1.1 Amicable Phase
Collection Agency Service Slovakia is committed to delivering a professional collection process to our clients, focusing primarily on maintaining an amicable relationship between the clients we represent and the debtors we are asked to pursue. Our team of collection professionals is based entirely in-house, ensuring that every step of the process will be conducted efficiently and with the same commitment to amicable, high-value results. When pursuing a debtor, our collection agents will attempt to contact that debtor via telephone contact as well as written correspondence to the debtor’s primary business address or residence. During collection, our collection professionals will adhere to all federal and state laws set by the Slovak Republic.
In some cases, debtors may file a dispute against the debt that we have been asked to pursue. If this happens, Collection Agency Service Slovakia will examine all relevant documentation between the parties in order to obtain a quick and amicable resolution to the dispute. These documents include the original contract between the parties, as well as any terms and conditions as agreed. Further documentation examined by our professionals will include invoices, account statements, and documentation of any relevant correspondence. During this process, and any processes relating to research or disputes, our professional collection agents will consult with our in-house legal team in order to pursue the best path forward for both the client and the debtor.
1.1.2 Local agent
In some instances, Collection Agency Service Slovakia will invoke the use of a large network of field agents in order to enhance our effectiveness during collection. This network of local agents is carefully selected by our in-house staff, ensuring that they’re the highest-quality and most effective agents available to our clients. This method varies in terms of how effective it can be but, since beginning the field agent service, Collection Agency Service Slovakia has been particularly successful pursuing individual debtors, sole trader, small businesses, and retail store owners, though this program.
Sometimes, Collection Agency Service Slovakia will find it quite hard to get in contact with a debtor. This can result form ignored phone calls or written correspondence, and it can make collecting a debt particularly hard. Because we are committed to offering the most effective debt collection service in the country, we will reserve the right to dispatch our field agents to the debtor’s primary business address or residence in order to make successful contact and proceed amicably. Our field agents will use their expertise in this field to pursue tracing of the debtor’s location, activities, and financial information.
During any field visit to any debtor, Collection Agency Service Slovakia is primarily interested in learning more about the debtor’s financial situation and their ability to repay the debts. Our field agents pay particular attention to assets, balance sheets, and interviews of business associates, in order to consult with our legal team and determine the best way to proceed through either the legal or amicable process.
Collection Agency Service Slovakia maintains a policy of always charging interest to debtors during the amicable phase of collection. This interest rate is set by one of two sources. The first, and generally the most common, is the contract that was initiated between the debtor and the creditor at the time their relationship was established. This rate will be enforced by our collection agents on a semi-annual basis when pursuing the debtor. This rate will also be used during the legal phase of any debt that has been disputed, and will generally be added to the debtor’s balance by the judge when a judgment has been lodged against the debtor.
If no interest rate is set by the contract between the creditor and the debtor, then it is the policy of Collection Agency Service Slovakia to charge a standard interest rate. This rate is calculated based on the current “repo rate” issued by the European Central Bank. An additional 8 percentage points are then added to that rate, and the rate is charged to the debtor on a semi-annual basis until full collection of the debt has been achieved. This amount is a universal interest rate that applies to virtually all business transactions in Slovakia and throughout the European Union, and it is specifically set by the country’s code of civil law. Collection Agency Service Slovakia will charge this rate on a semi-annual basis, and it will be charged during both the amicable and legal phases of the collection process.
When pursuing a debtor through the legal system, judges presiding over a case will almost always award the full amount of interest as part of the debt’s total balance. That’s especially true if the interest rate has been charged to the debtor based on the contract agreed to by both parties. It should be noted, however, that debtors in Slovakia are highly opposed to paying any amount of interest on an outstanding debt, and it will often be extremely hard to collect any amount of interest from those debtors during either the amicable or legal phases. The interest rate is not generally negotiated, however.
