CLAIM ADMINISTRATORS AND HOLDERS, CREDITORS

Certainty in managing your receivables

ARROWS lawyers know that unpaid receivables can be a source of considerable chaos, wasted time, and a threat to trust in your business relationships for any company. Receivables that are long overdue pose a serious threat to cash flow and the overall financial health of a business. As time passes, it becomes even more difficult to collect them, as evidenced by the fact that 25% of unpaid receivables can lead to insolvency.

(part of the ARROWS team in the photo)

At ARROWS, we provide comprehensive legal support to creditors and debt owners, whether in individual cases or in the large-scale management of entire portfolios. We handle the entire debt collection process – from the initial legal review of the portfolio, through the detailed setting of the collection strategy, to effective contact with debtors and subsequent judicial enforcement. The aim is to recover our clients' funds and protect their financial stability.

Effective debt management is key to maintaining healthy cash flow and protecting a company's reputation. Problems with unpaid invoices often escalate if they are not addressed proactively and with professional care. When companies rely solely on their own internal reminders, they often find that these tools cease to be effective, especially in times of economic hardship.

This leads to the financial difficulties of business partners being transferred to previously stable companies. Engaging qualified legal assistance is therefore not just about reactively solving existing problems, but above all about proactively preventing financial crises. A professional legal partner helps companies avoid the critical point where ineffective or delayed enforcement threatens the very existence of the business.

A professional approach to debt collection also prioritizes maintaining good business relationships and protecting the brand. ARROWS experts strive first and foremost for amicable out-of-court settlements, as a fair agreement is often strategically more advantageous than lengthy and costly litigation. Aggressive and unprofessional collection methods, sometimes used by less regulated collection agencies, can irreparably damage valuable business relationships and lead to significant loss of trust and reputational risk.

Who can you turn to?

A law firm with an ethical approach, on the other hand, ensures that the enforcement process is conducted with respect for both parties, which maintains the brand image and protects the client's long-term business interests. This makes legal support a tool for maintaining the integrity and credibility of the company in the market.

What ARROWS law firm most often does for companies in this area

ARROWS law firm provides clients with a comprehensive range of services in the area of debt management and collection, which are key to maintaining financial stability and minimizing risks. ARROWS lawyers regularly deal with these issues in practice and provide support that goes beyond mere debt collection and focuses on building resilient corporate systems.

Overview of typical situations and areas requested by clients:

Comprehensive legal support from A to Z:

We handle the entire collection process – from legal review of the debtor (portfolio) and setting up a collection strategy (out-of-court negotiations, payment schedules, participation in court proceedings, insolvency proposals, or public auctions) to effective contact with debtors, judicial collection, and enforcement.

Bulk debt management:

For institutional creditors, we offer bulk debt management with immediate initiation of the collection process. This includes ongoing reporting and an overview of each step, tailored to your needs, so that you always have a perfect overview of the collection process. ARROWS has the know-how and technological background to effectively manage large volumes of receivables.

Legal review and due diligence:

We review your receivables, perform due diligence on receivables for sale, assess their collection potential and risks, and ensure the correct pricing of the portfolio. This service is key to secure and profitable receivables trading, minimizing future risks.

Securing and confirming debts:

We provide advice and prepare contractual security arrangements such as guarantees, liens, and settlement agreements. These proactive steps are essential to minimize future losses and ensure a higher level of satisfaction in the event of problems.

Drafting and revising contracts and guidelines:

We draft and revise commercial contracts, such as purchase agreements, contracts for work, and lease agreements, with an emphasis on clear payment terms, mechanisms for resolving delays, and contractual penalties.

An important part of this is also setting up internal guidelines for credit and receivables management (credit management policy), which define the rules for the entire sales process, from business prospecting, through the creation of offers and opening customer accounts, to setting payment terms and invoicing. These guidelines are designed to minimize business risk and prevent disputes.

Problem solving and dispute resolution:

We represent clients in court and arbitration proceedings, conduct out-of-court negotiations and mediation with the aim of reaching an amicable solution. The priority is always to resolve the situation efficiently and quickly, while maintaining business relationships where possible.

Registry and authority matters:

We ensure correct entries and deletions in the relevant registries and handle all communication with authorities in the context of debt collection and enforcement. This includes navigating complex administrative processes that are often a source of time loss and chaos for companies.

