Introduction

This survey reviews laws and procedures relating to enforcement of judgments and other enforceable documents in the following countries: Bosnia & Herzegovina, Bulgaria, Croatia, Hungary, Romania, and Slovenia, with some discussion of the system in Serbia.  It seeks to distill best practices and lessons learned that will be helpful to Ukraine as it continues to reform its system for enforcement of judgments. 

The survey was compiled by reviewing the legislation and interviewing practitioners in each country.  The legislation reviewed is set forth in Appendix A.  The list of practitioners interviewed is set forth in Appendix B.

This document begins with a summary of the survey with some recommendations for Ukrainian policy makers to consider.  Then the survey sets forth the laws and procedures in each country.  The first part of this survey focuses on procedures for executing on enforceable documents.  The second part focuses on legislation in these countries that relates to private enforcement agents. 

Summary and recommendations

While the countries surveyed allow enforcement on the same property, and have similar methods to execute on the property, the procedures and practices in the countries are diverse.  None of the countries can boast of an excellent system that should be emulated; all have problems in implementation of laws, and in some cases the laws are causing problems.  According to the table below, Ukraine has a faster system than the countries surveyed.[1]  However, a recent study of the Enforcement of Judgments in Ukraine shows that creditors only collect a small percentage of the money awarded in judgments.[2]

World Bank Doing Business Indicators for Enforcing Contracts

We have distilled some best practices – as well as bad practices – from these countries that can help Ukraine as it improves its enforcement system.  The experiences in key areas are summarized as follows.

<    Case Administration.  Court efficiency is a key to making an enforcement system work better.  Prescribing and enforcing deadlines can help move cases through the system more quickly.  Each of the countries have taken various steps in amending legislation to limit debtors’ ability to delay enforcement proceedings, e.g. limiting grounds for appeal, allowing proceedings to continue while an objection or appeal is being heard, setting shorter time limits for objections and related procedures, and imposing sanctions for non-compliance with orders or hiding assets.  But most of these efforts have fallen short of their goals because courts are overcrowded, judges are inexperienced, and/or the legislation doesn’t go far enough in reducing generous protection of debtors.  In all countries surveyed, creditors’ attorneys believe that judges are overcautious in protecting debtors and third parties in enforcement cases.  This caution tends to slow cases, since it often translates to judges suspending or staying cases, and allowing lengthy procedures and extensions of time limits.

<    Court Procedures.  The more court interventions take place, the greater the chance of delay in the proceedings, either because of inefficiencies or backlogs in the courts or the ability of debtors to delay the proceedings.  For example, despite the fact that most objections and appeals do not suspend enforcement proceedings, Bosnia & Herzegovina (“Bosnia”) suffers from the courts’ inability to process the cases.  The burden of processing the numerous procedures in Bosnia is exacerbated by the fact that all utilities claims are enforced through the courts, creating a seemingly insurmountable backlog.  Providing too many grounds for objections and appeals can cause a system to break down, particularly when the courts are overburdened, poorly managed, or do not have authority or willingness to overcome debtors’ delay tactics.  In Croatia, the law gives judges ample powers to manage enforcement cases to ensure quick and efficient execution, but improvements in efficiency are limited since inexperienced or cautious judges don’t use their powers to rule quickly on spurious objections and appeals filed on behalf of debtors and third parties.

<    Extra-judicial Procedures.  It is possible to take some procedures out of court.  For example, under certain circumstances, Hungary allows execution on movable property to be done extra-judicially, and Croatia allows execution on immovable property to be done extra-judicially.  In both cases extrajudicial execution can only be done when the debtor and creditor agree in writing.  In Hungary, such an agreement has to contain the following provisions: determination of the minimum price at which a pledged item maybe sold and/or specification of the calculation method to be used for this purpose; specification of the period within which the pledge has to be realized after maturity of the lien; legal effect of failure to sell the asset.  Three different types of extrajudicial realization are available: joint sale of the property; the creditor sells the property itself; or the property is sold by an agent of the creditor, e.g. by a person commercially or officially engaged in extending loans secured by liens and/or the organization of auctions.  Sale by the creditor is allowed only if the property has an officially recorded market price or the lender is commercially engaged in the granting of loans that are secured by liens. 

<    The System of Enforcement Agents.  Bulgaria, Hungary, Romania and Slovenia have enacted legislation that provides for private enforcement agents[3].  While our survey was very limited, it appears that Romania and Bulgaria are benefiting greatly from this system, while Slovenia has experienced less benefits.  Our survey shows that keys to success with private enforcement agents include:

1.    Rigorous and objective education and testing requirements.  Slovenia appears to have many under-qualified private enforcement agents, perhaps because they lowered the educational requirement to high school and the enforcement agents are still gaining experience.  Since creditors in Slovenia can choose the enforcement agent they wish to use, the market appears to be weeding out the poorly performing enforcement agents, although the “good” agents are now overloaded with cases.  Romania has a higher educational requirement (Bachelor of Laws degree) and has over five years of experience with private enforcement agents.  The Bulgarian model of highly objective criteria for entry, combined with input by a professional chamber minimizes discretion by relying on an examination that it mostly anonymous.

