How to successfully collect your company's debts in 2026

JUDr. Jakub Dohnal, Ph.D., LL.M.
JUDr. Jakub Dohnal, Ph.D., LL.M.
20.4.2026 | ARROWS law firm

When your business partner fails to perform over the long term, it is more than just a paperwork issue. As of January 2026, debt recovery rules have changed significantly—new digital tools have emerged, procedures have accelerated, and your options for effectively securing payment have expanded. This article will guide you through the current legal framework, practical steps, and, above all, the mistakes to avoid so that you can actually recover your receivable.

The photo shows a professional during a consultation regarding debt recovery.

Summary

As of 1 January 2026, legislative changes have entered into force that digitalise wage garnishments, introduce new rules for the assignment of receivables, increase default interest, and support preventive restructuring. These changes give creditors more effective tools to enforce their rights in the Czech Republic.

Prevention is often cheaper than court proceedings. A well-drafted contract, a contractual penalty, an arbitration clause, and timely communication can save you months of waiting and significant costs for attorneys and enforcement officers.

Time limits are also critical. A claim becomes time-barred after 3 years, a pre-action demand letter must be sent at least 7 days before filing a lawsuit, and an electronic payment order can be issued within days. Underestimating deadlines can be costly.

Do not forget the ancillary elements of the claim either. Default interest, which in the first half of 2026 reaches 11.50% per annum, contractual penalties, and legal costs can significantly increase the amount you can claim.

Legal framework for debt recovery in 2026

As of 1 January 2026, a number of changes have taken effect that transform the way receivables are recovered in the Czech Republic. These are fundamental changes not only in enforcement law, but also in digitalisation processes and in the availability of new corporate tools that give creditors greater certainty when collecting money from non-paying debtors.

The most important change is the new regulation of the register of enforcement wage garnishments, which aims to significantly simplify and speed up communication between court enforcement officers and employers. Instead of paper bureaucracy, communication now runs digitally, which means the money can reach your account faster. At the same time, the options for securing your claim even before you get to court have expanded.

The second pillar is support for preventive restructuring. If your debtor is an entrepreneur who has run into temporary financial difficulties, there are now legal procedures to address the problem together without formal insolvency proceedings – which can also get your money back faster.

The third major development is the new rules for the assignment of receivables effective from 1 January 2026. While the assignment of receivables has long existed in the Czech legal system, the new regulation introduces specific conditions for certain types of assignments. This means that if you do not want to recover the receivable yourself, you can sell it to specialists – factors or other commercial companies – and avoid lengthy court proceedings.

Under the new regulation, the assignment may be conditional on the assignment price not being lower than the amount owed, and payment must be made cashless. Failure to comply with these conditions may lead to the assignment being invalid or challengeable.

Key recovery steps: from a demand letter to enforcement

Debt recovery in a company usually takes place in three main phases. Knowing them and having them properly handled from a legal perspective pays off, because each phase has its pitfalls and conditions for success.

Pre-action demand letter – the last chance for an out-of-court solution

Everything starts with a pre-action demand letter, which you send to the debtor in writing, ideally by registered mail. From our experience, a large percentage of cases are resolved after the first letter – if it is properly drafted and sufficiently persuasive.

The pre-action demand letter must contain an exact description of how the claim arose (contract no. X, invoice Z dated, etc.). You must also state the total amount due and the payment deadline, which should be at least 7 days, although a longer period is recommended. Clear payment details (your account number) and a warning about accruing default interest and legal costs are also important.

If you do not send this letter at least 7 days before filing a lawsuit, the court may refuse to award you reimbursement of legal costs, even if you win. This is one of the most common mistakes we see.

Related questions on the pre-action demand letter

1. Do I have to send a pre-action demand letter by law?
Strictly speaking, no – the law does not require it. However, if you do not send it, you will lose reimbursement of your attorney’s and court costs, even if you would otherwise be entitled to it. In practice, it is therefore effectively mandatory. Experts from our Prague-based law firm can help you formulate the letter correctly so that it has maximum impact.

