Debt Collection Agency Slovakia
Amicable Debt Collections Slovakia
1.1. General information
Cosmopolite Collections maintain a professional collection process, focusing on the relationships between our clients and their debtors at all times.
Our team of collection specialists carry out the collection process in-house, contacting debtors both verbally and in writing whilst adhering to state laws. When there is a dispute, we aim to reach an amicable solution between the creditor and the debtor.
We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes, as well as all standard terms that have been agreed upon).
All investigations are completed with the assistance and agreement of our legal team.
1.2. Local agents
Cosmopolite Collections offer direct collection activities managed by a selected network of local agents who visit debtors all over the country. In our experience, this solution is particularly successful debtor categories, such as individual sole traders, shops and small companies.
The local agent network can also help investigate and find untraceable debtors.
1.3. Debt Collection Interest Slovakia
Interest on late payment rates should be specified in the contract between the supplier and the buyer. If it is not the case, the supplier can charge statutory interest on late payment that is based on law.
The interest rate is the same for all business relations. For contracts concluded before 31st January 2013, it is calculated as the main refinancing operations (fixed rate) of the European Central Bank, plus 8%.
For contracts concluded after 31st January 2013, it is calculated as the main refinancing operations (fixed rate) of the European Central Bank applicable on the first day of delay plus 8%, or as the main refinancing operations (fixed rate) of the European Central Bank applicable on the first day of the relevant half-year, plus 9%.
Cosmopolite Collections charge interest to debtors, both in the amicable and judicial phases. In judicial proceedings, the interest rate is based on the law if it is not contracted by the parties; and courts award the interest that is required under the condition that the principal is granted.
1.4. Debt Collection Costs Slovakia
The creditor can also demand a lump sum of collection costs of EUR 40.
2. Legal Debt Collections Slovakia
2.1. General information
The creditor can also demand a lump sum of collection costs of EUR 400.
2.2. Required documents
In order to start legal action, Cosmopolite Collections need the following documents:
- an original power of attorney,
- an extract from the trade register of the creditor
- copies of any unpaid invoices, contracts, relevant orders, order confirmations and transport documents (CMRs) signed by the buyer, general terms and conditions and current statements of account.
These documents are also required for supporting claims arising from purchase contracts. Optional documents are copies of credit notes, any other correspondence that may verify the claim and the contract on the debt’s assignment if the debt is claimed on behalf of a third company who is not the original seller of the unpaid goods.
Documents required for legal action are determined by the type of the claim and its nature. It is helpful if the creditor has some security such as an acknowledgement of debt or a bill of exchange. In the amicable collection process, Cosmopolite Collections will try to obtain some security from the debtor, which can be helpful during legal proceedings.
2.3. Legal dunning procedure
This procedure is only applicable for monetary debts where the debtor is traceable and the court is able to deliver a payment order to the debtor. The debtor may file a complaint within 15 days after the payment order was delivered to them. That will transfer the dunning procedure into a regular lawsuit procedure.
2.4. Lawsuit in Slovakia
The regular lawsuit procedure is initiated either directly after the amicable collection has failed due to a dispute by the debtor or directly after the legal dunning procedure if the debtor filed a complaint against the payment order or if the payment order cannot be delivered to the debtor.
2.5. Debt Collection Costs Slovakia
Court fees are 8% of the claim amount or 2% in case of an electronic payment order (at least EUR 500 with a maximum of EUR 25,800.90). The fee is calculated on the basis of the principal, not including interest but including a contractual penalty if demanded by the creditor.
Arbitration fees are established by a special arbitration rule. Lawyers’ fees depend on the form of legal action and the amount of the claim in dispute and can vary from 2% to 4% of the claim.
Other costs can be accumulated from the translation of documents.
2.6. Expected time frame
The average duration of a legal dunning process is between three and six months, whereas a court procedure can take 12 months or longer, depending on the complexity of the case and the availability of the judge and lawyers on both sides.
2.7. Interest and costs in the legal phase
The courts always award either interest, on which the creditor and the debtor agreed, or the statutory interest and also a lump sum of collection costs. The losing party also has to pay court fees and lawyer costs.
3.1. Enforcement of a court decision
Legitimate court judgments and arbitration awards may be executed by executors in an execution proceeding if the debtor does not fulfil the obligations imposed by court judgment or arbitration award. Execution proceedings comprise two parts.
The first part starts by filing a motion to an executor and determining the question of formal requirements.
After the motion is filed to the executor, the court will authorise the executor to start execution proceedings. In the second part, the authorised executor carries out the execution proceedings.
An execution can only be ordered if a motion is submitted by the entitled party or by any other party who can prove that the entitlement was transferred to them.