2.    An effective system of supervision and discipline.  The system must include: mandatory record-keeping for cases and finances; regular inspections by and reports to the court, chamber or ministry (probably the latter is most efficient, though Slovenia has the chamber inspect and report to the Ministry of Justice); and disciplinary procedures and sanctions that can be proposed by the chamber and courts but are instituted by the ministry (as in Slovenia).

3.    A fair and flexible fee schedule.  The best practice may be to set a fee schedule, but allow the creditors and enforcement agents to negotiate lower fees, and perhaps higher fees if there are protections for the debtor, which is ultimately responsible for payment of the fees.  Fees can be set by the Ministry of Justice with input from creditors and enforcement agents and after studying costs involved in various enforcement activities.

<    Enforcement Agent Efficiency.  Strengthening and motivating enforcement agents, can improve efficiency.  As discussed above, enforcement agents must be properly trained, and some countries have found it advantageous to require that they have substantial professional training.  Private enforcement agents can improve efficiency if they are well-qualified and well-supervised.  To motivate enforcement agents, Hungarian and Slovenian practitioners suggest imposition of deadlines on enforcement agents to seize and sell property, only partial payment to an enforcement agent in advance, and/or providing for sanctions against enforcement agents for failure to comply with deadlines. 

<    Expedited Court Enforcement Procedures.  Ukraine should consider special enforcement procedures in cases between businesses where there is sufficient proof of debt and means for challenge.  An example is Croatia’s special promissory notes (“zaduznica”) between businesses that can be levied by the creditor directly upon identified bank accounts without the need to obtain a writ of execution[4]. 

<    Streamlined Execution Procedures.  Serbia’s expedited procedure for execution on bank accounts through the National Bank of Serbia is an excellent example of a simple and cost effective method to execute on assets.  In Hungary, monetary claims against companies can also be enforced through a prompt collection order that allows a debt to be collected through the banking system without filing a judicial enforcement procedure in the court.

<    Limited Appeals.  Most of the countries surveyed have amended their laws to limit appeals or limit their affect.  Appeals by debtors and third parties can dramatically slow proceedings, as is often the case in Slovenia.  One solution is to provide in the legislation that appeals do not suspend enforcement proceedings.  However, in most of the countries surveyed the court can rule that an appeal does suspend proceedings.  One solution is to require that a debtor post a mandatory bond in the amount of the creditor’s claim in order to obtain a suspension.  This could also be applied to objections to court orders and acts of enforcement officers.

<    Flexible Procedures for Liens.  It is desirable to allow creditors to take blanket liens on moveable property.  This enables them to provide credit based on current and future assets without obtaining new security agreements.  It also simplifies execution on moveable property of a business debtor since the creditor can identify currently owned assets to execute on – or better yet the enforcement agent can identify the assets when it levies an order (writ of execution) to seize all moveable property at the debtor’s business premises.

<    Collection of trade debts.  In most of the countries surveyed, it is relatively certain that a creditor holding valuable collateral will eventually collect the money owed to it.  This is especially true for banks, which have the ability to over-secure loans and to obtain the information they need to locate assets, and can use the procedures to execute on their collateral.  But trade creditors, e.g. suppliers holding accounts receivable, often have a much more difficult time collecting amounts owing.  Some countries have tried to help them by providing that trade debts can be enforced without proceeding to obtain a judgment in a civil or commercial court case.  For example, in Romania, there is a special procedure for money debts due, e.g. accounts receivable.  If the debt is recognized by the debtor in a written document and is due and not challenged, a creditor can go to court and the court will issue a writ of execution without any need to analyze the merits of the case. 

<    Foreclosure on Immovable Property.  One of the sources of wealth – and collateral for loans – in an economy is real property.  But if banks face an expensive and lengthy foreclosure process, they are less likely to lend on real property collateral, and when they do the banks will require higher interest rates, stiffer collateral requirements, and shorter terms than if foreclosure procedures were streamlined.  Unfortunately, all of the countries surveyed have more complex procedures for real property foreclosure than for any other collateral.  The legislation protecting debtors may be based on a theory that real property assets are more valuable than other types of assets and that households should not be foreclosed on if at all possible.  While real property is unique, it is not necessarily more valuable than other assets.  And it would make sense to provide more protection for household residences than other types of property.  But properties that are not the debtor’s residence should be subject to streamlined procedure proceedings (perhaps out-of-court).  And residences could be protected in other ways, e.g. via homestead exemptions, periods for cure of the default, etc.  Some of the procedures don’t protect debtors, at all.  For example, the requirements for multiple auctions with minimum bids declining from the appraised value actually discourage bidders and encourage collusion.  Bulgaria has an auction conducted by private enforcement agents that collect sealed bids over the course of a month. 