2. What is the optimal deadline in a pre-action demand letter?
The minimum is 7 days, but in practice 14 to 30 days is recommended depending on how urgent the situation is. A longer deadline gives the debtor an opportunity, but also signals that you are serious and that you have time to resolve the matter. A deadline that is too short may come across as a rushed threat.

3. Can I send the letter by email?
Yes, but we recommend also sending it by registered mail with proof of delivery. In court proceedings, it is then easier to prove that the debtor received the letter. Email alone may not always be sufficient proof of service.

Filing a lawsuit – when to go to court

If the debtor does not respond to the letter, court proceedings are next. You essentially have two options: a standard lawsuit or an electronic payment order (EPO), which is usually a faster procedure.

An electronic payment order is ideal for straightforward monetary debts where it is clear that the debtor truly owes the money (you have an invoice, a contract, everything is in order). The court can issue it within a few days up to a maximum of one month, without an oral hearing. The debtor has 15 days to file an objection.

If no objection is filed in time, the order becomes enforceable and you can initiate enforcement. An advantage of the EPO is also a lower court fee. For a monetary claim up to CZK 10,000, you pay CZK 500. Above CZK 10,000 up to CZK 1,000,000, you then pay 2.5% of the amount, with a minimum of CZK 500.

For claims above CZK 1,000,000, the fee is CZK 25,000 plus 5% of the amount exceeding CZK 1,000,000, but no more than CZK 1,000,000.

If the matter is more complex, or if the debtor challenges the EPO, the proceedings will move to a standard civil action. In that case, you should be represented by an attorney – in disputes between businesses, courts expect a higher quality of argumentation and evidence.

Enforcement – compelling performance

Once you have an enforceable decision (a payment order or a final judgment), you can initiate enforcement proceedings. As of 1 January 2026, the Enforcement Code will be significantly simplified and accelerated, especially with regard to wage garnishments.

The court enforcement officer can now exchange information more efficiently with the wage payer, which means the money flows more smoothly. The enforcement officer also has more options to track down the debtor.

Other options available to the enforcement officer include freezing a bank account (attachment of a claim from an account), sale of movable assets, creation of a judicial lien over real estate, and blocking business income.

In many cases, the creditor and the debtor can sit down at the negotiating table even during enforcement proceedings and agree on instalments. Even during enforcement, it is possible to conclude an instalment agreement, which often leads to faster repayment than waiting additional months for the outcome of the enforcement.

Ancillary claims (accessories) of the receivable

When you are collecting a receivable, it is not only about the original amount (the principal). You may also claim its accessories, i.e., ancillary claims related to the debt.

Default interest

If the debtor fails to pay on time, default interest starts accruing from the first day of delay. In the first half of 2026, the rate is 11.50% per annum (the Czech National Bank repo rate of 3.50% + 8 percentage points under Government Regulation No. 351/2013 Coll.).

Example: The debtor owes CZK 100,000 due on 1 March 2026. They pay only on 20 April. Default interest for 50 days is approximately CZK 1,576. This interest arises by operation of law even if it was not expressly stated in the contract or on the invoice.

However, if you want to agree on higher interest, it must be expressly agreed in a written contract.

Contractual penalties

If you agreed with the debtor on a contractual penalty (e.g., 0.5% of the outstanding amount for each day of delay), you can enforce it as part of the receivable. The court may reduce it only at the debtor’s request if it considers it unreasonably high.

It is important to state clearly in the contract whether the contractual penalty replaces the right to damages (in which case damages cannot be claimed in addition), or whether it does not affect the right to damages. In that case, you can claim both the contractual penalty and damages.

Collection costs

The creditor (you) may also claim reimbursement of legal representation costs (lawyer/attorney fees), enforcement costs (the enforcement officer’s fee), and a lump-sum reimbursement of costs. Since 2013, it has been possible to recover a fixed amount of CZK 1,200 for administrative collection costs (record-keeping, reminders, etc.).

