How to Collect Debts in the Czech Republic: A Legal Guide for Dutch Businesses

Struggling with an unpaid invoice from a Czech business partner? This guide provides Dutch companies with clear answers, explaining the critical differences between the familiar 'incasso' process and Czech legal realities. As a leading Czech law firm in Prague, EU, our English-speaking lawyers are ready to help you successfully navigate cross-border debt collection.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Before You Act: The Critical First Step and a Costly Mistake

The initial demand for payment is the most critical stage in any collection process. However, a Dutch company that simply translates its standard aanmaning (demand letter) and sends it to a Czech debtor is making a significant and costly error. The procedural requirements in the Czech Republic are fundamentally different and carry severe financial consequences if ignored.

The Dutch Approach vs. The Czech Requirement

In the Netherlands, the B2B debt collection process often begins with a formal demand letter, the aanmaning, whose specifics may be governed by the general terms and conditions agreed between the parties. The system assumes a relationship between commercially sophisticated equals. The Czech legal framework, by contrast, imposes a mandatory, debtor-protective "final warning" before litigation can officially begin.

This is not merely a procedural formality; it reflects a different legal philosophy designed to prevent a debtor from being caught unaware by a lawsuit and its associated costs. Under the Czech Code of Civil Procedure, a creditor is legally required to send a specific pre-action letter, known as a předžalobní výzva, to the debtor at least seven days before filing a claim in court.

The Financial Trap of an Incorrect Demand Letter

This předžalobní výzva must contain an explicit warning of your intent to file a lawsuit and seek recovery of all associated legal costs. If this specific, legally compliant notice is not sent and properly documented, a Czech court will almost certainly refuse to award you your legal costs, even if you win the case entirely on its merits. This can transform a clear legal victory into a significant financial loss, where you recover the principal debt but are left to pay your own substantial legal fees.

Risks and penalties	How ARROWS helps
Using your standard Dutch aanmaning. Your demand letter fails to meet Czech legal standards, leading to the forfeiture of your right to recover legal costs if you win in court.	Drafting legally required documentation – We ensure your pre-action letter meets all Czech legal standards to protect your financial interests. Contact us at office@arws.cz.
Agreeing to informal, undocumented payment plans. Verbal or poorly documented agreements are difficult to enforce if the debtor defaults again, forcing you to restart the collection process from scratch.	Contract drafting – We create legally binding settlement agreements and installment plans with robust enforcement clauses. Get tailored legal solutions by writing to office@arws.cz.
Miscommunication due to language and cultural barriers. Delays, misunderstandings, and a weakened negotiating position can jeopardize your recovery efforts from the start.	Legal consultations – Our multilingual lawyers act as your local representatives, ensuring clear, professional communication with your Czech debtor. For immediate assistance, write to us at office@arws.cz.

The Ticking Clock: Navigating the Czech Statute of Limitations

Time is a critical factor in any debt collection case, and the deadlines for taking legal action differ significantly between the Netherlands and the Czech Republic. Assuming you have the same amount of time to act as you would at home is a common mistake that can render your claim completely unenforceable in court.

A Shorter Window for Action

Dutch businesses are accustomed to a general limitation period of five years for commercial claims. In the Czech Republic, the window is considerably shorter. The general statute of limitations (promlčení) for a commercial debt is three years, starting from the invoice's official due date. If a debtor raises the objection that the claim is time-barred, a Czech court is required to dismiss it, regardless of its merits.

This shorter timeframe can be used as a strategic weapon by a Czech debtor who may employ delaying tactics, hoping a foreign creditor is unaware of the approaching deadline. It is therefore crucial to act decisively and not let negotiations drag on indefinitely without taking formal steps.

A Powerful Exception: The Acknowledgment of Debt

There is a powerful legal tool that can reset this deadline. If the debtor provides a written acknowledgment of the debt, a new ten-year limitation period begins from the date of that acknowledgment. Securing this document during the pre-litigation phase is a key strategic goal, as it neutralizes the debtor's time advantage and provides you with long-term security for your claim. Even a partial payment of interest can sometimes qualify as an implicit acknowledgment.