<    Enforcement on Moveable Property.  In each country, the procedure for execution on movable property is: seizure, appraisal, sale, and distribution.  However, Hungary allows extrajudicial foreclosure if the parties agree in writing.

In Bosnia, Croatia, and Slovenia, the application and writ of execution need not identify the property that is to be executed on.  In Bulgaria, prior to seizure the enforcement agent specifies the objects to be enforced against.

In Bosnia, Croatia, and Slovenia, the writ of execution is to be served on the debtor in advance of seizure, though the court can order that notice be given at the time of seizure.

In Bosnia, Croatia, and Slovenia, the enforcement agent conducts the seizure by inventorying the property and leaving it with the debtor for safekeeping unless the court has ordered that the property be given to the creditor or a third party for safekeeping.  In Bulgaria, the enforcement agent conducts the seizure by inventorying the property and leaving it in possession of the debtor unless the debtor refuses to act as safeguard.  In such case the enforcement officer hires a guardian for the seized assets.

In Croatia, Hungary, and Slovenia, the enforcement agent conducts the appraisal unless the court orders that it be done by a court expert or special appraiser.  In the other surveyed countries, an expert will conduct the appraisal unless there is an established market price for the property.

In Bosnia and Croatia, the method of sale is public auction or private agreement, to be determined by the court.  In Bulgaria, sales of seized or attached property are carried out by a shop or commodity exchange, at a minimum price of the appraised value.  In Croatia, the minimum price is 2/3 the appraised value, and 1/3 the appraised value at the second auction or attempt at sale.  In Hungary, movable property must be sold by auction unless the parties agree to another method of sale.  In Slovenia, the enforcement agent determines the method of sale.

Sale of personal property stored at the debtor’s business or residence can be difficult and uncomfortable for potential purchasers.  Croatia and Bosnia have recently attempted to help courts, enforcement agents and creditors dispose of seized personal property.  Croatia enacted legislation for special warehouse stores to sell the property and Bosnia recently opened an auction center funded by USAID and commercial banks.  Neither Croatia nor Bosnia have been successful, since thus far creditors are not interested and in the case of Croatia entrepreneurs are not interested in opening the stores.

<    Use of Technology.  Enforcement in the countries surveyed would likely be improved by introducing a system for creditors to file petitions electronically.  Slovenia is introducing a system of electronic filing that is estimated to reduce the time to get a writ of execution in Lljubljana from three months to one week.  In addition, enabling asset searches through the Internet would cut creditors’ costs – this is done in Slovenia.

<    Backlogs in Enforcement Courts.  Most enforcement courts and judges in the countries surveyed have large case backlogs.[5]  One possible way to reduce backlogs would be to take more administrative and clerical functions away from judges.  For example, processing most applications for enforcement orders should be done by assistants, not judges.  This is the case in most Croatian courts, with judges only getting involved when there is a complex issue or a dispute (unfortunately there are many objections).  Romania turns over all decisions in the enforcement process to enforcement agents or notaries, with judges only taking part when there is a dispute.  This is in contrast to Bosnia, which requires court orders throughout the enforcement process, and Serbia, where judges may be handling too many procedures in the enforcement system. 

<    Support to the enforcement process from the police.  The police in each country have obligations to assist enforcement agents when needed to carry out enforcement actions.  Some jurisdictions within the countries surveyed do better than others, but in general the police are not as helpful and responsive as they need to be.  Ukraine might consider a different model: a separate court police force directly under the control of the court or enforcement agent.

<    Problems in service of process in enforcement.  Many debtors evade service, which causes a delay of enforcement in the countries surveyed.  In Croatia, service of a writ of execution is to be made at the address provided by the creditor; if unsuccessful it is made at the address of the headquarters set forth in the company register or pension agency; if this is unsuccessful it is made by posting at the court and considered served on the eighth day of posting. 

<    Inadequate access to information about the debtor’s assets.  Most of the countries have a procedure for the court to order the debtor to fill out a financial statement or appear in court to provide information about assets.  But this procedure is only effective if there is a real threat of sanctions for non-compliance or incomplete information.  It also seems to be more effective when the debtor is called into court to give the statement.  Private investigators can also be a source of information on debtors’ assets.  While there are private investigators in each country, only large creditors are using them to search for assets because of the cost.  In the U.S. the cost of basic investigations of assets is very low, and can even be obtained via Internet (see, e.g., www.assetsearches.com.  It is likely that such an industry will develop in Ukraine and elsewhere in the region, and it should be regulated.

