Non-payment for services rendered, an unpaid deposit for renting premises, or an unpaid loan – these are just some of the problematic in Poland, where debt recovery in Poland often requires professional legal assistance. Although the problem of debtors failing to pay or paying late is quite common, Polish debt recovery procedures provide a number of effective tools that allow creditors to successfully pursue their claims.
The creditor may take pre-trial action by sending a payment request to the debtor or entering into negotiations, or may take court action by filing a claim for payment in one of the modes provided for in the Polish Code of Civil Procedure (writ of payment proceedings, order for payment proceedings, ‘ordinary’ proceedings). Then, after obtaining a final court ruling, it is possible to initiate bailiff (pl. “komornik”) enforcement, which in many cases leads to the effective recovery of funds by the bailiff.
It is worth remembering that a properly planned debt recovery strategy in Poland, the selection of the appropriate Polish legal procedure and the prompt taking of legal steps will significantly increase the effectiveness of the entire process and facilitate the recovery of funds as quickly as possible.
In this publication, we have attempted to provide a practical description of the various legal options available to creditors under the Polish legal system to effectively enforce their claims against debtors.
Stage 1 – sending a payment request to the debtor in Poland (pre-court stage)
A payment request is the first, basic step in the the Polish debt recovery proces. Sending a payment request to the debtor not only gives them a chance to settle the debt voluntarily, but also proves that the creditor is acting in a professional, orderly manner and in accordance with applicable regulations and procedures. Our experience shows that in many cases, a properly prepared demand for payment will have such a strong effect that it will avoid the need to refer the case to a Polish court.
What should an effective demand for payment contain?
First and foremost, an effective demand for payment should be as specific, precise and factual as possible. The main purpose of the document is not only to inform the debtor of the existence of the arrears, but also to set a time frame for the settlement of the debt and the consequences for the debtor in the event of non-payment.
A correctly prepared payment request in Poland should therefore contain the following elements:
- the details of the parties, i.e. the name and surname (company name) of the creditor and debtor, their addresses and, if applicable, their tax identification numbers (NIP) or National Court Register numbers (KRS) for identification purposes;
- the legal basis for the claim, i.e. the creditor should indicate and describe the basis on which the debtor’s obligation arose, e.g. invoice, lease agreement, loan agreement;
- the amount of the debt, i.e. the creditor should calculate the exact principal amount of the debt, as well as the amount of statutory or contractual interest accrued up to the date of the demand,
- the payment deadline, i.e. the date by which the debtor should settle the amount claimed in the demand, for example 7 or 14 days from the date of delivery of the demand,
- the creditor’s bank account number to which the debtor should return the amount,
- the legal consequences of non-payment, i.e. a precise announcement of further legal steps, usually referring the case to court proceedings,
- the signature of the creditor or the creditor’s representative (in our experience, when a law firm is involved, the signature of a solicitor reinforces the seriousness of the letter and often increases the effectiveness of the demand).
It also seems that the language used in the demand should be professional and factual, firm on the one hand, but on the other hand non-aggressive, devoid of emotion or a desire for confrontation. Such wording may hinder further negotiations with the debtor.
Should the demand for payment be sent by registered letter or e-mail?
Polish law does not impose any specific form requirements for payment reminders. However, in practice and for evidentiary purposes, two forms are most commonly used:
- registered letter with confirmation of receipt (or confirmation of posting) – the safest form due to the ease of proving that the demand was sent and reached the addressee,
- e-mail – nowadays increasingly recognised as an effective means of delivery, especially in relations between businesses that communicate electronically on a daily basis. In such cases, the creditor should retain confirmation of the message being sent and the content of the correspondence.
What payment deadline should be specified in the payment request?
The content of the payment request should specify a specific payment deadline which, on the one hand, will give the debtor a realistic opportunity to settle the debt, but on the other hand, will not be too distant. In practice, for example, a deadline of a few hours from the moment of receipt of the request may be too short, while a deadline of 7-14 days from the date of delivery of the letter seems to be optimal.