FAQ – Legal tips about Czech Limitation Periods

• When does the three-year period officially start?
  It typically starts from the invoice's due date, which is the first day you could legally demand payment. This is known as actio nata, or the day the action is "born." To confirm the status of your specific claim, email our lawyers at office@arws.cz.
• What counts as a valid "acknowledgment of debt"?
  It must be a written statement from the debtor confirming the existence and, ideally, the amount of the debt. For a formal review of your correspondence to see if it qualifies, contact us at office@arws.cz.
• Can the limitation period be paused?
  Yes, initiating court proceedings officially stops (or "tolls") the limitation period from running. Do not delay—get tailored legal solutions by writing to office@arws.cz.

Fast-Track Recovery: Your Options for Undisputed Debts

For undisputed claims, where the debtor is not contesting the invoice but is simply failing to pay, both Czech and EU law provide streamlined judicial procedures that avoid the time and expense of a full trial. The choice between a domestic Czech process and a pan-European one is a strategic decision based on the specifics of your case.

The Czech Payment Order (Platební Rozkaz)

The most effective domestic tool is the "Order for Payment Procedure" (návrh na platební rozkaz). This is a fast-track judicial process where a court can issue a binding payment order without holding a formal hearing. The process can often be initiated electronically (elektronický platební rozkaz) for greater efficiency.

Crucially, this is not a purely administrative process. A Czech judge must be personally convinced from the submitted facts and documentary evidence that your claim is justified before issuing the order. Therefore, success hinges on providing strong, clear evidence from the outset, including signed contracts, issued invoices, confirmed delivery notes, and any correspondence acknowledging the debt.

The European Payment Order (EOP)

For undisputed monetary claims between parties in different EU member states (except Denmark), the European Payment Order (EOP) offers a standardized and highly effective alternative. You can file a single EOP application using a standard form. If the debtor does not contest the claim within 30 days, the resulting order is automatically recognized and enforceable in the Czech Republic without needing a separate declaration of enforceability (exequatur).

While the EOP is administratively simpler, a debtor can object without giving a reason, which then transfers the case to standard civil proceedings. The Czech Platební Rozkaz, having already passed a judge's initial review of the evidence, can sometimes serve as a stronger deterrent against a frivolous objection. ARROWS can advise you on the most strategic path for your specific situation.

Risks and penalties	How ARROWS helps
Submitting insufficient documentary evidence for a Czech Payment Order. The court rejects your application at the initial stage, causing significant delays and wasted costs.	Legal analysis – We meticulously review your documentation to build a compelling and well-supported case for the court. Need a case review? Email us at office@arws.cz.
Incorrectly filling out or filing the EOP application. A simple administrative error can lead to the rejection of your application, resetting the 30-day issuance clock and delaying your recovery.	Representation before public authorities – We manage the entire EOP application process, ensuring all forms are completed and filed correctly. Our lawyers are ready to assist you – email us at office@arws.cz.
The debtor files an objection (odpor) to the payment order. The fast-track procedure is cancelled, and the case moves to lengthy civil litigation, for which you may be unprepared.	Representation in court – We seamlessly transition your case to our experienced litigation team, ensuring your claim is not derailed by procedural shifts. Need legal representation? Write to office@arws.cz.

Navigating Disputed Claims: From Objection to Full Litigation

If a Czech debtor formally objects to a payment order by filing an odpor, the fast-track procedure is immediately cancelled. The case then automatically transitions into a standard civil lawsuit, where the complexities of the Czech legal system require expert local representation.

The litigation process involves submitting detailed statements of claim, presenting evidence, and attending court hearings where both parties can argue their positions before a judge. Navigating this process requires deep knowledge of Czech procedural rules, filing deadlines, and courtroom practices. A simple procedural misstep can lead to the dismissal of an otherwise perfectly valid claim, making experienced legal counsel indispensable.

This is where ARROWS' international focus provides a distinct advantage. As an international law firm operating from Prague, European Union, we combine our courtroom expertise with a nuanced understanding of the commercial expectations of foreign businesses. Through the ARROWS International network, built over more than 10 years, we provide our clients with seamless legal support that bridges the gap between different legal cultures, ensuring your interests are robustly defended.

Securing Your Payment: Enforcement in the Czech Republic

Obtaining a final court judgment is a major victory, but it is not the final step. The judgment must then be enforced to secure your payment. The Czech Republic has a robust enforcement system, and EU law provides powerful tools to make this process more efficient across borders.

The Role of the Bailiff (Exekutor)

Once you have an enforceable judgment—whether from a Czech court or a confirmed EOP—the enforcement process is carried out by a judicial bailiff, known as an exekutor. Upon receiving a valid execution proposal, the exekutor is granted broad powers by the court to identify and seize the debtor’s assets. This can include freezing and seizing funds from bank accounts, placing liens on real estate, and seizing movable property such as vehicles, equipment, inventory, and company shares.