Our attorneys in Prague will advise you on how to properly assert all of these claims in court and what evidence to prepare.

Related questions on ancillary claims (accessories) of the receivable

1. Do I have to expressly agree on default interest in the contract?
No. Statutory interest arises by operation of law even if you do not agree on it. However, if you want higher interest (e.g., 15% per annum instead of 11.50%), you must expressly agree on it in a written contract. Note: an individually agreed interest rate must not be an artificial attempt at usury (it cannot be absurdly high; the court may then reduce it).

2. Can I claim the CZK 1,200 lump-sum reimbursement automatically?
If you do not claim it, the court will not award it on its own initiative. You must actively assert it in the statement of claim or in legal communication with the debtor. It arises already at the moment the debtor falls into default, so you can claim it retroactively as well.

3. What is the difference between a contractual penalty and damages?
A contractual penalty is lump-sum – you do not need to prove actual damage; a breach of a contractual obligation is sufficient. You must prove damages (e.g., loss of profit, reputational harm, additional legal costs). You must clarify this in the contract: either the contractual penalty is in lieu of damages, or it is in addition to them, or you do not agree on a contractual penalty at all and then only damages apply.

How to secure a receivable so that collection is effective

The best court case is the one that never happens – that’s what we say. That is why it is important to put safeguards in place in advance so that collection ideally does not have to happen at all, or so that the process is as fast as possible.

Contractual tools that will help you

If the debtor takes you seriously and has something to lose, they are much more willing to pay. Various contractual security instruments for receivables help with this.

A contractual penalty, as we have already mentioned, gives the debtor an economic reason to pay.

Retention of title means that if you supply goods, you should agree that the goods remain yours until they are paid for. This is a very strong form of security because the debtor cannot resell the goods without the risk of a dispute.

Pledge: if possible, take collateral (for example, over the debtor’s equipment, vehicle, movable assets). Then you have the right to enforce against the pledged asset if they do not pay.

An arbitration clause, especially between businesses, is a very effective tool. If you agree in a purchase or supply contract that any dispute will be resolved by an arbitrator (rather than a court), the dispute will be resolved much faster and privately, without media attention.

Arbitrators are often industry experts, so they understand the matter better than a general court judge.

A notarial deed with consent to enforceability: especially if the debtor takes something “on their word”, it is sensible to obtain a notarial deed. It may include express consent to direct enforceability, meaning you do not have to wait for court proceedings – it is sufficient to file a motion for enforcement based on the notarial deed.

The enforcement officer will then act on the basis of this deed.

Factoring – new rules for the assignment of receivables in 2026

From 1 January 2026, new rules for the assignment of receivables apply. In practice, this means you can sell your receivable to a factoring company or other entities, which will then collect it themselves.

Advantage: You get the money immediately (minus the factoring company’s fee) and do not have to deal with collection. Disadvantage: You lose part of the amount in fees. This option is particularly suitable for smaller companies that have dozens of unpaid invoices and do not want to deal with court proceedings.

However, it is necessary to take into account the new conditions effective from 1 January 2026 for the assignment of receivables, which may affect transactions with factoring companies. Specifically, the consideration for the assignment of a receivable must be at least equal to the principal at the time of assignment, and the payment must be made cashless to a bank account. 

Failure to comply with these conditions may affect the validity of the assignment. Our attorneys in Prague will help you assess whether factoring is suitable for your situation and, if applicable, will prepare the receivables assignment agreement correctly.

Practical risks and mistakes to avoid

Debt collection is full of pitfalls. Let’s look at the most common mistakes businesses make:

Potential issues

How ARROWS helps (office@arws.cz)

Missing or incomplete evidence – you only have a verbal agreement or fragmented emails without a clear chronology. The court may not accept your evidence, because a higher standard of proof is expected between businesses.

Review of your contracts and correspondence; we will prepare a list of evidence and, if necessary, request missing documents; advice on how to strengthen the existing evidence.

Limitation of the claim – you forget to enforce it, time passes, and after 3 years from the due date the claim becomes time-barred (objectively then after 10 years). You lose the right to assert it.