<    Costs and Sanctions.  All surveyed countries provide that costs of enforcement procedures are paid in advance by creditors, but are collectible against the debtor from the proceedings of the execution.

Fines can be imposed by Bosnian, Bulgarian, and Slovenian courts against the debtor and third parties for failure to disclose information about a debtor’s assets, violation of a court order, concealing or damaging the debtor’s property, or hindering enforcement.  Croatian courts can impose fines for failure to comply with court orders, as can Hungarian courts, which can also order progressive increases for repeated non-compliance.  Romanian courts can impose fines against the debtor for delaying proceedings.

<    Provisional Remedies.  Each of the surveyed countries has procedures for creditors to obtain provisional remedies against a debtor, i.e. seizure of assets.  Such remedies can be obtained before a case is filed, during the underlying case in the trial court, or during enforcement proceedings.  Each country provides that a creditor can obtain a provisional remedy if it can prove a probability of success on its claim and a danger that collection of the claim will be endangered if no provisional remedy is allowed.  Creditors are also required to post a bond in an amount set by the court.  In Hungary, the provisional remedy can only be obtained when the claim is based on a written contract or acceptance of the claim.  Except for limited circumstances in Hungary, none of the countries appear to provide for a creditor to obtain a provisional remedy ex parte; notice of application must be given to the debtor.  Hungary provides for ex parte application for provisional remedies in certain intellectual property litigation.

<    Fraudulent transfer and hiding of assets.  None of the countries seem to have effective means to address the widespread problem of debtors’ fraudulent transfer of assets.  Except in Romania, which allows fraudulent transfers to be challenged in the enforcement case, in each country the creditor must address fraudulent transfer either by filing a separate case in civil court or by filing a bankruptcy case against the debtor.  In a bankruptcy case the burden of proof is often easier, although the case could be even longer than a civil court fraudulent transfer case.  Fraudulent transfer and hiding of assets can also be addressed in most countries by court imposed sanctions, but according to practitioners this is rarely effective.  In Hungary, a debtor could be charged criminally for a fraudulent transfer.

CHAPTER 1: ENFORCEMENT REGIMES

In this chapter we discuss and compare the enforcement systems in the six countries.  The discussion includes the documents that can be enforced, the property that can be executed on, and the procedures for enforcement.

A. Documents that can be Enforced through Execution Procedures

1.Bosnia & Herzegovina

In Bosnia, the following documents can be executed upon: court judgment or settlement, enforceable notary document, and authentic document (bill of exchange or check with protest, utility bills).  The enforceable document must include the name and address of the creditor and debtor, subject, type, scope of, and time for satisfaction of the obligation. 

Allowing enforcement of utility bills to go through the court enforcement system causes a huge backlog in the court.  The heating company cannot cut off service; it is required to send all of its claims to the court regardless of the amount owed.  Thus the Sarajevo Court Enforcement Division is clogged with tens of thousands of claims for small utility bills.

2. Bulgaria

In Bulgaria, the following documents can be executed upon: court judgments, employment accounting records, certain administrative decisions, drafts, bills of exchange and other securities, notarial documents indicating payment obligations, abstracts from the Special Pledges Register, and acts manifesting claims of the state.

But not all claims receive equal priority in the enforcement process.  Enforcement claims based on a court decision tend to receive a higher priority in the enforcement process than other claims as a matter of court practice.

3. Croatia

The following documents can be executed upon: court judgment or settlement; administrative proceeding judgment or settlement; and notarized documents.  An invoice or returned check can also be executed on and are known as “trustworthy documents”).  Settlements and notarized documents must be executable (due).  The document must name the debtor and creditor and the amount and due date of the obligation.

4. Hungary

In addition to court judgments, settlements confirmed by the court, arbitration court decisions or settlements, and notarized documents can be enforced without obtaining a judgment.  Documents that are enforceable in other European Union countries, e.g. judgments issued in E.U. countries, are also enforceable in Hungary.  Standard practice for Hungarian lawyers and financial institutions is to notarize loan agreements and other contracts so they can be enforced relatively quickly in the event of breach.

5. Romania

The following documents can be enforced by execution procedures: court judgments, arbitration awards, notarized documents for a debt due and payable, notarized promissory notes, judgments and other executable documents of European Union member countries.

6. Slovenia

The Execution Act provides for procedures that differ in some respects, depending on which of two general types of documents is being enforced.  The two types of documents are an executive instrument or an authentic document. 

An executive instrument includes a final judgment, court settlement, executable notarial deed, or other decision or deed as defined by law.  It must state the creditor, debtor, obligation, and time for performance.  Enforcement of executive instruments is fairly efficient, and it normally takes a year or less to obtain payment.