Company guidelines and internal process optimization:

We help set up and implement internal processes and guidelines that ensure compliance with legal regulations and optimize cash flow. This includes optimizing dunning processes, automating invoicing and communication with debtors to reduce time losses and increase overall efficiency. Investing in these preventive measures leads to a significant reduction in future disputes and problems.

Tax efficiency:

We provide advice on tax optimization related to receivables, including the creation of statutory provisions and write-offs of bad debts. The correct use of these tools minimizes tax impacts and maximizes the financial return on problematic assets.

If a creditor does not receive payment for its supplies or services, it may, under certain conditions, adjust the tax base. This occurs when a receivable becomes uncollectible, which is a situation defined by law – typically in cases where the debtor has gone bankrupt, died, or the amount is so small that it would simply not be worth collecting.

Who can you turn to?

Investing in proactive legal services, such as drafting and reviewing contracts and setting up internal guidelines, is directly linked to minimizing future disputes, wasted time, and chaos. Instead of reactively putting out fires, ARROWS helps clients build a solid foundation for long-term operational efficiency and predictability.

A well-designed credit and receivables management policy significantly reduces business risk by ensuring consistent processes, timely risk assessment, and clear communication of payment terms. This approach transforms legal services from a cost item into a strategic investment that brings peace of mind and a stable business environment.

Legal services in the area of receivables management also have a direct and measurable impact on a company's tax liability and overall financial results. Expert advice on tax optimization, particularly with regard to the creation of statutory provisions for doubtful and uncollectible receivables, enables companies to legally reduce their income tax base. Legal assistance therefore serves not only to recover the amount owed, but also to maximize the overall financial benefit from a problematic receivable, for example by minimizing its negative impact on taxes.

With new VAT rules for bad debts that may increase the administrative burden, strategic legal advice is becoming even more important to ensure tax efficiency and minimize penalties. This makes legal services a key part of a financial strategy that delivers tangible savings and strengthens financial balance.

The following table illustrates the key areas of support that ARROWS provides to debt managers and owners, and the specific benefits for your company:

Service Area	What ARROWS Does for You	Your Benefit
Prevention and Process Setup	Drafting and reviewing contracts, setting up internal credit and receivables management policies, optimizing dunning processes.	Reduced risk of disputes, less chaos, faster cash flow, time savings, stronger trust with partners.
Out-of-Court Debt Recovery	Active communication with debtors, negotiating installment plans, settlement agreements.	Fast resolution without going to court, protection of business relationships, reduced reputational risk.
Judicial and Enforcement Recovery	Preparing lawsuits and payment order motions, court representation, arranging enforcement proceedings.	Effective debt recovery, less time lost in litigation, peace of mind after long delays.
Bulk Portfolio Management	Comprehensive management of large volumes of receivables, ongoing reporting, strong technological support.	Full oversight, maximized recovery success, savings on internal resources.
International Recovery	Debt collection in Europe, the USA, and other regions through the ARROWS International network.	Global confidence, overcoming language and legal barriers, reduced chaos in cross-border cases.
Tax Optimization	Advisory on tax deductibility of allowances and write-offs for uncollectible receivables.	Direct tax savings, increased financial efficiency, protection from fines and administrative burden.

The 5 most common problems that ARROWS lawyers solve for clients in this area

ARROWS Law Firm has experience with unresolved receivables and insufficient legal protection, which can expose your company to significant risks and financial losses. ARROWS lawyers regularly deal with these issues in practice and help clients effectively prevent these critical situations:

Loss of cash flow and threat to the company's liquidity:

Long payment terms from customers and payment problems are one of the most common financial problems faced by companies, leading to insufficient cash flow and low liquidity. The success rate of debt collection is declining, passing the burden on to other companies.

• Real-life example: A small manufacturing company delivered goods to a large customer, but the invoice remained unpaid for months. Its own reminders were ineffective. This led to a disruption in cash flow and jeopardized the company's ability to pay its own suppliers and employees, causing considerable chaos in operations.

Who can you turn to?

Litigation and enforcement – wasted time and high costs:

Debt collection is time-consuming and requires specific legal knowledge. Court proceedings are often lengthy and involve the risk of high legal costs. Furthermore, even a final court decision does not automatically mean payment; enforcement proceedings must be continued.

• Case study: A client attempted to collect a debt on their own, but the debtor filed an objection to the payment order. The subsequent court proceedings were protracted, resulting in an enormous loss of time for management and unexpected legal costs, which only exacerbated the problematic financial situation.

Statute of limitations on claims and risk of loss of entitlement:

The general limitation period is three years, and if the creditor does not act in time, they may lose their claim.