1.1.4 Debt collection costs
Collection Agency Service Slovakia does not charge collection costs to the debtor in the Slovak Republic, as no current law regulates how this should be done. In the absence of a law, charging collection costs is often disregarded in court and those costs are not added to the debt’s balance. Should these laws change and permit the charging of collection costs to the debtor, Collection Agency Service Slovakia will update its policy and consult with clients as to which costs should be attached to the debt’s current outstanding balance.
1.2 Legal Procedures
Current laws and regulations in the Slovak Republic do not require creditors or their representatives to notify debtors before pursuing legal action against them. It is customary, however, for creditors to issue a final reminder for payment before pursuing a lawsuit or the legal dunning procedure. This not only counts as a common courtesy, but also increases the possibility that the debtor will pay the debt and be intimidated by the threat of legal action.
If the final payment reminder does not result in full payment of the debt, then the creditor can initiate legal action against the debtor. Debtors and creditors can also agree to pursue arbitration before taking the case through the traditional court system, saving on court costs and resulting in a much more amicable process between the parties. If no such agreement for arbitration can be reached, then the case will proceed through the District Court located closest to the debtor’s business address or primary residence.
1.2.2 Required documents
In order to begin legal proceedings against the debtor, Collection Agency Service Slovakia will require a few specific pieces of documentation. These documents will help to prove the case and ensure it moves efficiently through the District Court system in Slovakia. Clients will need to provide the following to our professional collection agents:
– Original Power of Attorney, signed and notarized
– Export from the Trade Register
– Copies of any outstanding invoices
– Any current account statements that will prove the debt’s validity
– Copies of transport documents that have been signed by the debtor
– Any relevant purchase contracts
If the court case proceeds and becomes heavily defended, Collection Agency Service Slovakia will require additional documentation in order to defend the case. These documents will include:
– Copies of credit notes
– Copies of the full contract
– Copies of delivery notices, orders, and confirmations
– Copy of the debt transfer to a third party, if relevant
Some additional documentation beyond the list above may be required during especially complex or unique cases before the court. In those instances, Collection Agency Service Slovakia will consult with the client personally to ensure that all relevant documents are obtained and delivered to the judge overseeing the case.
1.2.3 Legal dunning procedure
The legal dunning procedure in the Slovak Republic applies only to those monetary debts when the debtor is actually traceable. The courts must be able to deliver a judgment to the debtor in order for legal dunning to proceed in the Slovak Republic.
If the debtor can be traced, and therefore can be part of the legal dunning procedure, they will have as long as 15 days to appeal any judgment that is delivered to them. This automatically turns the judgment into a standard legal proceeding, and the debtor instantly becomes the defendant in a collection lawsuit filed against them by the creditor.
Any lawsuit launched against a debtor is initiated due to one of two reasons. The first reasons is that amicable collection has simply failed to produce results within the desired timeframe set by the client — typically anywhere from six weeks to three months. A lawsuit can also occur immediately after a debtor has filed an objection or appeal to a judgment, or disputed the validity of the debt itself. In either case, Collection Agency Service Slovakia will consult with our clients to determine the best course of action so that the lawsuit can ensure a successful and full recovery of the debt.
Court fees in the Slovak Republic are calculated on a percentage basis. During a collection suit, court costs will be set at 6 percent of the debt’s full outstanding balance. Lawyer’s fees are also charged on a percentage basis, and typically vary from a low of 3 percent to a high of 6 percent of the debt’s full outstanding balance. Other costs charged during the legal process will arise if document translation is required, or if the business requires witnesses and experts to prove the case and testify regarding an oral agreement between the parties.
1.2.6 Expected timeframe
Legal proceedings in the Slovak Republic are actually quite efficient, especially when compared to surrounding countries. For those debtors who can be traced, the legal dunning procedure generally takes no more than 6 months, with some procedure taking as little as three months to produce results for the creditor. If a case does proceed to a lawsuit, creditors can expect the case to take about 12 months to fully complete. More complex cases will take longer, of course, and every case will be impacted by the availability of the lawyers and judges assigned to the matter. Estimations of the full amount of time required for a legal proceeding will be provided on a case-by-case basis by Collection Agency Service Slovakia.