The execution proceedings end when all claims are fully paid, including all charges, or if the debtor has no property left.
3.2. Methods of execution
Enforcement of decisions imposing payment of a sum of monies can be carried out by means of deductions of wages or salary and other incomes, the assignment of receivables of the debtor, the sale of movable property or the sale of the business.
The choice of the particular means of execution depends on the executor. In the case of a secured claim, a court decision can be enforced by the sale of movable property, bulk assets, groups of assets and residential or non-residential premises under the ownership that has been given as security in accordance with the specific legislation; by compulsorily debiting from a money claim that was given as security; or by recovering against other property rights given as security.
Enforcement of decisions can be carried out by the sale of immovable property as well.
4. Insolvency proceedings
4.1. General information
An insolvency proceeding may only start following a bankruptcy or restructuring motion submitted by the debtor themselves or by one of the creditors.
If the court decides that the debtor is insolvent, the debtor is declared bankrupt or the restructuring is permitted.
A debtor is insolvent either if they have more than one creditor, unpaid invoices of more than 30 days overdue and the debtor is unable to pay their debts, or when there is more than one creditor and the amount of debts is greater than the assets of the debtor.
This procedure may last several years.
After the debtor or a creditor submits a bankruptcy motion, the court checks the debtor’s financial situation and decides if the debtor is insolvent or not. If the court finds that the debtor is insolvent, it declares bankruptcy.
The decision is published in the Business Journal, which is available for public viewing on the internet. All enforcement procedures have to be stopped at that point, and all court and arbitration proceedings are suspended. An administrator is appointed to supervise and inspect the bankruptcy proceedings.
The administrator has to inform all known foreign creditors about the debtor’s bankruptcy and invite these creditors to lodge their claims within 45 days since the publication of the declaration of bankruptcy.
If this deadline is missed, creditors may still lodge their claims, but they cannot exercise their rights as creditors.
Bankruptcy can be used if the assets of the debtor are used to discharge claims and the debtor closes their business. This procedure is available for both individuals and legal entities. Restructuring is possible after the debtor or the creditor submits a restructuring motion and the court checks the debtor’s financial situation.
The debtor must propose changes in the business, enabling the debtor to pay the debts and keep the business while restructuring. If the requirements are met, the court permits the restructuring proceedings.
The decision is published in the Business Journal. All enforcement procedures have to be stopped at that point, and all court and arbitration proceedings are suspended.
An administrator is appointed to supervise and inspect the restructuring proceedings. The administrator has to inform all known foreign creditors and invite them to lodge their claims. Creditors may lodge claims within 30 days after the permission for restructuring is published. If this deadline is missed, no claims will be added to the insolvency proceedings, and claims that were not lodged can no longer be enforced.
This procedure is usually used for larger companies.
4.3. Required documents
In order to lodge a claim on behalf of our client, Cosmopolite Collections need:
- An original power of attorney
- Copies of invoices
- Copies of delivery notes
- Statements of account
- An extract from trade register
- Copies of contracts
- Copies of orders, confirmations and delivery notes
- Copies of general conditions of sales, should there be any
- Copies of any other correspondence that may verify the claim.
4.4. Expected time frame and outcome
The whole duration of a bankruptcy procedure often takes more than a year, especially in more difficult cases. Important updates and steps undertaken in bankruptcy or restructuring proceedings may be found in the Business Journal.
It may be difficult for a foreign business to collect debts in Slovakia, as the process can be complex and may involve navigating unfamiliar legal and cultural considerations.
The capital city of Slovakia is Bratislava, and the country is divided into eight regions. Slovakia has a parliamentary republic system of government, and the official language is Slovak. The currency is the Euro.
There are a number of debt collection agencies operating in Slovakia, and the industry has existed in the country for several years. The national credit bureau in Slovakia is called the Slovak Credit Bureau, and some private credit reporting companies include Experian, Equifax, and TransUnion.
Debt collection laws in Slovakia are generally uniform across the country, although local laws may also apply in certain cases.
There are several benefits to using commercial debt collection services in Slovakia:
- Expertise in navigating the local legal and cultural considerations involved in debt collection in Slovakia.
- Access to a network of local debt collectors who are proficient in the Slovak language.
- Professionalism and discretion in all communication with debtors.
- The ability to handle a large volume of debts efficiently.
- Flexibility in tailoring debt collection strategies to the needs of individual creditors.
- A high success rate in recovering debts in Slovakia.
- Availability of online resources and support for creditors.
Our debt recovery agency has a very high success rate in Slovakia thanks to our local debt collectors and our comprehensive online resources and support for creditors. We have local debt collection managers in the main cities of Bratislava, Kosice, and Nitra.