• Real-life example: Company X forgot about an older, smaller claim. When it attempted to collect it after four years, the debtor successfully raised a statute of limitations defense, resulting in the complete loss of the entire amount and wasted costs incurred in attempting to collect it.

Complications with the debtor's insolvency and low success rate of satisfaction:

The bankruptcy, liquidation, or insolvency of the debtor may lead to the complete loss of the creditor's claim. The enforcement of claims in insolvency proceedings is subject to specific rules that require detailed knowledge of insolvency law.

• Real-life example: A client had a large claim against a business partner who suddenly became insolvent. Without quick and correct registration of the claim in the insolvency proceedings and active representation, there was a risk of complete loss of the investment and insufficient satisfaction.

Reputational risk and damage to business relationships:

Aggressive or unprofessional debt collection can damage your company's reputation and disrupt valuable business relationships, leading to a loss of trust.

• Case study: A company tried to collect a debt internally through repeated, insensitive phone calls and emails. This led to the debtor, despite having the potential to pay, feeling harassed and spreading negative references about the company, which damaged its reputation in the industry and led to a future loss of trust among other potential partners.

Problems with unpaid receivables often manifest themselves not only in financial instability, but also in hidden costs and a significant emotional burden on company management. Research shows that the most common problems faced by companies include overload, exhaustion, and even burnout among owners and key employees, which is closely linked to cash flow and invoice payment issues.

Attempts at internal debt collection without the necessary legal knowledge and experience consume a huge amount of time and energy that could be devoted to the strategic development of the business. This diversion of attention from key business activities represents a significant economic loss that exceeds the amount of the debt itself. ARROWS helps eliminate this problem and wasted time, allowing company management to focus on what they do best – growing their business and regaining peace of mind.

(photo: ARROWS law firm team)

The complexity of international debt collection is another significant source of increased problems. There are no uniform international laws for debt collection; the national rules of the debtor's country always apply. This means that in-depth knowledge of local jurisdictions and languages is essential for successful debt collection abroad. Added to this are complications associated with separate legal entities and limited liability, which can make it difficult to identify the actual assets available to satisfy the claim.

These factors lead to higher costs, longer resolution times, and lower success rates for companies attempting cross-border enforcement internally. That is why specialization and a network such as ARROWS International, which can effectively address these challenges and minimize the risks and concerns associated with international disputes, are crucial.

The following table summarizes the biggest risks facing companies in the area of debt collection and how ARROWS helps them address these risks:

Problem/Risk	Impact on Your Business	How ARROWS Helps
Loss of Cash Flow and Liquidity	Financial instability, operational risk, inability to meet obligations.	Effective out-of-court negotiations and swift legal action, optimization of dunning processes.
Litigation and Enforcement	Major time drain for management, high legal costs, delayed payment recovery.	Expert representation in court and enforcement proceedings, minimizing delays and expenses.
Statute of Limitations Expiry	Total loss of receivables, wasted costs on recovery attempts.	Proactive monitoring of limitation periods, timely legal action, and interruption of the limitation term.
Debtor Insolvency Issues	Low recovery chances, complete loss of investment.	Professional representation in insolvency proceedings, timely and correct filing of claims.
Reputational Risk	Brand damage, loss of trust among business partners, negative references.	Professional and discreet approach to recovery, focus on amicable solutions.

Descriptions of situations, practical examples, and expert explanations

Out-of-court negotiations: The first step toward a solution with minimal risk

ARROWS Law Firm has experience showing that out-of-court negotiations are often the fastest and most effective way to collect a debt while protecting your business relationships and reputation. Our lawyers actively communicate with debtors, identify the reasons for non-payment, and seek the best possible amicable solution. This approach is key to maintaining trust and minimizing reputational risk, as we strive to avoid unnecessary confrontations that could damage mutual relationships in the long term.

Practical examples:

Case 1: Saving a business relationship

A large manufacturing company, our client, was struggling with an unpaid invoice from a key supplier. Aggressive collection in this case would have destroyed a long-standing and valuable partnership. ARROWS' lawyers initiated diplomatic but firm negotiations, which revealed the debtor's temporary financial difficulties. The result was an agreement on a payment schedule that ensured the repayment of the entire debt while preserving a valuable business relationship. This approach demonstrates how financial recovery can be achieved while strengthening business partnerships.