The European Enforcement Order (EEO)

If you have already obtained a judgment for an uncontested claim from a Dutch court, you can have it certified as a European Enforcement Order (EEO). This powerful certificate allows your Dutch judgment to be treated as if it were a local Czech judgment. It is directly recognized and enforced in the Czech Republic without any need for intermediate proceedings, making it a fast and efficient way to enforce a judgment you have already secured at home.

Risks and penalties	How ARROWS helps
The debtor has hidden or transferred assets to avoid seizure. You have a valid judgment but are unable to recover any funds, turning your legal victory into a hollow one.	Legal consultations – We work with trusted investigators to trace debtor assets before you incur the costs of a potentially fruitless enforcement action. Do not hesitate to contact our firm – office@arws.cz.
The debtor declares insolvency during the process. All individual enforcement actions are automatically frozen, and you must navigate a complex insolvency proceeding to recover any portion of your debt.	Representation before public authorities – Our insolvency experts can file your claim and represent your interests in Czech insolvency proceedings to maximize your recovery. Get tailored legal solutions by writing to office@arws.cz.
Procedural errors in filing the execution proposal. Mistakes in the application to the bailiff can cause significant delays, giving the debtor more time to dissipate their remaining assets.	Drafting documentation to prevent fines and penalties – We handle all filings with the court and the bailiff to initiate enforcement correctly and swiftly. For immediate assistance, write to us at office@arws.cz.

Your Strategic Partner in Prague: Why Dutch Businesses Choose ARROWS

Successfully collecting a debt in the Czech Republic requires more than just legal knowledge; it demands a strategic partner who understands the specific pitfalls faced by foreign businesses. The complex pre-action letter, the shorter statute of limitations, and the high standards of evidence can easily trap an unprepared Dutch creditor.

ARROWS acts as the essential bridge between your business expectations and the realities of the Czech legal system. Our team provides full-service support at every stage, from drafting an initial contract designed to prevent disputes to representing you in court and managing the final enforcement. We are known for our speed and high quality, consistently delivering results for our international clients.

Our firm supports over 150 joint-stock companies and 250 limited liability companies, with a global reach that extends to 90 countries. This extensive experience means we are not just lawyers; we are business-minded advisors who can even connect clients with mutual business or investment interests. As a leading law firm based in Prague, European Union, ARROWS is dedicated to protecting your investments and ensuring your success in the Czech market.

FAQ – Most common legal questions about Czech Debt Collection

• How long does the entire debt collection process take in the Czech Republic?
  An undisputed claim resolved via a payment order can take just a few months. However, a contested case that proceeds to a full court trial can take over a year. We can assess your specific case to provide a realistic timeline. For an evaluation, contact us at office@arws.cz.
• How much does it cost to pursue a debt claim in the Czech Republic?
  Costs vary by procedure. Court fees are typically a percentage of the claimed amount, for example, 5% for claims over CZK 20,000. Our primary goal is always to structure the case so these costs are ultimately recovered from the debtor. To discuss a fee structure tailored to your case, email us at office@arws.cz.
• What key documents do I need to start a claim?
  You will need the signed contract, all issued invoices, proof of delivery (such as signed delivery notes), and any correspondence where the debtor acknowledges the debt. Our lawyers can review your documents to assess the strength of your claim. Get tailored legal solutions by writing to office@arws.cz.
• Can I recover interest on the overdue amount?
  Yes, you are entitled to claim statutory interest on late payments under both Czech and EU law. We ensure this is calculated correctly and included in your claim to maximize your total recovery. Need help calculating your full claim? Write to us at office@arws.cz.
• What happens if the Czech debtor has no assets?
  Our process includes an initial assessment of the debtor's financial situation and asset profile. If recovery seems unlikely, we provide a clear legal opinion to help you avoid spending more money on an unenforceable debt. Do not hesitate to contact our firm for an initial assessment at office@arws.cz.
• Does ARROWS handle the entire process from start to finish?
  Absolutely. From the first legally compliant demand letter to the final enforcement of your judgment by a bailiff, our team at ARROWS, a leading Czech law firm in Prague, EU, manages every step to protect your interests. For comprehensive legal support, contact us today at office@arws.cz.

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