An authentic document includes an invoice, bill or check, public document, or confirmed statement of outstanding debts.  If maturity of the debt is not evident from the authentic document, the creditor must submit a written statement of the maturity date and that the debt is outstanding. 

B. Commencing Enforcement Procedures

1. Bosnia & Herzegovina

A creditor commences enforcement procedures by filing a motion for enforcement.  The motion must contain a request for enforcement, an enforceable or authentic document, names of the creditor and debtor, the claim, and the means and object of enforcement.  The motion is served on the debtor. 

The debtor may file an opposition to the motion.  The creditor can file a reply to the opposition.  Typically a hearing is only held when the court does not have enough information from the Motion, Opposition, and Reply to make a decision. 

The court must decide on a motion for enforcement within eight days of the hearing.  The writ of execution must refer to the enforceable or authentic document, e.g. the judgment, the claim, the means and object or enforcement, and other information necessary for execution.  It must be served on the creditor and debtor.  When it involves personal (moveable) property it shall be served at the time the first enforcement is conducted.  In execution on real property the court will also enter a notice of enforcement in the Land Book.

When a creditor seeks to execute on funds or assets owed to the debtor, the writ of execution shall also be served on the debtor’s debtor.  Where the claim is to be satisfied on jointly held property, all joint or common owners shall be served with the decision on enforcement.  A writ of execution for execution on personal property is forwarded to enforcement agent to execute. 

One problem with enforcement in Bosnia is that the creditor may have enforcement actions against different items of the debtor’s property in several courts.  The venue for enforcement against real property is the court in whose territory the property is located.  The venue for enforcement against personal property is the court in whose territory the property is located. 

The procedure to obtain a writ of execution usually takes three or four months, though it can be much faster in smaller courts. 

2. Bulgaria

The creditor requests that the court issue a writ of execution. Upon review and determination of the propriety of the request, the court issues the writ.  The creditor’s motion need not be served on the debtor.  The creditor presents the writ of execution to the private or public enforcement agent and identifies the manner of performance; the creditor may later point out other methods or assets available for satisfaction of the debt.

Upon receipt of the creditor’s request the enforcement agent sends the debtor inviting voluntary performance within seven days.  Upon receipt of this request, if the claim is based on a non-judicial document, the debtor may within that seven-day period present objections to the validity of the debtor on which the writ is based, thereby interrupting the enforcement process; or the debtor may challenge the execution by bringing a separate action in court.  Enforcement may proceed only after the court’s resolution of the objection to execution.

3. Croatia

The court issues a writ of execution in response to a creditor’s application, which can be made by mail.  The application must include the names of the creditor and debtor, the claim, the asset(s) to be executed on, and must reference the document on which execution is based.  A claim based on a “trustworthy document” must contain a request that the court order the debtor to pay the claim within eight days, along with an application for execution.  In most cases a court clerk will review the application.  If there is a condition precedent for enforcement of a document, the execution court can make a determination.  Where the facts are contested, the court can ascertain the facts and make a ruling.  However, this procedure often causes significant delays.

The procedure for issuance of a writ of execution is fast and efficient in smaller courts; but in Zagreb Court and some of the larger courts there is a large case backlog and issuance of the writ of execution is often delayed. 

4. Hungary

The creditor submits the request for writ of execution to the court along with the document to be enforced and a statement of the amount owing.  The court then issues a writ of execution, which goes to the enforcement agent for enforcement.  Monetary claims against companies can also be enforced through a prompt collection order that allows a debt to be collected through the banking system without filing a judicial enforcement procedure in the court. 

According to the practitioners we interviewed, the process works well, and there is little delay in most jurisdictions in obtaining the writ of execution. 

5. Romania

The creditor files the application for writ of execution with the court enforcement officer.  The court enforcement officer then files with the court the creditor’s application and a writ of execution.  The court makes a decision without appearance by the parties, and includes an “enforcement formula” (a stamp that is affixed by the court on an enforceable court judgment and which acknowledges that the relevant judgement is enforceable).  Approval of a writ of execution is not subject to appeal; rejection of a writ of execution must be appealed by the creditor within five days.  In some cases the trial court will give a deadline for payment, and enforcement procedures cannot be initiated in the enforcement court before such deadline, unless the enforcement court orders immediate enforcement based on a danger that the debt will not be collected if enforcement is delayed (based on transfer or waste of assets, etc.).

Prior to executing on assets, the debtor is notified with a summons that includes the name and address of the debtor, writ of execution, deadline for voluntary performance of the obligation and consequences for failure to do so.  If the debtor fails to perform within the deadline, the enforcement officer shall immediately proceed to enforcement.