1.2.7 Interests and costs in the legal phase
The court system in the Slovak Republic is inclined to award interest rates as part of the debt’s full outstanding balance. These interest costs are charged during both the legal and amicable phases of collection, and they will be charged as long as the basic claim, with interest included, is accepted by the judge hearing the lawsuit against the debtor. The losing party in any lawsuit is also responsible for paying the full costs of the court procedure and legal fees. This will be mandated by the judge and included in the final balance of the outstanding debt. As mentioned earlier, however, the costs associated with the primary collection process cannot be collected either outside of court or within a lawsuit, as these costs are not defined or covered by the civil law code in the Slovak Republic.
1.3 Insolvency Proceedings
Insolvency proceedings can only begin after a proposal has been filed with the court, and the court has granted that proposal. In the Slovak Republic, all insolvency proceedings are pursued as court procedures and all of them are subject to decisions made by the courts. A debtor is determined to be insolvent when they have more than one creditor, several outstanding invoices due to all of their creditors, and it has been more than 30 days since they have been able to make a payment toward any of their outstanding debts. Insolvency is often declared by the courts in cases where the debtor has more creditors and debts than the value of all of their assets combined.
In the Slovak Republic, insolvency can begin after either the debtor or one of their creditors has filed a proposal. A court will then investigate the financial situation of the debtor who has been proposed as insolvent; this procedure is largely conducted to determine whether or not the debtor is bankrupt, or has the assets necessary to pay out a dividend to all creditors with a valid claim to the debtor’s liquidated assets. After the court has declared bankruptcy, it will begin evaluating the debtor’s assets and determine which type of proceeding is the best for the debtor’s individual situation. The bankruptcy declaration itself will be published immediately in the Insolvency Register, which is updated and accessed via the Internet in the Slovak Republic. This register can be viewed by the public.
Enforcement procedures must stop when the bankruptcy declaration is published in the Insolvency Register. A court-appointed liquidator will be assigned to the debtor in order to investigate the debtor’s assets and manage the claims lodged by creditors against the debtor. Creditors who feel that they have a valid claim to any potential dividend will have 45 days to file a claim against the debtor’s assets. That deadline is calculated from the date that the bankruptcy declaration is published in the country’s Insolvency Register on the Internet. If the deadline is missed, the creditor will not have any claim to the dividend that will be issued by the court at the conclusion of the insolvency proceeding.
Insolvency is typically pursued in two different ways by judges in the Slovak Republic. If the debtor wishes to liquidate their assets, discharge their debts, and close their business permanently, traditional bankruptcy is pursued. This process will see clients receive a small dividend of any liquidated assets, while the debtor will be safe from enforcements and execution of any outstanding judgments as part of the process. Both corporate entities and private citizens can pursue this type of bankruptcy in the Slovak Republic.
For debtors who do not wish to close their doors and end their business permanently, a second type of insolvency can be pursued. This type of insolvency is essentially a corporate restructuring plan, which will allow the debtor to restructure their debts and assets. Creditors are likely to get a far larger settlement amount out of this type of proceeding, but it can only be pursued by those debtors who have sufficient assets to cover their costs and secure their debts. Any changes must be proposed to the court, and the court will then approve or deny the restructuring plan.
1.3.3 Required documents
In order to lodge a claim on behalf of our clients, Collection Agency Service Slovakia will require the following documentation:
– Original Power of Attorney
– Copies of invoices
– Copies of delivery notices
– Copies of account statements
– Copies of contractual agreements
– Copies of Trade Register exports
– Copies of orders and confirmations
– Copies of conditions of sales, if relevant to the case
– Copies of correspondence between the parties to help verify the claim
1.3.4 Expected timeframe and outcome
Insolvency proceedings are rather slow and difficult in the Slovak Republic, and they generally take more than a year to complete. Any updates and applicable steps are published in the Insolvency Register via the Internet.