Claim enforcement, recovery
Our office has outstanding experience in legal claim enforcement, our clients can turn to us if their claim of a contractual relationship is not paid by their contracting partners. In these proceedings, we are also representing individuals and business associations, whether it is individual cases or mass recovery.
Sub-processes and types of claim enforcement:
Non-legal debt management
In this case, there is no court yet, other authorities are dealing with the case, but contact with the debtors is realized, in which we assess the potential willingness to pay and the possibility of an out-of-court settlement. According to our practical experience, in some cases, the fact that the client turned to the attorney and the debtor receives the letter of admonition sent by the attorney will advance the willingness to pay.
Within this section, we primarily do the following subprocesses:
- - Contacting the debtors by telephone, in writing or in person
- Sending letters of admonition
- Conduct negotiations in order to conclude payment agreements, establish debt recognition declarations, establish payment agreements
Payment warrant proceeding "FMH"'
Legitimate enforcement of certain claims under a legal limit can only be initiated by the initiation of a payment warrant proceeding. In doing so, an appropriate application will be submitted electronically to the Hungarian Chamber of Civil Law Notaries (Magyar Országos Közjegyzői Kamara), and the Chamber will forward the request to a notary who will further evaluate it. The notary sends the application (FMH) on paper to the debtor, who has 15 days to react. If the debtor does not do so, the FMH will become final and enforceable, and judicial enforcement can be initiated. If the debtor objects to FMH, submits a statement of opposition, the process turns into litigation and the claimants can only claim their claim in court only, but there are expressly short deadlines for this, so we always inform our clients to prepare the necessary evidence and statements in advance.
Litigation
If the payment warrant proceeding turns into litigation, or litigation can be initiated at the first time in respect of the amount of the claim, it is necessary to file charges / lodge the necessary petition before the competent court.
For more details on litigation procedures, see "Litigation, representation in Court".
We also consider it important to inform our clients that in the case of claim enforcement against business associations, special procedures may be initiated against the individual members and executive officers, depending on the operating structure of the business association.
- Proceedings can be initiated against the limited partnership and the general partner of the limited partnership at once, since the general partners are responsible with all their assets
- Action for avoidance of contract in the case of concealments of assets, under Paragraph 40 (1) of the Bankruptcy Act
- Initiating litigation against the debtor's executive officers in case of a violation of the creditor's interests Under Paragraph 33 / A. (1) of the Bankruptcy Act
Judicial enforcement
The procedure detailed above for the claim enforcement is separate, depending on whether the underlying contract is registered in a public document or a private document. In the case of a public document, the legal enforcement is faster because the payment warrant proceeding or the litigation can be omitted and the judicial enforcement can be started immediately. However, in the case of a claim based on a private document, final and enforceable judgement or payment warrant is indispensable for the initiation of judicial enforcement. Prior to initiating the judicial enforcement, we inform our clients about the costs incurred and the chance of recovery.
At this stage of the procedure the following activities are performed by our Office:
- preparation of documents to be executed, initiation of execution clause
- Communication with the executor
- In case of necessity, submission of objections against the executor’s action
- In case of executions against debt covered by real estate mortgage, submission of involvement into the procedure as mortgagee
- Tracking and controlling the executor’s account and payments expected during the execution procedure
Liquidation proceeding
In the case of invoiced claims against business associations, liquidation proceeding may be initiated, if the legal requirements are met.
For more details on liquidation proceedings, see "Corporate law".