What other wording should be included in a payment reminder?
The creditor should definitely use wording that emphasises the legal consequences of non-payment, for example: ‘If payment is not made within 7 days of receipt of this demand, the matter will be referred to court without further notice.’
A practical example from Polish case law:
“A pre-court demand for payment precedes the filing of a lawsuit in court. It may be sent to the debtor if a simple demand has not produced the expected result and the debtor has not paid the amount due within the specified time limit. It should be sent by registered letter with acknowledgement of receipt. The creditor is required to send a payment request to the debtor if the creditor has not set a deadline for the debtor to pay the amount due. The demand for payment itself is not a prerequisite for filing a lawsuit. A lawsuit may be filed even if there was no pre-trial demand for payment, but this does not mean that this issue is irrelevant in court proceedings. A lawsuit is treated as a ‘last resort’ (judgment of the Polish Regional Court in Płock of 26 June 2019, file ref. no. IV Ca 127/19).
Negotiations instead of a lawsuit – what can a creditor do after sending a demand for payment?
In Poland sending a payment request to a debtor does not always have to end with filing a lawsuit. In many cases, a payment request is a starting point for negotiations with the debtor, which may lead to a quick and favourable resolution of the dispute without the need for court proceedings. For many creditors, this will be a cheaper, faster and less risky alternative to civil proceedings.
Practice shows that receiving a payment request is often the first moment when the debtor actually begins to realise the real consequences (including financial ones) of non-payment. A payment request (especially one signed by a law firm) signals that the creditor is determined to recover the debt, while leaving open the possibility of an amicable settlement of the dispute. As a result, many debtors decide to engage in constructive dialogue and present proposals for settling their obligations. Therefore, it seems that the demand for payment should also take into account the issue of further costs that the debtor will be obliged to pay in the event of non-payment and referral of the case to court proceedings.
Why is it worth entering into negotiations after sending a payment request to the debtor?
In Poland pre-trial negotiations offer a number of advantages for both the creditor and the debtor. First of all, conducting (constructive) talks is much cheaper and faster than initiating court proceedings, which can take several months or even years. The parties may also agree on the terms of debt repayment, for example by spreading it out in instalments, partially waiving interest or modifying payment deadlines. Of course, voluntary repayment of the debt by the debtor also eliminates the risk of seizure of the debtor’s bank accounts or assets, which always involves significant costs that are borne by the debtor.
When do negotiations with the debtor make sense, and when is it worth ending them?
However, it should be remembered that pre-trial negotiations in Poland, which can be initiated after sending a payment request to the debtor, should not take too long or lead to superficial discussions. In many cases, ‘negotiations’ are only intended to mislead the creditor and delay payment. In our opinion, if the debtor avoids specifics, does not present a realistic debt repayment plan or continues to request further deferrals of payment deadlines, it is worth considering terminating the talks and immediately referring the case to court proceedings.
It should also be remembered that any negotiations may be concluded by entering into an appropriate agreement setting out the details of the repayment of the debt. Such an agreement may include a clause on voluntary submission to enforcement (pursuant to Article 777 §1(4) or (5) of the Polish Code of Civil Procedure). Thanks to this, in a situation where the debtor fails to perform the settlement, i.e. when the debtor ceases to repay the debt or interrupts instalment payments, the creditor will be able to obtain an enforcement title without the need to conduct full court proceedings. The use of this solution significantly shortens the process of recovering money, allowing for the immediate initiation of bailiff enforcement without the need to file a lawsuit and wait for a judgment of a Polish court. Of course, the declaration of voluntary submission to enforcement should be drafted in sufficient detail and precision to constitute a real possibility of enforcement through the courts. If the content of the declaration raises doubts, the court may refuse to grant it an enforcement clause, which will prevent enforcement on its basis.
