Dunning law and Enforcement Law
There are numerous situations where a Court Payment Order may be applied for in an endeavor to avoid long-lasting litigation. Such Payment Orders may be applied for on the basis of an existing invoice, a contract or an agreement, etc.. It is in this case necessary to know the debtor’s address or whereabouts, as it will otherwise not be possible to serve the required papers to the debtor (in cases of summary Court proceedings for Payment Orders a so-called „service by public notice“ is not possible). In these days it has become one of the main problems in dunning and enforcement proceedings to find out a debtor’s place of residence to begin with. If that is known a debtor should be dunned at least once, setting a deadline for response so that the debtor will be shown to be in default in payment. After the Court Payment Order will have been served upon the debtor the debtor has two weeks to either settle the claim by payment or to lodge an objection against the claim. If these two weeks will lapse without any reaction the creditor can apply for delivery of an order of enforcement of the Court Payment Order. If that will again not result in payment or the filing of an objection on the part of the opponent party the Court will deliver such an enforcement order. As soon as the creditor will have received this title the creditor may proceed and take appropriate enforcement measures.
The course of application of these measures is frequently difficult to understand for non-experts. The basic principle is that a legally valid executory title – which can be a Court judgment or Decree (judgment by default, final judgment, a judgment based on defendant’s acknowledgement) a compromise or settlement, a notarized instrument or the above-mentioned enforcement order - must have been granted before suitable steps can be taken. As a rule it is recommended that the dunning and enforcement department ought to verify in advance which of these measures appears to hold out the best promises of success. In this context the most frequently used procedures are the following:
The competent bailiff is given a combined enforcement order, that is to say that he will in case of an unsuccessful attachment attempt to immediately initiate proceedings aiming at the submission of an affidavit or statutory declaration ( formerly „debtor’s oath“), and if necessary the competent Court having jurisdiction thereon will be requested to enter a Warrant of Arrest.
If the creditor or the creditor’s authorized counsel or agent knows any of the debtor’s banking data, it is recommended to proceed to the measures of either a provisional prohibition to make any payments or seizure of the account balance so that the unpaid claim may be covered by the available credit balance of such an account. Even if it then turns out that the account is a deficit account, such an attachment may already cause considerable difficulties for the debtor so that the debtor him- or itself will make all kinds of efforts to settle and pay this claim.
Other potential measures could be the seizure of tax refunds from the Inland Revenue Office to the debtor, or the seizure of income from rents or, naturally, of wage and salary income. In the latter case it must be ensured that certain legal stipulations must be taken into account when it comes to the seizure of child support. In cases of this nature it is possible to request that the tax-free amount involved in such seizure, which is otherwise fairly high, be reduced.
In situations where information concerning real assets is available the creditor may see to it that a security mortgage be entered in the land register. A creditor may also participate in potential foreclosure sale proceedings or even request himself that such proceedings be initiated. In the case where a claim relates to potential housing subsidies it is to be noted that special statutory stipulations are applicable when it comes to the determination of the category of the claim concerned.
In order to be able to fully and successfully exhaust all available measures of enforcement it must be noted that it is extremely important that comprehensive information be exchanged between the client and the client’s lawyer or a company’s dunning and enforcement department, as this should always be the basis for successful action.