Timely initiation of pre-action communication and legal steps; proposal to conclude a debt acknowledgement agreement, which will extend the limitation period to 10 years; recording the claim in our system.

Failure to pay the court fee or late payment – the court will discontinue the proceedings and you will have to do everything again.

Advice on calculating the correct amount of the fee; timely filing and payment; if needed, assistance with an application for exemption from the fee.

Incorrectly drafted statement of claim – the wording is vague, essential information is missing, the claim does not contain a clear request. The court will ask you to supplement it and the proceedings will be prolonged.

High-quality legal drafting of the statement of claim, checking all formal requirements; filing a form-based claim for smaller amounts to reduce the fee; ensuring it is clear and substantively correct.

The debtor is in insolvency proceedings or on the brink of insolvency – your claim is shared among creditors, and you receive only a fraction.

Checking the debtor in the Czech Insolvency Register; timely filing of a claim in insolvency proceedings as a creditor; advice on securing priority status (e.g., secured claims or claims that have statutory priority).

Specifics of B2B debt recovery

When you recover a debt from another business (B2B), it is simpler in many respects, but at the same time greater professionalism is expected from you.

Advantages of B2B debt recovery

Businesses cannot rely on so-called consumer excuses – for example, that they did not know the terms and conditions or that the contract was disadvantageous. Courts treat them as "equal players" and expect that they clarified matters properly.

You can agree on arbitration instead of standard court proceedings. It is faster and more discreet.

Less protection for the weaker party means that if you have clear evidence, the court will accommodate you without major complications.

Disadvantages of B2B debt recovery

A higher standard of evidence is also expected from you. If you only have an email without details, it may not be considered sufficient evidence. You need an invoice, contract, order, handover protocol – something to support it.

In some cases, a business is entitled to a longer payment term (in practice 60 to 90 days, if agreed), which means you wait longer.

Related questions on B2B debt recovery

1. Can we agree on a payment term longer than 60 days between businesses?
Yes, if it is not "grossly unfair". In some sectors (healthcare, construction), periods of 100+ days are common. However, you must agree on it expressly, and gross unfairness is harder to prove against another business than against a consumer.

2. Is a standard email with details enough to document the claim?
In B2B relationships, a higher standard is expected from you. A written contract with clearly defined terms, invoice numbers and due dates is better. An email is better than nothing, but if a dispute arises, the court may accept it only as supplementary evidence.

3. Is an arbitration clause between businesses really better?
Yes. The proceedings are private, faster, and there is no media interest. Arbitrators are often practitioners in the field. The only condition is that the arbitration clause must be in writing and must specifically determine who the arbitrator will be (or how they will be appointed).

New options and changes

The year 2026 brought several legislative changes that may work in your favour:

Digitalisation of wage garnishments and faster enforcement

As of 1 January, a new system is used to record enforcement wage deductions. Instead of paper correspondence between the enforcement officer and the employer, everything runs digitally.

In practice, this means that when the court issues an enforcement order for wage deductions (for example, deducting CZK 2,000 per month from the debtor), communication between the enforcement officer and the employer takes days, not weeks. The employer is notified through the system, knows the order of enforcement actions, and regularly remits the amounts.

Support for restructuring and amendment to the Czech Insolvency Act

If your debtor is a business in temporary difficulties, there is now a legal procedure of preventive restructuring. This means the debtor can approach the insolvency court with a plan on how to get out of the situation (e.g., gradual repayment, adjustment of interest, etc.) without formal insolvency proceedings.

For you, this means: If the debtor comes with a restructuring plan, you have a chance to agree what will be repaid to you, possibly with a certain priority. This is better than waiting until they enter formal insolvency, where everything is defined by law and subordinated creditors receive only what is left.

The shortening of debt relief from five years to three years, effective from 1 July 2024, also means that if the debtor files for personal bankruptcy, they can get out of debt sooner – which motivates them to reach an agreement with creditors in time.