There is a special procedure for money debts due, e.g. accounts receivable.  If the debt is recognized by the debtor in a written document and is due and not challenged, a creditor can go to court and the court will issue a writ of execution without any need to analyze the merits of the case.  In such cases there is no need to pay a stamp duty (normally 1% of the value of the claim).

6. Slovenia

The creditor files an application for execution that must identify the creditor, debtor, executive or authentic document, debtor’s obligation, execution measure requested, property subject to execution (thought moveable property need not be described in detail), and proof of payment of court fees.  An application based on an authentic document must contain a petition to the court to impose an obligation on the debtor to pay the debt within eight days of service of the writ of execution.  If a creditor enforcing an authentic document applies for execution on bank accounts it need not provide details on the bank or account number; instead the court makes inquiry to discover these details after issuing the writ of execution.

The court’s writ of execution shall specify the creditor, debtor, document enforced, debtor’s obligation, execution measure, property subject to execution, and other information necessary for execution.  The order will also appoint an enforcement officer.  A order based on an authentic document shall impose on the debtor an obligation to pay the debt, plus costs.

The court shall serve the order for execution in which an execution officer is appointed, or the order on the appointment of an execution officer, on the execution officer together with copies of all the documents necessary for carrying out the execution.  The court shall also serve the order for execution upon a money claim issued on the basis of an executive instrument on the debtor's debtor, including a bank in which the debtor has an account.

Court expert associates and court clerks may conduct execution proceedings and issue orders permitting execution for the recovery of money claims, orders permitting execution on the basis of authentic documents and orders and orders on advance payments, security, costs of the procedure and court fees.

Slovenia is moving toward electronic filing of applications for execution.  It was estimated that electronic filing will reduce the time for obtaining execution orders from the current three months to one week.

Slovenia has an expedited procedure for monetary claims that are due and supported by an authentic document (the original or a certified copy).  The court will not examine the merits of the claim. If the claim fulfills the procedural conditions for admissibility, then the court issues the payment order.  No appeal is allowed against the order dismissing the application for issuance of a payment order.  The statement of opposition shall be filed within 8 days from the serving of the payment order to the defendant.  When opposition is filed the case automatically proceeds to civil court as a regular case.  The payment order is enforceable, if the defendant fails to contest the claim within eight days from the service of the payment order). In disputes involving bills of exchange or cheques such term of payment is three days.  Despite the potential for an expedited enforcement, a creditor seeking to enforce authentic documents can still find itself in lengthy and expensive proceedings, since an objection to the validity of the document can cause the case to go to trial court for a proceeding on the merits. 

C. Types of Property that can be Subject to Execution Proceedings

1.Bosnia & Herzegovina

Any real or personal property or any right that is not exempted by law can be executed on. 

Jointly owned property can be sold, and the court must order that the property be offered for sale both in its entirety and as a joint ownership share.  Subsequently the court will decide whether the property will be sold in its entirety or only the joint ownership share of the debtor, based on whether the sale price would be “considerably higher” if sold in its entirety.  The decision is based on the bids made for joint and separate shares at the foreclosure auction.  Joint owners who are not debtors are notified of the sale and may request enforce their rights or contest the procedure.

2. Bulgaria

Assets available for seizure in the enforcement process include immovable property, movable property and receivables.  Receivables include wages and bank accounts.  There are no limits to ownership of immovable property, which includes both land and structures.  As discussed below, there are some difficulties in locating movable and immovable property of a debtor. 

There is no specific provision for enforcement against intellectual property.  To date, no effort to enforce against royalties or similar income from intellectual property has apparently been attempted.

3. Croatia

Real and personal property can be subject to execution proceedings.  If a creditor proposes to execute on a number of assets, the court will, upon request of the debtor, restrict enforcement only to some of the assets if they appear to be enough to satisfy the claim, or determine other assets to be levied upon.

4. Hungary

A piece of real property owned by the debtor may be subject to execution proceedings regardless of its character or type of management or any rights or restraints encumbering it.  A piece of real property may be sold, however, only if the claim cannot be fully satisfied from other assets of the debtor or the claim can be satisfied from other assets only after an unreasonably long time.

Personal property owned by the debtor is subject to execution proceedings. 

A creditor can enforce its claim against intellectual property.  It is registered and can be pledged as collateral, or a writ of attachment can be registered against the property.  A creditor can also attach and receive the royalties or sell the copyright or patent itself.

It should be noted that a creditor can also file liquidation proceedings against an insolvent business.  In such case, individual execution is not possible, but proceedings are conducted by a bankruptcy estate administrator.  The administrator collects the debtor’s receivables and liquidates the debtor’s assets (including assets pledged as security).  Liabilities are satisfied in accordance with priorities set forth in the Bankruptcy Act (administrative, secured, unsecured, etc.). 

5. Romania

A creditor can execute on all income and assets, with some exemptions.

6. Slovenia

A creditor can execute on real or personal property, limited only by applicable exemptions.