Case 2: Quick solution without court proceedings

A medium-sized IT company had a receivable from a customer who had stopped communicating. ARROWS sent a structured pre-litigation letter and initiated intensive communication. Thanks to the third-party effect and our professional approach, we managed to restart communication and reach an amicable solution and payment of the receivable without having to go to court. This prevented a significant loss of time and additional costs associated with court proceedings, delivering a quick and effective result for the client.

Transparency and a data-driven approach to out-of-court debt collection represent a significant competitive advantage. ARROWS provides ongoing reporting and an overview of each step, tailored to the specific needs of the client, so that they always have a complete overview of the recovery process. This data-driven strategy, complemented by regular and customized reports, effectively mitigates the confusion and potential loss of trust that are often associated with less transparent legal processes.

Providing full visibility and control over the process actively builds trust and enables clients to make informed decisions based on up-to-date information. This sets ARROWS apart as a modern, sophisticated, and responsible partner offering a managed solution in line with current business expectations, resulting in greater peace of mind for the client.

Judicial enforcement and execution: When decisive action is needed

If out-of-court proceedings fail, ARROWS lawyers are ready to initiate legal proceedings. We handle the entire process, from preparing the statement of claim with a precise claim, to filing a motion for a payment order (including electronically), to representation in court. The aim is to obtain a final and enforceable decision, which forms the basis for further steps.

Expert explanation: Payment order and opposition

The court may issue a payment order even without an explicit request from the plaintiff if the legal conditions are met. If the payment order is duly delivered and no objection is filed within 15 days, it has the effect of a final judgment. However, it is important to know that even an unjustified objection is capable of revoking the payment order and leads to the ordering of proceedings.

ARROWS lawyers have deep insight into court practice and know the specifics of the proceedings to minimize time loss and maximize success. In addition, the court fee for an electronic payment order is lower (4% of the amount claimed) than for a regular lawsuit, which is a financial advantage for the client.

Enforcement: The final step to recovery

A final court decision does not automatically mean that the amount owed will be paid. In this regard, it is necessary to continue to enforce the claim through judicial enforcement or execution. This is followed by enforcement proceedings, where ARROWS prepares proposals for enforcement and represents you throughout the process.

This includes the use of various methods of enforcement, such as deductions from the debtor's salary, assignment of the debtor's claim, administration of real estate, sale of movable and immovable property, seizure of business assets, or establishment of a lien on real estate.

Insolvency proceedings: Protecting your rights in the event of a debtor's bankruptcy

ARROWS lawyers know that insolvency proceedings are a complex process where it is crucial to act quickly and correctly. We help clients enforce their claims in insolvency proceedings, including timely and correct filing of claims, representation in reorganization or bankruptcy proceedings, and securing the highest possible satisfaction. The Insolvency Act regulates the procedures for enforcing claims, and detailed knowledge of this Act is essential for protecting the rights of creditors.

Case study: Securing a claim in international insolvency

ARROWS Law Firm has experience in resolving client issues in this area both within and outside the EU. The client, a European engineering company, had a significant claim against a Georgian customer who had gone bankrupt. Thanks to our ARROWS International network and in-depth knowledge of local law, we ensured that the claim was filed in a timely manner and actively represented the client in the local insolvency proceedings, which led to partial satisfaction that would not have been possible without our international expertise.

This example highlights our international reach and detailed expertise, demonstrating that ARROWS lawyers are insiders when it comes to resolving complex cross-border cases.

Who can you turn to?

The importance of prevention: Drafting and reviewing contracts, company guidelines, and compliance

Prevention is always the best protection. ARROWS lawyers focus on proactive measures that minimize future disputes and ensure long-term stability.

Contract law: We draft and review purchase, lease, and other commercial contracts with an emphasis on clear payment terms, contractual penalties, and securing obligations. A properly drafted contract is the foundation for a harmonious contractual relationship and reduces the possibility of misunderstandings and disputes by defining the rights and obligations of all parties in advance.

Company guidelines and compliance: We help set up internal processes and guidelines for credit and receivables management (credit management policy) that define the rules for the entire sales process, from prospecting to invoicing. This includes customer creditworthiness assessment, setting payment terms and guarantees.

Effective compliance solutions help companies design and implement practical and cost-effective solutions for managing compliance risks, including whistleblowing and GDPR. A functional compliance program can even lead to exemption from criminal liability for legal entities, which is an increasingly relevant topic for companies.

