Vymáhání pohledávek od A do Z

Part I: Before You Go to Court: Strategies for the Out-of-Court Phase

The foundations for successful debt recovery are laid long before an invoice becomes overdue. The key is an ironclad evidentiary position. In the event of a dispute, you must be able to unequivocally prove the existence and amount of your claim. Without this, your chances in court are dramatically reduced.

The most important pieces of evidence include precisely drafted contracts, unambiguous orders, handover protocols, issued invoices, and all communication with the debtor, such as emails or minutes from meetings.

Meticulously kept documentation is your strongest weapon in any payment dispute. This is precisely why the lawyers at ARROWS regularly assist clients with the preparation and review of contractual documentation designed to minimise risks and strengthen their position in case of future disputes.

A Pre-Action Letter from a Lawyer: More Than Just a Formality

If the debtor does not respond to standard reminders, it is time for the first formal step – a pre-action letter. This document has a dual strategic importance. Firstly, it is a legal necessity. According to the provisions of Section 142a of the Czech Code of Civil Procedure, you must send the debtor a demand for payment at least 7 days before filing a lawsuit to be entitled to the reimbursement of legal costs if you win the case.

Secondly, and this is crucial, it has a huge psychological effect. While a debtor might ignore a reminder from you, a letter on a law firm's letterhead is a clear signal that you are serious and prepared to defend your rights in court.

A letter from a lawyer dramatically increases the likelihood that the debtor will pay, as they realise that the next step for them means court and significantly higher costs.

Sending a professional pre-action letter is one of the most common and effective services that we at ARROWS provide daily for our clients, including more than 150 joint-stock companies and 250 limited liability companies.

How to Secure a Stronger Position Without Going to Court? The Power of an Acknowledgement of Debt

One of the most powerful tools in the out-of-court phase is an acknowledgement of debt. This is a written declaration by the debtor that they acknowledge their debt in both its reason and amount. This document has two fundamental legal consequences that radically strengthen your position.

Firstly, the burden of proof shifts. From the moment of signing, the debt is presumed to exist, and it is up to the debtor to prove otherwise. You no longer have to laboriously prove the existence of the claim. Secondly, acknowledging the debt interrupts the standard three-year limitation period and a new ten-year limitation period begins to run. This gives you enough time for further steps without having to worry about the claim becoming time-barred.

Our Prague-based lawyers at ARROWS can help you negotiate with the debtor and prepare a legally sound acknowledgement of debt, often combined with a realistic payment schedule, which is a constructive solution that protects your rights.

Risks in the Out-of-Court Phase and How to Prevent Them with ARROWS

Part II: When an Agreement Is Not Enough: Court Proceedings as a Path to an Enforcement Title

If the out-of-court phase does not yield the desired result, it is time to turn to the court. However, this is not just about mechanically filing a lawsuit. Strategy is key here as well. The choice between a classic lawsuit and a fast-track procedure can fundamentally affect the speed and cost of the entire process.

Classic Lawsuit or Electronic Order for Payment (EOP)? A Strategic Decision

Once you decide to take legal action, you face a strategic choice. For well-documented and likely undisputed monetary claims, the electronic order for payment (EOP) is often the best tool. Its main advantages are speed, as the court can decide within weeks, and a lower court fee, which is 4% of the claimed amount instead of 5% for a classic lawsuit.

Conversely, a classic lawsuit is suitable for more complex cases where you expect an active defence from the debtor, or if proving the claim requires taking evidence, such as examining witnesses.

How Does the Fast-Track EOP Procedure Work and What Are Its Pitfalls?

The EOP procedure is designed to be fast and efficient. The application is submitted on a special electronic form, and if the court finds the claim to be proven by the submitted documents, it issues an order for payment. The debtor then has 15 days to pay the debt or file a statement of opposition. However, this is where the main risks lie.

Firstly, the EOP must be served on the debtor in person; substitute service (so-called deemed service) is excluded (except for entities served via a data box). If the debtor deliberately avoids service, the court will cancel the EOP and the proceedings will automatically turn into a standard lawsuit, causing you to lose the advantage of speed and the lower fee. Secondly, the debtor can have the EOP completely cancelled by filing a statement of opposition, which does not even need to be justified. In this case, too, the proceedings turn into a classic lawsuit.

Based on an analysis of the debtor and the nature of the claim, our experienced lawyers at ARROWS can assess whether the risk associated with an EOP is acceptable or if it is strategically more advantageous to file a classic lawsuit from the outset. This saves you time and money.Claims with an International Element: How ARROWS Resolves Cross-Border Disputes

In today's globalised world, having a business partner abroad is not an exception. Recovering debts across borders may seem like an insurmountable obstacle, but with expert guidance, it doesn't have to be. The European Union's legal framework, particularly the Brussels I bis Regulation, significantly simplifies the recognition and enforcement of court decisions between member states.

For specific situations, there are even more effective tools, such as the European Enforcement Order for uncontested claims or the European Account Preservation Order, which allows for the preventive freezing of a debtor's funds in an account in another EU country.

Thanks to our ARROWS International network, built over ten years, and our practical experience with cross-border cases, we handle the recovery of claims with an international element on a daily basis. Not only are we familiar with the relevant European instruments, but thanks to our partners abroad, we also understand local procedural specifics and language barriers, which is crucial for success.

Part III: The Final Stage: How Does Enforcement Work and What Does It Mean in Practice?

Winning a court case is only half the battle. The court's decision itself will not put money in your account. If the debtor does not pay voluntarily even after a final and binding judgment, the last, coercive stage begins – enforcement.