Assignment of receivables – new legal regulation

The new legal regulation effective from 1 January 2026 introduces specific conditions for the assignment of receivables that must be taken into account. In practice, this concerns invoicing services and factoring. If you have an unpaid invoice, you can sell it to a factoring company, which will recover it itself for a lower amount, but your problem is resolved immediately.

The conditions are clear: The consideration for the assignment must be at least equal to the principal at the time of the assignment, and payment must be made cashless to a bank account. Failure to meet these conditions may cause the assignment to be invalid or challengeable.

Attorneys from our Prague-based law firm will advise you on whether factoring is suitable for you and how to properly negotiate an assignment agreement under the new legal regulation.

Final summary

Debt recovery in 2026 is more efficient than ever before – there are new digital tools, accelerated processes, and more options to secure your money. At the same time, however, this area is more complex and requires greater attention to detail.

If you do not want to make these mistakes and prefer a safe procedure that leads to recovering your money, contact the attorneys from our Prague-based law firm. They specialise in recovery between businesses and know all the ins and outs of the current Czech legal system.

Write to us at office@arws.cz – we will advise you on the best course of action in your company’s specific situation.

FAQ - Most common questions on debt recovery in 2026

1. How long does it take to recover a debt from filing a lawsuit?
There is no universal timeframe—it depends on the court and its workload. An electronic payment order may be issued within days to a month, while standard proceedings take months to years. Enforcement may then take additional months, and longer if the matter becomes complicated. On average, you should expect six months to two years from filing the claim to actual recovery of the money, if the debtor is willing to cooperate. Consult our attorneys in Prague at office@arws.cz on what timeframe can be expected in a specific case.

2. Can I recover a debt myself without a lawyer?
Theoretically yes—the court does not force you to have legal representation. In practice, however, it is riskier. Between businesses, a higher standard of argumentation is expected; the court will notice errors in the claim and require you to correct them. Without a lawyer, you risk the court dismissing your claim due to formalities, or not awarding you reimbursement of legal costs even if you win. Our Prague-based law firm will represent you and help secure a successful outcome.

3. What if the debtor claims they sent the money, but I did not receive it?
Then it becomes a dispute about the facts. The debtor must prove they sent it (e.g., with a bank statement showing your IBAN), and you must prove you did not receive it (or that you returned it). The court assesses the evidence from both sides. If it is unclear, the court may request evidence from the bank. The key is to have clear terms in the contract: “Performance shall be deemed completed only upon crediting to the creditor’s account.” Our attorneys in Prague can help you defend your position.

4. If the debtor is in insolvency, am I lost?
No, but it is more complicated. You must file your claim in the insolvency proceedings and notify your receivable. You will then be paid according to priority (a secured claim has priority; some claims have statutory priority—e.g., wage claims). At a minimum, you will be included in the process and have a chance to recover at least part of the amount. Our Prague-based law firm will advise you on how to file in insolvency and how to defend your priority.

5. What if I sent an invoice, but the debtor never responded to it?
Then the limitation period starts running. You have 3 years from the invoice due date. In the first year, it is worth sending a pre-action demand and a reminder. If that still does not help and you are sure the debtor owes the amount, file a lawsuit or apply for an electronic payment order. If you do nothing, after 3 years the claim will be time-barred and the court will no longer uphold it if the debtor invokes the limitation. Our attorneys in Prague will alert you to an approaching limitation deadline and prepare the claim in time.

6. What is the difference between enforcement by a bailiff and court enforcement of a decision?
Enforcement is carried out by a court bailiff—who actively searches for the debtor’s assets and can use multiple methods at the same time (wage garnishment, account freezing, sale of assets). Court enforcement of a decision is carried out by the court—there you must specify yourself which assets you want to target, and the court carries out only one method at a time. Bailiff enforcement is more effective. We always recommend choosing the route via a court bailiff, which we will arrange as our Prague-based law firm.

Notice: The information contained in this article is of a general informational nature only and is intended for basic guidance on the topic based on the legal situation as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client security we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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