How can I recover my debt without a lengthy litigation process?
In life, it is often the case that a debtor refuses to repay a debt for a variety of reasons and does not respond to your calls to fulfil his/her obligation. In such cases, going to court may seem like the only option, but litigation is often lengthy and expensive. The Civil Procedure Code introduces the institution of a court order to ensure a faster and simpler way of collecting debts. Rokas Puodžiūnas, a lawyer at AVOCAD, talks about its objectives and advantages .
What is the characteristic of the process of issuing a court order? Here, a uniform form of application is submitted. No evidence is attached to the application. These cases are dealt with by the district courts. The stamp duty is a quarter of the application fee, but not less than €10. There is no pre-litigation stage.
A court order is a procedural document issued by a court to a creditor. If the debtor does not object to the order or does not pay the debt within 20 days of service of the order, the order enters into force and becomes an enforceable document that can be submitted to a bailiff. It should be noted that a court order can only be issued in respect of pecuniary claims, irrespective of the grounds on which they arise.
How do I apply for an injunction? A person seeking a court order must file an application. Its content is set out in Article 433 of the Code of Civil Procedure. However, it is most convenient to use the standard form approved by the Minister of Justice, which can be submitted to the court of the debtor's place of residence both on paper and electronically.
When can the application be heard? The necessary conditions are that the creditor has fulfilled its obligations (in the case of a bilateral obligation), that a part of the obligation is claimed (in the case of a split obligation), and that the debtor is resident or has its registered office in Lithuania. The court order cannot be issued if the claim arises from a consumer credit agreement with an annual percentage rate of charge that does not comply with the statutory requirements, and if the interest requested exceeds the statutory maximum rate of interest for late payment (under the Commercial Contracts Act).
Is it necessary to provide evidence? Formally, no. The creditor is not obliged to substantiate the claim with evidence, and the court does not check its validity. However, the court will refuse to accept a manifestly unfounded claim. It is therefore advisable to enclose at least basic documents supporting the monetary claim with the application.
The procedure is as follows: the court will first issue the injunction no later than the next working day after the application is accepted. Copies of the creditor's application and the court order are sent to the debtor. The debtor has 20 days to either: pay the debt and inform the court, or object (without giving reasons). If no objections are lodged, the order becomes final and is forwarded to the bailiff for execution. If the debtor objects, the creditor has 14 days to bring an action under the general rules and to pay the missing stamp duty.
The biggest risk in initiating proceedings for the issuance of an injunction is that the debtor, even if he knows that the debt claimed from him is justified, may deliberately raise objections before the court, thus starting a lengthy litigation process. Therefore, it is advisable to restrict the application for an injunction to 'clear' monetary claims, i.e. disputes where it is unlikely that the debtor has evidence to counter the claim for payment. If you are in doubt about whether it is worth applying to court for an injunction in your situation, rather than going straight to court, it is advisable to seek legal advice.