Furthermore, agreements reached during negotiations between the debtor and the creditor may be considered as an admission by the debtor of the existence of the obligation and the intention to voluntarily perform the obligation. In practice, this means that any agreements regarding the amount, payment terms or partial cancellation of interest may later be used in court proceedings as evidence of acknowledgement of the debt.
A practical example from Polish case law:
“An example of improper acknowledgement of debt may also be negotiations between the creditor and the debtor, even if the debtor does not intend to make a statement acknowledging the debt. The purpose of the institution of acknowledgement of a claim is that the debtor assures the creditor that the obligation will be performed, so that the creditor does not have to fear the expiry of the limitation period for the claim, as the acknowledgement interrupts the limitation period, as a result of which the limitation period starts to run again.” (the Polish Supreme Court judgment of 11 August 2011, ref. no. I CSK 703/10)
Stage 2 – initiation of court proceedings against the debtor in Poland
In many cases in Poland, the debtor does not respond to the demand for payment, as they are not interested in reaching a settlement with the creditor. In such a situation, it seems pointless to continue sending pre-court letters – court proceedings should then be initiated.
Polish civil procedure provides for several modes of debt recovery before the court, i.e.:
- writ of payment proceedings – including electronic writ of payment proceedings (EPU) conducted by the e-court in Lublin,
- order for payment proceedings,
- ordinary civil proceedings.
Each of the above procedures has its own specific characteristics, different formal requirements and separate court costs. The choice of the appropriate procedure depends primarily on the circumstances of the case, the type of claim and the documents and evidence available to the creditor.
Warning proceedings and electronic warning proceedings according to Polish law
Warning proceedings are the most commonly chosen procedure in cases concerning payment. The court may issue a payment order in these proceedings if the content of the statement of claim and the attached documents indicate that the claim is justified. The debtor may, of course, lodge an objection to the payment order, but if they fail to do so, the payment order becomes final. Then, after the enforcement clause has been added, the order can be sent directly to the court bailiff.
Furthermore, the writ of payment proceedings may also be conducted online in the form of so-called electronic writ of payment proceedings (EPU), conducted by the only specialised court in Poland, i.e. the Polish District Court for Lublin-Zachód in Lublin, 6th Civil Division (the so-called ‘e-court’).
In this mode, the creditor is not required to present original documents or signed statements from the debtor. The claim, together with all documents, is submitted online. However, it should be remembered that electronic writ-of-payment proceedings only cover the possibility of claiming monetary benefits, and a payment order can only be issued if the defendant’s address for service is located in Poland.
This is definitely the fastest and cheapest form of pursuing monetary claims in Poland, especially in the case of simple and undisputed debts. What is more, in this mode, the court ex officio grants an enforcement clause entitling the claimant to enforce the debt. Therefore, the claimant does not have to submit an additional application to the court for the clause to be granted, as the decision to grant the enforcement clause appears in the online system after the payment order becomes final.
Initiating and conducting court proceedings under this procedure allows for a significant reduction in court and legal costs, and a payment order can be obtained within 2-3 months, provided that the claim has been correctly drafted and filed.
However, it should be borne in mind that proceedings conducted by the EPU have a fundamental disadvantage. After receiving the payment order, the defendant can easily challenge it by lodging an objection to the payment order within the prescribed time limit. This will result in the termination of the proceedings in the contested part. Filing an objection does not, of course, prevent the claim from being pursued, but the proceedings are then conducted in the normal manner, i.e. before a ‘traditional’ Polish court.
A practical example from Polish case law:
”The transfer of a case from electronic proceedings in cases specified by law to a court of general jurisdiction initiates a new, autonomous stage of proceedings” (judgment of the Polish Regional Court in Toruń of 3 December 2013, file ref. no. VIII Cz 701/13).
Summary proceedings
In turn, summary proceedings are even more effective in cases where the creditor has documents confirming the debtor’s obligation. The grounds for issuing a payment order in summary proceedings are enumerated in Article 485 § 1 of the Polish Code of Civil Procedure, according to which the court issues a payment order in summary proceedings if the facts justifying the claim are proven by the following documents attached to the statement of claim:
1) an official document;
2) an invoice accepted by the debtor;
3) a request for payment addressed to the debtor and a written statement by the debtor acknowledging the debt.
