Enforcement proceedings

What it means

Enforcement is the compulsory execution of a decision. It starts on a creditor’s application backed by an enforceable title: a judgment, a payment order, a notarial deed or an arbitral award.

The bailiff can freeze an account, attach wages, sell movable assets or register a lien. A company usually learns of it from the frozen account rather than from a letter.

Enforcement must be told apart from tax enforcement. That is carried out not by a court bailiff but by the tax authority itself, on the basis of its own statement of arrears and without a court. The effect on the company is similar - a frozen account or deductions - but procedure, deadlines and defence follow the Tax Procedure Code, not the Enforcement Code.

How it works in practice

If the debtor is your employee, the company becomes the paying agent: it must apply the deductions in the correct order and remit them. Failing to deduct means paying out of its own pocket.

As a creditor, enforcement is the last step. Reminders, an acknowledgment of debt and an instalment plan are cheaper and faster, because no bailiff collects from an empty account.

When a company receives notice that enforcement has begun, we first check whether the debt still exists and whether it is time-barred. An application to discontinue enforcement must be filed within a short period after the notice is served, so we pass it to a lawyer at once and prepare from the books an overview of all payments and documents involving the creditor.

What to watch out for

A frozen account stops wages and contributions too, unrelated as they are to the debt. So a payment order that arrives is never ignored: defending it after it becomes final costs many times an objection filed on time.

Paying the creditor directly once enforcement has begun is not enough. The enforcement costs and the bailiff’s fee remain, the proceedings continue and the account stays frozen until the bailiff closes the case. A company can have the debt settled and still be unable to pay suppliers for several days, which with tight liquidity causes further delays.