A notarial deed on immovable property can be directly executed on as long as it includes the names of the creditor and debtor, a description of the property, the amount and due date of the secured claim, or data forming the basis on which the amount and due date can be suitably determined, and a statement from the debtor that it agrees with the entry of the lien and carrying out of execution on the property and turnover of the property within one month of the execution sale.

A directly executable notarial deed establishing a lien on movable property, a claim, or partnership right must include descriptions of the creditor and debtor, the legal basis, a description of the property, claim, or right, the amount and due date of the secured claim, or data forming the basis on which the amount and due date can be suitably determined, and a statement from the debtor that it agrees with the entry of the lien and with the repayment of the secured claim after it falls due from the pledged property.

D. Procedures for Enforcement

1.Bosnia & Herzegovina

In addition to the three or four months to obtain the order for enforcement, it takes six months to one year to execute on the property, sometimes longer when the creditor is executing on immovable property.

Investigation of Assets

It is difficult to locate real property that is owned by a debtor.  There is no national real property register, and the information from the various courts (where registration takes place) cannot be searched on line.  It is possible to search in person in each court by name of owner, a difficult process in a country with dozens of municipal courts and poor transportation systems through mountainous terrain. 

It is also difficult to locate personal property.  The motor vehicle registry is not open to public access and the pledge registry only provides information on pledged property (in addition to serving as a notice and priority system).

Bank account information on a debtor can be located by inquiring at the Central Bank Register of Accounts.  This costs about U.S. $5.  This will reveal the account number but not the amount held in the account.

The creditor may petition the court to require the debtor and/or third parties to disclose information about the debtor’s assets (a “Disclosure Order”).  The petition should be included in the motion for enforcement or can be made separately if a previous means for enforcement failed.  To obtain an order for third parties to disclose information, the creditor must demonstrate that it is likely that the third parties possess the information.  The court will often send the debtor or third party a form to fill out stating the assets, income, their whereabouts, and source, along with a deadline for return of the statement.  The form must be signed and delivered to the court.  The court may request the debtor to give a statement at a hearing instead of filling out the form.  A debtor has 15 days to make the statement.  Fines may be imposed for failure to comply with the order, and a person or entity providing false information can be held criminally liable.

There are some private investigators who could help locate assets.  But this is not an established practice, mainly because their services are seldom cost effective, i.e. the assets are valuable enough to justify the investigation cost. 

Service of Process

Most applications or motions by a creditor are made ex parte.  The court notifies the debtor after its decision is rendered.

When necessary, the enforcement agent can enter and search a debtor’s property.  An enforcement agent can take actions to remove a person obstructing his work and can obtain assistance from the police. 

Objections, Appeals and Postponements

An objection can be filed against all decisions by the court.  The creditor’s response to objection must be filed within three days from delivery of the objection.  There is no time limit for the court to render its decision on the objection.  If the court accepts the objection it shall dismiss the enforcement completely or partially. 

A third party with a right to an object of enforcement can file an objection against the enforcement.  The objection can be filed prior to the completion of the enforcement proceedings.  The court shall serve the objection on the creditor and debtor.  The creditor’s response to a third party’s objection must be filed within eight days of service of the objection.

Co-owners of real property can request return of items by posting security and initiating a lawsuit against the creditor to prove their right to the property.  The court can also make the determination within the enforcement action.

The debtor or a third party can file a motion for counter enforcement, which seeks return of what was obtained through enforcement.  The motion can be filed within 30 days of the date the debtor became aware of the grounds for counter-enforcement.  The creditor will have three days to respond.

Appeals can only be made from a decision on an objection.  In the past, objections and appeals were abused by debtors to delay enforcement cases.  But recent amendments to the Law on Enforcement abolished this ability and enforcement actions keep moving forward regardless of an objection or appeal being filed.  There are no procedures for expedited appeals in enforcement cases.

Exemptions

The following items are exempt from execution: items necessary for daily needs, food and fuel for three months; cash from exempt claims; cash up to the exemption amount; personal items including war decorations, wedding rings, etc.; income derived from lawful support and tax claims; claims for bodily injuries; temporary unemployment benefits; child benefits; scholarships are exempt up to half.  A farming parcel smaller than 5,000 square meters is exempt.

Payment of Costs and Sanctions

The creditor is entitled to costs of enforcement.  A request for compensation of costs must be submitted no later than 15 days after the conclusion of the enforcement proceedings. 

Fines for non-compliance can be imposed against the debtor and other parties:

<    Fines can be imposed against a debtor for costs incurred to carry out enforcement, if a debtor fails to comply with repeated court orders or violates a prohibition.

<    Fines can be imposed against responsible persons in a legal person for failure to disclose information about the debtor’s assets, violation of a court order or prohibition, concealing, damaging, or destroying the debtor’s property, or hindering enforcement.