In this mode, the court may issue a payment order in summary proceedings even without conducting a hearing and summoning the parties, which significantly shortens the duration of the proceedings. In addition, the court fee is only ¼ of the standard fee, which makes this mode particularly financially advantageous for the creditor.
A payment order issued in summary proceedings also constitutes a security title, which means that the creditor may immediately apply to a bailiff to secure the debtor’s assets, e.g. by seizing a bank account or real estate.
Summary proceedings are therefore the recommended solution in cases where the creditor has strong and clear evidence of the existence of the debt. In practice, they allow for the quick obtaining of an enforcement title and the effective recovery of the debt without the need for lengthy proceedings.
A practical example from Polish case law:
“The provision of Article 485 of the Code of Civil Procedure requires the cumulative occurrence of two conditions. The first is objective in nature and relates to the pursuit of a monetary claim or a claim concerning the performance of fungible goods. The second condition is related to the requirement to prove the claim by means of the documents indicated therein in an exhaustive manner. The court’s jurisdiction in the first phase of the order for payment proceedings is limited. It boils down to determining the existence of grounds for issuing a payment order, as specified in Article 485 of the Code of Civil Procedure. However, the existence of these grounds makes the claim so plausible that the legislator imposes on the court the obligation to issue a payment order without further examination of the merits of the claim” (judgment of the Court of Appeal in Poznań of 25 August 2010, I ACa 573/10).
Ordinary civil law proceedings
Another common option is to initiate ‘ordinary’ civil proceedings under Polish law, i.e. a classic claim for payment to the court in a situation where the case is more complicated – for example, the debtor disputes the existence of the obligation, raises objections against the creditor or it is necessary to appoint a court expert.
This procedure is also used when the creditor does not have the documents necessary to obtain a payment order in summary or writ proceedings.
In a ‘normal’ payment proceedings, the court conducts a full evidentiary hearing – it analyses the documents presented, hears witnesses and, if necessary, commissions an expert opinion. Although this process is more time-consuming, in many situations the creditor may have no other option.
It is worth remembering that the correct preparation of the claim for payment and the proper formulation of the claims and justification will be crucial to the outcome of the case.
Stage 3 – demand for payment (enforcement proceedings)
After obtaining a final judgment or payment order, the creditor may proceed to the final stage of debt recovery in Poland, i.e. bailiff enforcement under Polish law. the creditor may proceed to the final stage of pursuing their claims, i.e. debt enforcement by a bailiff. This is the stage at which the court judgment is actually enforced and the funds due are recovered from the debtor.
What happens after a final judgment is obtained?
In order to commence bailiff enforcement proceedings, the creditor must have a ruling with an enforcement clause, i.e. a court confirmation that the ruling (e.g. a payment order) may be enforced by a bailiff through enforcement proceedings. At this stage, the creditor has the right to choose the bailiff who will conduct the enforcement. The application for enforcement may be submitted independently or through a representative, most often a solicitor who conducted the case before the court.
What does cooperation with a Polish bailiff look like?
After the application is submitted, the bailiff proceeds to determine the debtor’s assets. In practice, they use IT systems (including OGNIVO, CEPIK, ZUS, US) to determine the debtor’s bank accounts, employer, vehicles, real estate or other assets from which enforcement can be carried out.
The creditor may also indicate the debtor’s known sources of income or assets, which in many cases can speed up the debt recovery process. Depending on the debtor’s financial situation, the payment request may be pursued from various sources, for example:
- from the debtor’s bank account, which is the most common and fastest way for the creditor to recover the money,
- from the debtor’s salary, which means that the bailiff may seize part of the debtor’s salary,
- from movable property, for example through seizure and sale of cars, electronic equipment, machinery or other movable property of market value,
- In the case of significant debt, a bailiff may enforce recovery from an apartment, house or plot of land.
