creditor wishes to seek enforcement of their claims against the debtor’s immovable property;
- second, if the debt enforcement officer has too many cases, or has exceeded the ratio of cases accepted, he or she cannot accept an application submitted by a creditor from outside the district.
Only upon receiving a request from the creditor, the debt enforcement officer can start the process. After receiving the enforcement order, the creditor may submit the application for the seizure procedure.
If you find yourself in a situation in which you wish to address another court than the one the debtor belongs to, you can get in touch with our Polish debt collection lawyers who can advise you.
The enforcement order in Poland
When dealing with the confiscation of assets in Poland, as a creditor you should expect to get an enforcement order followed by an enforcement title. The two cannot go one without the other in this exact order:
- the first one issued the enforcement order through which the court disposes the seizure of the assets;
- then comes the enforcement title which is the documents stating the assets to be seized and is the final paper or decision issued by the court.
The enforcement title is accompanied by the declaration of enforceability.
Dealing with debt collection at this point can be difficult because of the legal terms, which is why asking for legal support is essential for both creditors and debtors. While the first category will be able to make sure that they will recover what they are owed, for the second category, our lawyers can make sure that the procedure is correct. However, it is also possible for debtors to benefit from protection measures.
The enforcement title and declaration of enforceability
As seen above, the enforcement title is the final court judgment or other public document that identifies both the debtor and the creditor and establishes the debt’s existence and balance of the debtor from which the outstanding amount of money can be recovered.
The following documents are considered as having enforcement title by Polish law:
- an arbitration award;
- a settlement reached before a mediator;
- a court settlement;
- a notarial act that includes the debtor’s statement on submission to enforcement;
- judgments rendered by courts of EU Member States;
- settlements reached before or approved by them;
- public documents drafted in the EU Member States and certified as a European Enforcement Order.
An enforcement title, such as a court judgment, becomes an enforcement order upon the declaration of enforceability, and this document serves as the foundation for the start of procedure of seizure of assets in Poland.
The title will contain the debtor’s name and the approval of the start of enforcement. If necessary, it can also indicate the purpose and boundaries of enforcement as well as whether the decision is final and not subject to further review or immediately enforceable.
The competent court can issue the declaration of enforceability voluntarily or in response to an application. The issuance is usually made in 3 working days, however, it is possible for delays to also appear.
The seizure of assets as security measures in debt recovery in Poland
It is important to understand that 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 a judgment that 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 the 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 more than 800 entities;
- the percentage of companies declaring insolvent and restructuring in 2017 was 2,9%, respectively 9,1%.
For assistance in debt collection and seizure of assets in Poland, please contact our lawyers.