You Have a Judgment. What's Next? The Path to Initiating Enforcement

A final and enforceable judgment or order for payment is a so-called enforcement title. It is the key that opens the door to the compulsory recovery of your claim. The next step is to choose a judicial enforcement officer who will carry out the enforcement. This choice is entirely up to you as the creditor. Subsequently, an enforcement petition is filed directly with the chosen enforcement officer.

For a layperson, this process can be administratively demanding. ARROWS handles the entire process for clients, from obtaining the enforcement title with a declaration of enforceability to filing the petition with a proven and efficient judicial enforcement officer, thereby making the whole process more efficient and faster.

What Tools Does an Enforcement Officer Have and What Is Their Impact on the Debtor?

A judicial enforcement officer has several ways to recover a monetary claim. The most common include:

• Deductions from wages and other income: The enforcement officer orders the debtor's employer to make deductions from their salary. The debtor must always be left with a so-called non-seizable amount for living expenses.

• Attachment of a claim from an account: This involves freezing a bank account. On the enforcement officer's order, the bank "freezes" the funds in the account up to the amount of the claim being recovered, and the debtor cannot dispose of them.

• Sale of movable and immovable property: If the previous methods do not achieve the goal, the enforcement officer may proceed to sell the debtor's property.

In practice, several enforcement methods are often used concurrently. A situation may arise where deductions are made from the debtor's wages, and the remaining part of the wages sent to their account is then also subject to enforcement on the account. The debtor can defend against this double seizure by setting up a so-called protected account, to which their non-seizable wage portion and other protected income are sent.

Knowledge of these mechanisms allows the lawyers at ARROWS to better strategically plan the enforcement and effectively communicate with the enforcement officer about choosing the most appropriate methods of seizing assets.

Risks in Enforcement Proceedings and Solutions from ARROWS

Part IV: Strategic Prevention and Crisis Management

A truly expert approach is not just about solving existing problems, but primarily about preventing them. The biggest losses for creditors are often not caused by a lost court case, but by two silent enemies: time and the debtor's insolvency.

Statute of Limitations: The Silent Enemy of Every Claim

Time is working against you. Every claim has a lifespan, after which it becomes time-barred. This does not mean the debt ceases to exist, but if the debtor raises the statute of limitations defence in court, the court will dismiss your claim and you will not be able to enforce it.

The standard limitation period for commercial obligations under Czech legislation is 3 years and begins to run on the day following the claim's due date. As mentioned earlier, this running of time can be effectively interrupted and reset by obtaining a written acknowledgement of debt, which establishes a new, ten-year limitation period.

One of the cornerstones of our advisory services for companies is monitoring limitation periods and taking timely steps to interrupt or suspend them. In this way, we protect the value of your assets.

When a Debtor Is Heading for Insolvency: How Not to Lose Your Money

The biggest risk for any creditor is the debtor's insolvency. Once insolvency proceedings are initiated against a debtor, all standard collection efforts, including enforcement, are stayed. The only way to recover your money is to file a proof of claim in the insolvency proceedings.

Here, however, you must act quickly and flawlessly. The deadline for filing claims is just two months from the court's decision on bankruptcy.

If you miss this deadline, your claim is extinguished in the proceedings, and you will most likely never see your money again. Furthermore, the proof of claim must be submitted on the prescribed form and be duly substantiated, otherwise it risks being rejected.

Timely and formally correct filing of claims in insolvency proceedings is a key service that ARROWS provides. Thanks to our monitoring systems and experience, we ensure that our clients do not miss this critical deadline. We also represent clients at creditors' meetings and on creditors' committees, where we actively protect their interests.

Alternative Routes: When to Consider Mediation or Arbitration?

A lawsuit is not always the only or the best solution. Modern law offers alternative dispute resolution (ADR) methods that can be more advantageous in many cases.

• Mediation: This is a process where a neutral third party (the mediator) helps the parties to a dispute find a mutually acceptable agreement. It is fast, inexpensive, confidential, and ideal for cases where you want to maintain good business relationships with your partner. The resulting mediation agreement is as legally binding as any other contract.

• Arbitration: This is a private alternative to court proceedings. The dispute is not decided by a judge, but by an arbitrator (or an arbitral tribunal) chosen by the parties. The proceedings are significantly faster, more flexible, and confidential, which is highly valued in commercial disputes. The resulting arbitral award is enforceable just like a court judgment.

Our lawyers can help you not only with drafting high-quality arbitration clauses for your contracts but can also effectively represent you in arbitration proceedings or recommend mediation where it is the best solution for your business.

Common Mistakes by Creditors and How ARROWS Helps Prevent Them

Conclusion: Debt Recovery Is Not a Sprint, but a Strategic Marathon with the Finish Line at ARROWS

Effective debt recovery is not a series of random steps, but a well-thought-out strategic process. Success depends on a combination of prevention in the form of high-quality contracts, a quick reaction to prevent claims from becoming time-barred, strategic decision-making on the most appropriate course of action, and expert execution in the judicial and enforcement phases.

Whether you are facing an unpaid invoice, dealing with a complex case with an international element, or want to proactively set up your processes to prevent problems from occurring in the first place, the team of experts at ARROWS is ready to help you. Our experience from long-term cooperation with a portfolio of more than 150 joint-stock companies, 250 limited liability companies, and 51 municipalities and regions gives us a unique insight into the needs of entrepreneurs.

We pride ourselves on speed and high quality and offer comprehensive services: from the preparation of internal guidelines and contractual documentation, through representation before courts and administrative authorities, to obtaining necessary licenses and providing expert training for your employees, including certification. We understand that law serves business. That is why we actively seek out and connect interesting investment and business opportunities for our clients.

Don't wait until it's too late. Contact us today to arrange a no-obligation consultation. Together, we will protect your finances and support the growth of your business.