How to Collect Debts in the Czech Republic for Swedish Businesses

Struggling with an unpaid invoice from a Czech debtor? This guide provides clear answers for Swedish businesses. As a leading Czech law firm in Prague, EU, with English-speaking lawyers, we explain how to navigate the Czech legal system, avoid common traps like the short statute of limitations, and successfully recover your funds. We regularly help foreign clients solve these exact issues.

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.

The Czech Challenge: Why Collecting Debts Isn't Like in Sweden

When dealing with a Czech debtor, the single greatest risk for a Swedish company is assuming the legal process is similar to your own. The "expectation gap" between the two systems can lead to costly, irreversible errors.

The 10-Year vs. 3-Year Statute of Limitations Trap

In Sweden, you are likely accustomed to a general 10-year limitation period (known as preskription) for commercial claims. This gives you a long time to negotiate or act.

The Czech Republic is critically different. The general statute of limitations (known as promlčení) for a commercial claim here is only three years from the due date of the invoice.

This is the most dangerous trap for Swedish creditors. If you wait patiently, your claim can become promlčené (statute-barred). If the debtor raises this formal objection (námitka promlčení) in court, your claim will be dismissed, even if it is valid.

State Enforcement (Kronofogden) vs. Private Bailiffs (Exekutor)

In Sweden, debt enforcement is handled by one, predictable government agency: the Swedish Enforcement Authority (Kronofogden).

The Czech system is not state-run. Once you have a judgment, enforcement (known as exekuce) is carried out by private, court-appointed bailiffs called soudní exekutoři.

This creates a challenge foreign clients do not expect. The choice of bailiff is a strategic decision, as not all are equally effective. ARROWS manages this entire process, using our network of trusted and effective bailiffs to maximize your recovery.

FAQ – Legal tips on Czech vs. Swedish Law

• What is the biggest mistake Swedish companies make?
  Waiting too long. The Czech 3-year statute of limitations (promlčení) is a hard deadline. If you have an unpaid invoice over 2.5 years old, you are at serious risk. For immediate analysis of your claim, email us at office@arws.cz.
• Can I just send my Swedish court judgment to the Czech debtor?
  No. A Swedish judgment must be formally recognized. As both countries are in the EU, this is streamlined under the Brussels I Regulation. We can manage this recognition process for you. Need to enforce a foreign judgment? Contact us at office@arws.cz.

Your First Move: The Amicable Phase (Up to 95% Success)

Before starting a court battle, a professional demand is essential. This amicable phase is not just a negotiation tactic; it is a critical legal prerequisite.

Up to 95% of commercial debt cases in the Czech Republic are successfully resolved at this stage. It is faster, significantly cheaper, and aims to preserve your valuable B2B relationship.

What is a předžalobní výzva (pre-litigation demand)?

This is the single most-missed step by foreign creditors. The předžalobní výzva (pre-litigation demand) is a formal legal document required by § 142a of the Czech Code of Civil Procedure.

It must be sent to the debtor's official address or, more commonly, their official data box (datová schránka) at least 7 days before filing a lawsuit. Why is this so important? If you fail to send this specific letter, the court will not grant you reimbursement for your legal fees, even if you win the case. You would win your €100,000 debt but be forced to pay your own €10,000 in legal costs.

ARROWS provides the drafting of legally required documentation to ensure this costly error is avoided.

Risks in the Amicable & Pre-Litigation Phase

Risks and Penalties	How ARROWS Helps
Losing Your Right to Legal Costs: You win the lawsuit, but the court denies your claim for legal fee reimbursement because a formal předžalobní výzva was not sent.	Drafting Legally Required Documentation: We draft and deliver the formal demand letter per § 142a, securing your right to full cost recovery. Need a demand letter prepared? Contact us at office@arws.cz.
Claim Becomes Statute-Barred: You negotiate amicably for 4 years, but the Czech 3-year promlčení (statute of limitations) expires. Your claim is now worthless.	Legal Consultations: We immediately analyze your claim's due date to ensure it is not statute-barred before you act. Get tailored legal solutions by writing to office@arws.cz.
Ineffective Communication: Your emails are ignored. The debtor sees no serious threat and continues to delay payment, damaging your cash flow.	Professional Representation: A formal demand from ARROWS, a leading Czech law firm, shows immediate, credible intent to litigate, forcing a response. Our lawyers are ready to assist you – email us at office@arws.cz.

When Negotiations Fail: Choosing Your Judicial Strategy

If the formal demand is ignored, you must go to court. As a Swedish company, you have two powerful, fast-track options. The choice is a key strategic decision.

Contact our experts:

Option A: The European Payment Order (EOP) – Your EU Advantage

This is a streamlined EU procedure designed for cross-border claims. We file a standard "Form A" on your behalf. The debtor is given 30 days to object.

