Debt collection in Slovakia

Extrajudicial debt recovery in Slovakia

A debt collection case in Slovakia starts at the out-of-court stage. This means that a debt collection agency or a law firm tries to get a Slovak debtor to pay the debt without any legal action being taken. This is done by analysing the debtor’s financial situation and by contact and persuasion. Contact is made by letter, telephone, and electronically. A debtor is informed at this stage that the consequence of non-payment may be legal action, with court costs and a legal fee being added to the debt. Most debtors therefore choose to pay at this stage of debt recovery (unless they dispute that there is, in fact, no debt).

Judicial debt collection in Slovakia​

Taking your debt collection case to court in Slovakia

Should the out-of-court collection measures not be sufficient in a case, it can sometimes be worthwhile to take legal action against a Slovak debtor in the process of debt recovery. In the case of judicial debt collection in Slovakia, the district courts (okresný súd) (§ 12 of the Civil Procedure Act (Civilný sporový poriadok)) in Slovakia are competent to hear cases in the first instance. The county courts are the courts of the second instance. That is, if a judgment of a district court is appealed.

The district court where the defendant is domiciled is usually the correct court to turn to. (Section 13 of the Code of Civil Procedure.) Against a defendant who is a private individual, this means that it is where the person resides. Where the defendant is a company, it is where the company is domiciled.

In Slovakia, it does not matter how large the claim is. The same courts will still have jurisdiction in the legal proceedings. In general, a case must be brought before the court within three years of the date on which the claim arose. The case can still be brought before the court, but if the debtor shows and pleads to the court that the claim is time-barred, the case is closed.

An application for a writ of summons made by a creditor shall be submitted to the court in writing. In order to initiate legal collection proceedings in the Slovak court, certain fees need to be paid to the court at the time of submitting the summons. The amount of the fee is determined in accordance with the court’s schedule of fees (Annex to Act No 71/1992 on court fees and fees for extracts from the criminal record (Zákon č. 71/1992 Zb. o súdnych poplatkoch a poplatku za výpis z registra trestov).

The procedure for an order for payment in Slovakia

In Slovakia, there is a summary procedure. In short, it is a procedure that is simplified and shortened compared to the usual legal proceedings. It saves the courts’ resources and is also simpler, cheaper, and quicker for creditors to use to obtain payment for their claims. The basic idea is that this simplified procedure is used when a debtor does not contest the claim for payment. This procedure is regulated in § 265 and the following paragraphs of Act No. 160/2015, the Civil Procedure Act (zákon č. 160/2015 Z.z. Civilný sporový poriadok).

It works in such a way that the court sends an order for payment to the debtor. A creditor’s claim to the court must be documented. This can be done, for example, by attaching the agreement between the creditor and the debtor to the application. The debtor then has 15 days to decide whether to contest the claim. If the claim is contested, the case is adjourned to a regular court hearing. However, a challenge must be justified.

If the claim is not contested, the order for payment can be used as an enforcement order by the creditor. This means that it has the same legal effect as a judgment. The competent court for this is the same as for an ordinary court hearing. So it depends on where the debtor is located. It is worth mentioning that there are no monetary limits to the use of this procedure.

Enforcement of judgments in Slovakia

If you, as a creditor, take legal action against your Slovak debtor and receive a decision/judgment that the debtor is obliged to pay your debt. What happens after that? Hopefully, this means that the debtor will then voluntarily pay what the judgment says he owes. But sometimes you need to go ahead with the enforcement of the judgment. This means getting help from the Slovak authorities to transfer assets from the debtor.

To start this procedure, a creditor needs to actively apply for enforcement. This is done electronically to the District Court in Banská Bystrica using a special e-form. In addition, an additional court fee of EUR 16.50 needs to be paid at the time of filing. Upon enforcement of a judgment, most of the debtor’s assets may be seized by the Slovak authorities and transferred to the creditor. This may involve the attachment of wages or other income or the sale of a debtor’s movable or immovable property.

Insolvency proceedings in Slovakia

Insolvency proceedings are a process that can arise when a debtor does not have sufficient ability to pay all its debts to its creditors. Three different insolvency proceedings can be initiated against Slovak debtors. Bankruptcy proceedings, reconstruction proceedings, and debt restructuring.

Bankruptcy refers to the inability of a company to pay all its debts. A bankruptcy trustee then takes over the running of the company to ensure that all creditors are treated fairly. Reorganisation aims to get a company back on its feet by drawing up a reorganisation plan with all its creditors in which they waive part of their claim. Debt restructuring (against natural persons) is a process whereby a debtor lives on a subsistence level for three years and pays anything above that to his creditors. If this is done well during the period, the remaining amount is then written off, and the person becomes debt-free.