Optimization of dunning processes: We use modern methods and artificial intelligence (AI) to optimize dunning processes – automated reminders, personalized communication, and flexible payment options. This reduces time usage, minimizes bad debts, and optimizes cash flow. ARROWS lawyers deal with these issues on a daily basis and ensure that these processes comply with legal regulations, including specific rules for B2B debt collection, which differ from those for consumers.

International presence: ARROWS International – your global security

Thanks to the ARROWS International network, which has been built up over ten years, we collect debts not only in the Czech Republic but also internationally. Whether in Europe, the US or another region, we will take the legal steps necessary to successfully collect the amount owed. Our experience covers more than 130 countries, enabling us to provide comprehensive services on a global scale.

Expert insight into international challenges

It is important to realize that there are no uniform international laws for debt collection and that the national rules of the debtor's country always apply. This places enormous demands on knowledge of local jurisdictions, languages, and cultures. Without this in-depth knowledge, international debt collection would be a source of enormous potential failure. ARROWS lawyers are insiders in these complex international waters, ensuring effective solutions even in the most complicated cross-border cases.

Case study: Debt collection in Saudi Arabia

The client, a Ukrainian software company, had an outstanding debt from a Saudi Arabian real estate company. After unsuccessful internal communication, ARROWS lawyers took over the case. Thanks to our global network and the involvement of an Arabic-speaking expert, we were able to establish communication and, after intensive negotiations, reach an agreement and recover the entire amount. This case clearly demonstrates how our international expertise and ability to overcome cultural and language barriers lead to successful results where internal efforts would have failed.

ARROWS: A modern company with AI and experience for your peace of mind

Our portfolio includes more than 150 joint-stock companies, 250 limited liability companies, and 51 municipalities and regions. Our experience in providing long-term services to our clients is a guarantee of trust and efficiency for you. ARROWS works primarily for entrepreneurs and is a modern company that uses artificial intelligence and modern methods for its clients.

Use of artificial intelligence (AI) and modern methods:

AI helps us automate routine tasks such as e-discovery, legal research, and due diligence. This increases our productivity and allows us to focus on strategic consulting and building relationships with clients. AI also helps predict case outcomes and manage documents more efficiently. The integration of AI into legal processes is not a replacement for human expertise, but rather an enhancement of it. AI frees lawyers from administrative burdens, allowing them to devote more time and attention to strategic thinking and solving complex problems. This translates into faster case resolution, more accurate analysis, and overall more client-focused services.

Expert insight: AI in law

Did you know that 76% of legal departments use generative AI at least once a week? And that 73% of companies use cloud solutions for document and case management? ARROWS is at the forefront of these trends, which means your cases are handled with maximum efficiency and the most advanced tools. This technological foresight allows us to provide a competitive advantage that gives you the confidence that your legal matters are in the hands of an innovative and efficient partner.

Regain your peace of mind: Contact ARROWS today

Don't let yourself be robbed of time and money. Debt collection problems can cost your business much more than just the amount owed – they lead to losses, financial instability, and damage to trust and reputation. These hidden costs and emotional burdens can distract you from key business activities and hinder growth.

ARROWS lawyers deal with these issues on a daily basis and are ready to help you. With 20 years of experience in B2B law, deep insight into Czech and international legislation, and the use of state-of-the-art technologies, including artificial intelligence, we will provide you with an effective and discreet solution. Our goal is to restore your peace of mind and financial stability.

Whether you need to collect individual debts, manage a large portfolio, or set up preventive measures to minimize future risks, ARROWS is your reliable partner. The ultimate benefit of our services is your satisfaction, which comes from knowing that your debts are in professional hands and your business is protected from unexpected problems.

It's time to act. Don't let your receivables become uncollectible and jeopardize your business. Contact us today for a no-obligation consultation. We will discuss your situation, evaluate your options, and propose a strategy tailored to your needs.

Fill out our contact form, call us at +420 245 007 740, or write to us at office@arws.cz.

Thanks to our partner companies, we provide comprehensive services under one roof, saving you time and ensuring synergy between legal, tax, and other expert services for maximum efficiency. The trust placed in us by more than 2,000 clients, including 150 joint-stock companies, 250 limited liability companies, and 51 municipalities and regions, as well as the Law Firm of the Year 2024 award, are proof of our reliability and ability to deliver results. These references and many years of experience are a strong signal of trust for anyone looking for a stable and proven legal partner.

Don't want to deal with this problem on your own? More than 2,000 clients trust ARROWS Law Firm, and we have been named Law Firm of the Year 2024. Take a look at our references HERE, and we will be honored to help you solve your problem. The inquiry is free of charge.