Its main benefit: If unobjected, the EOP is automatically recognized and enforceable in the Czech Republic (and all other EU states) without any separate exequatur (recognition) process. It's a very powerful tool.

Option B: The Czech Electronic Payment Order (EPR)

This is the primary Czech fast-track procedure, the elektronický platební rozkaz (Electronic Payment Order).

It is very efficient. The court fee is lower for large claims (4% vs. 5%), and a recent change removed the monetary cap, so it works for multi-million euro claims. The debtor has only 15 days from delivery to file an objection, known as an odpor.

What is an odpor (objection) and what happens next?

This is the critical "catch." If a debtor files an odpor (objection) to the Czech EPR, they don't even need to provide a reason. The platební rozkaz (payment order) is automatically cancelled, and the case converts into a standard, slower civil lawsuit.

As an international law firm operating from Prague, European Union, ARROWS has daily experience with both. We provide the essential legal consultation to determine the best strategy for your specific case and offer full representation in court.

Need legal help in a Czech court? Contact us at office@arws.cz.

The Ultimate Risk: What if Your Debtor Files for Insolvency?

This is the greatest threat to your claim. If your Czech debtor enters insolvenční řízení (insolvency proceedings), all collection efforts stop immediately. Your lawsuit is frozen.

The 2-Month Deadline: A Trap That Permanently Extinguishes Your Debt

From the moment insolvency is declared, you have a strict 2-month deadline to file your claim. If you miss this window, your debt is permanently extinguished. It ceases to exist, and you get nothing.

Procedural Traps: The Wrong Form and No Translation

You cannot just email your invoices. You must file using the official Czech form, the Přihláška pohledávky.

A savvy Swedish in-house counsel might find the "Standard EU Claims Form". Do not use it. Czech administrators expect the national form, and using the wrong one invites a formal challenge (popření pohledávky), risking rejection.

Furthermore, all supporting documents (contracts, invoices) must have an officially certified translation into Czech. A simple office translation will be rejected.

The Sobering Reality of Recovery

Even if you file correctly, recovery rates for unsecured creditors (like suppliers with unpaid invoices) average just 3.2% in a liquidation bankruptcy. This shows why you must act before the debtor becomes insolvent.

FAQ – Legal tips on Czech Insolvency

• What is a pohledávka?
  It is the Czech legal term for your monetary claim or receivable. In an insolvency, you must formally register this pohledávka to be recognized as a creditor.
• What is a dlužník?
  This is the simple Czech term for the "debtor," the person or company that owes the obligation.
• I just heard my Czech customer is in financial trouble. What do I do?
  Contact us immediately. We can monitor the Czech Insolvency Register for you. If a debtor files, we are ready to draft and file your Přihláška pohledávky instantly to meet the 2-month deadline. For immediate assistance, write to us at office@arws.cz.

Critical Risks in Czech Insolvency Proceedings

Risks and Penalties	How ARROWS Helps
Permanent Loss of Claim (2-Month Deadline): You miss the strict 2-month deadline to file your claim. Your debt is legally extinguished forever.	Insolvency Monitoring & Drafting: We monitor the register and prepare the claim (přihlášení pohledávky) to ensure you are filed correctly and on time. For immediate assistance, write to us at office@arws.cz.
Claim Rejection (Wrong Form/Language): Your claim is challenged (popření pohledávky) because you used the standard EU form instead of the Czech Přihláška pohledávky or failed to provide certified translations.	Drafting Legally Required Documentation: Our team ensures the correct Czech form is used and all evidence is accompanied by certified translations, as required by law. Need your claim drafted? Contact us at office@arws.cz.
Minimal Recovery (3.2%): You wait too long, and the debtor's only option is insolvency. You recover only 3.2% of your invoice value, a near-total loss.	Pre-Insolvency Legal Consultation: We assess the debtor's health early. If insolvency is a risk, we can use interim measures to secure assets before proceedings begin. Get tailored legal solutions by writing to office@arws.cz.

The Final Step: Enforcement (Exekuce) in the Czech Republic

You have a final judgment (an unobjected EOP or EPR). Your pohledávka (claim) is confirmed. But you still don't have your money. Now, you must "execute" the judgment.

What is Exekuce (Enforcement)?

As we've discussed, this is the forced recovery of your debt. This process is carried out by a court-appointed private bailiff (soudní exekutor) whom you authorize.

What Powers Does an Exekutor Have?

The exekutor has broad legal powers and, unlike in some systems, they (not the court) decide which assets to target. This includes:

• Freezing and seizing funds from all bank accounts (obstavit účet).
• Garnishing receivables (i.e., collecting from your debtor's customers).
• Seizing and selling movable property (vehicles, equipment) and real estate.