- It is also possible to enforce recovery from other property rights, such as shares in a company, receivables from contractors, copyrights, as well as tax overpayments accumulated at the tax office.
Summary
Debt recovery in Poland involves several stages, from pre-court proceedings to bailiff enforcement, and the effectiveness of the entire process depends on proper planning and action.
The first step is to send a payment request to the debtor. The request often avoids the need to go to court and can be a starting point for pre-court negotiations. After sending the request, it is worth considering negotiations with the debtor, which may lead to a settlement and repayment of the debt without the involvement of the court. If the demand and negotiations are unsuccessful, legal proceedings should be initiated. Once a final judgment or order for payment with an enforcement clause has been obtained, it is possible to initiate bailiff enforcement proceedings.
The effectiveness of the entire process largely depends on the professional preparation of each step and consideration of details that increase the chances of successful enforcement.
Can a creditor pursue a claim in Poland if the agreement was not made in writing?
Yes, in Poland it is possible, although in practice it may be more difficult for the creditor to prove their claim than if the agreement had been made in writing. In the absence of a written agreement, the creditor should use evidence such as emails, correspondence, confirmation of services rendered, witnesses (who can confirm the conclusion of the agreement or its performance) or proof of payment. The more complete and consistent the evidence, the greater the chance of successfully pursuing the claim in court.
Can a debtor avoid payment in Poland by transferring their assets to someone else?
In Poland a debtor who deliberately conceals or transfers assets may be liable to criminal prosecution for obstructing enforcement. In addition, the creditor may file a so-called Paulian complaint, regulated in Articles 527-534 of the Civil Code. The complaint allows the debtor’s legal actions that were detrimental to the creditor, e.g. the transfer of assets to third parties, to be invalidated. This makes it possible to restore the financial situation enabling the enforcement of the debt.
What can a creditor do if the debtor avoids receiving correspondence in Poland?
In Poland if the court document or summons is not collected, it will be deemed to have been delivered 14 days after the second notification (known as deemed delivery). It is also worth considering delivery by a bailiff or sending the document to several known addresses of the debtor. No
How to secure a debt in Poland before going to court?
A creditor may apply to the Polish court for security over the debtor’s assets even before the commencement of court proceedings or together with the lawsuit. Security over assets may consist, for example, in the seizure of a bank account, the establishment of a mortgage on real estate or the seizure of the debtor’s movable property. Such measures reduce the risk that the debtor will hide their assets from enforcement. However, it should be borne in mind that obtaining security is not automatic and the validity of the request must be demonstrated by substantiating the claim and demonstrating a legal interest in granting security.
Can a creditor recover a debt in Poland from a debtor who lives abroad?
Yes, in Poland it is possible to pursue claims against debtors residing abroad, but the court procedure is slightly more complicated. It usually requires filing a lawsuit with the competent court in Poland or using European legal instruments, such as a European order for payment, and sometimes also cooperation with a solicitor in the debtor’s country.
Can a creditor in Poland claim interest for late payment of a debt?
Yes, the creditor in Poland has the right to demand statutory or contractual interest from the date the debt becomes due until the date of actual payment. In many cases, interest constitutes a significant portion of the debt recovered by the creditor.
How long does the debt recovery process take in Poland?
In Poland the time it takes to recover a debt depends on a number of factors, primarily the evidence in the case, the debtor’s response, the efficiency of the lawsuit, etc. Simple monetary claims in the EPU can be completed in a few months, injunction proceedings take several weeks on average, while classic civil proceedings can take from several months to several years, especially if it is necessary to obtain expert evidence or hear witnesses.
What are the risks associated with pre-trial negotiations?
Negotiations in Poland are usually beneficial, but they can be risky if the debtor misleads the creditor or extends deadlines without any intention of repayment. In such a case, it is worth specifying a time frame and safeguards in the negotiations, e.g. signing a settlement agreement with a clause of voluntary submission to enforcement.