The Commercial Reality: Is the Debtor an "Empty Shell"?

A legal victory is worthless if the debtor is an "empty shell". This is a common frustration for creditors, as Czech enforcement can be lengthy and costly. Pursuing a debtor with no assets is "throwing good money after bad".

This is why ARROWS' most valuable service is often the Pre-Litigation Asset Investigation.

Before you spend a cent on court fees, we use tools like the Central Evidence of Executions (CEE) to see if the debtor already has multiple enforcement actions against them. This commercial-first advice saves you from a costly, pyrrhic victory.

Risks During the Enforcement (Exekuce) Phase

Risks and Penalties	How ARROWS Helps
"Empty Shell" Debtor: You spend thousands on legal fees and win a final judgment, only to discover the debtor company has no assets, making your judgment worthless paper.	Pre-Litigation Asset Investigation: Before filing, we assess the debtor's assets and existing enforcement actions to advise if recovery is commercially viable. Get a clear risk assessment by writing to office@arws.cz.
Debtor Dissipates Assets: During the lawsuit, the debtor learns of the action and begins selling property, transferring funds, or hiding equipment.	Securing Interim Measures: We can apply to the court for an emergency "freezing order" (interim measure) to secure the debtor's assets while the case is ongoing. Do not hesitate to contact our firm – office@arws.cz.
Inefficient Recovery: The enforcement process stalls. The chosen exekutor is not proactive, and your recovery takes years, if it happens at all.	Cooperation with Bailiffs (Exekutoři): ARROWS manages the entire exekuce process. We work with a network of trusted, effective bailiffs to ensure assets are seized and liquidated as swiftly as possible. For immediate assistance, write to us at office@arws.cz.

Why Choose ARROWS as Your Partner in Prague?

As a Swedish business, you need more than a Czech lawyer. You need a partner who understands both legal worlds. As an international law firm operating from Prague, European Union, we are your safe harbour for Czech commercial law.

Local Experts, International Reach

Our lawyers in Prague combine deep local knowledge with a global perspective. We support over 250 limited liability companies and 150 joint-stock companies.

We are part of the ARROWS International network, built over 10 years and operating in 90 countries. We handle complex cross-border matters seamlessly. We can even connect clients with mutual business or investment interests.

A Full-Service Solution for Your Business

We don't just collect debts; we protect your business. Our team is known for speed and high quality. We can provide:

• Legal consultations to assess risk and strategy.
• Drafting legally required documentation (from the předžalobní výzva to the přihlášení pohledávky).
• Proactive contract drafting and review to prevent future debts.
• Full representation in court and before public authorities.
• Managing the entire exekuce (enforcement) process.
• Professional training for employees or management on Czech compliance.

Don't let a Czech debtor jeopardize your cash flow or waste your time. Let our lawyers provide the tailored legal solutions you need.

Get tailored legal solutions by writing to our Prague office at office@arws.cz.

FAQ – Most common legal questions about Debt Collection in the Czech Republic

1. How much does it cost to collect a debt in the Czech Republic?
Costs include court fees (typically 4% for an EPR) and legal fees. Critically, if you send the formal předžalobní výzva, these costs are generally recoverable from the debtor upon winning. We provide a clear cost estimate. To understand your options, email us at office@arws.cz.

2. How long does the Czech platební rozkaz (Payment Order) take?
If the evidence is clear, the court can issue the order quickly, often in weeks. The debtor then has 15 days to object. If they don't, the judgment is final and enforceable, often within 1-2 months. Our lawyers are ready to assist you – email us at office@arws.cz.

3. My claim is 4 years old. Is it too late to collect?
It is highly likely. The Czech statute of limitations for B2B claims is 3 years. If your claim is 4 years old, the debtor can raise the promlčení (limitation) objection, and the court will be forced to dismiss your case. Do not wait. For an urgent review of your claim, write to office@arws.cz.

4. What is a datová schránka (Data Box)?
This is a mandatory, official digital mailbox for all Czech companies. Courts use it to deliver all legal documents, including a platební rozkaz. A document is legally "delivered" 10 days after it arrives, even if the debtor never opens it. It's a common procedural trap. Get tailored legal solutions by writing to office@arws.cz.

5.What happens if my debtor just files an odpor (objection)?
If the debtor files an odpor against a Czech payment order, the order is automatically cancelled, and the case converts to a standard civil lawsuit. This is a slower process, but we provide full representation in court for this. Need legal help in a Czech court? Contact us at office@arws.cz.

6. Can I enforce my Swedish judgment in the Czech Republic?
Yes. Thanks to the EU's Brussels I Regulation, a judgment from a Swedish court is recognized in the Czech Republic. It does not require a full new trial, but it does require a formal recognition process. We handle this regularly. Do not hesitate to contact our firm – office@arws.cz.

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