The court determines the amount of the fine based on the debtor’s financial capacity, its conduct, and other relevant circumstances.  Fines can range from 100 KM to 5,000 KM against natural persons and 1,000 to 100,000 KM against legal persons.  Fines can also be levied against natural persons responsible for actions of a legal person.

Fraudulent transfers are addressed through civil and/or criminal actions, separate from the enforcement action.  They can be voided.  Provisions related to fraudulent transfers are in the Law on Obligations. 

Provisional Remedies

A creditor can get an order for seizure of assets before or during a court case, or after a decision has been entered.  The creditor must prove a probability of success on its claim and a danger that the collection of the claim will be endangered if no provisional remedy is allowed.  The creditor will need to post security.

Enforcing Liens and Judgments on Movable Property

The procedure for execution on moveable property is: seizure, appraisal, sale, and payment to the creditor.  The creditor’s motion for enforcement and the court decision need not state the name of all the property to be executed on.

If possible, the enforcement agent will serve the decision on enforcement on the debtor before a seizure is commenced, i.e. provide advance notice of a seizure.  However, the court can decide that notice shall be given at the time of seizure.

The enforcement agent makes an inventory for seizure and leaves the seized property with the debtor for safekeeping unless the court has, on motion of the creditor, ordered that the objects be given to the creditor or a third party for safekeeping.  Cash, securities, and items of significant value shall be kept by the court for safekeeping.  If the seizure is unsuccessful the court will notify the creditors, who can file a motion for another seizure within three months.

The sale can take place 15 or more days after seizure, or sooner if the items are perishable or may substantially drop in value.  The method of sale is public auction or private agreement, which shall be determined by the court.  The property may not be sold by private agreement for less than one third of the appraised value.

Payment of creditors shall be made in order of priority after payment of costs.

Where a creditor has a claim to assets held by or claims against a third party, the creditor must make a motion to have its claim satisfied by transfer of the assets.  The court makes a decision that is served on the debtor’s debtor.  The court will order the debtor’s debtor to safeguard or deliver the items for safekeeping.  The sale can take place 15 or more days after seizure, or sooner if the items are perishable or may substantially drop in value.  The method of sale is public auction or private agreement, which shall be determined by the court.  The property may not be sold by private agreement for less than one third of the appraised value.

With assistance from USAID, the Bosnia Association of Commercial Banks has recently set up an auction center for sale of seized property.  However, the auction center has had very few auctions and has sold only about 10,000 KM of property.

Enforcing Liens and Judgments on Immovable Property

The procedure for enforcement against immovable property is seizure, appraisal, inspection and protection, sale, distribution. 

After the writ of execution is registered in the land registry, the court determines the method for appraisal.  It usually takes about a month to get the appraisal completed.  Any person with a lien on the property that takes precedence over the creditor’s lien may propose dismissal of enforcement if the appraised value does not cover a portion of the amount of the creditor’s claim.

Once the court determines the value of the property it will issue a conclusion that sets forth the value of the property and the method, time, and place of the auction.  The court also designates the time and manner for inspection of the property by the creditor and potential buyers.  The court can order removal of the debtor and others from the property and other measures to protect it.

The sale will take place 30 days or more after the posting of the conclusion on the court notice board.  It will be delivered to the parties and others with interest in the property.  The sale is to be carried out a public auction in the courthouse.  Bidders at the sale must post security, with the exception of the creditor and lienholders whose claims equal the amount of security.  The amount of security is the lesser of 10 percent of the assessed value of the property or 10,000 KM (5,000 Euros). 

The auction process is as follows:

<     At the first auction the sale amount must at least partially satisfy the creditor’s claim and be at least half of the appraised amount.

<     If the first auction is unsuccessful, a second auction will be held where the sale amount must be at least 33 percent of the appraised value.

<     If the second auction is unsuccessful, a third auction will be held at which the property can be sold at any price.  If there is no sale at this auction the court will dismiss the enforcement.

Once the purchase price is delivered the court shall grant the property to the purchaser.  A sale extinguishes all liens on the property.  But easements and encumbrances continue after the property is sold, as do existing contracts for rent or lease that are entered into the Land Register.  The court can order that the property be vacated by the debtor, and the debtor or other persons without legal basis for occupancy of the property can be evicted.

At a Distribution Hearing, payment of proceeds is made for costs and to lien holders and the executing creditors in order of priority pursuant to a Decision on Settlement.  Where there are multiple liens on the property, third party lien holders will be paid in the enforcement procedure in accordance with the rules on priority.

Parties and lien holders who have priority rights or the same rights to have their claims satisfied as the judgment creditor, may agree in writing until the time of the sale that the sale be consummated by private agreement within a specified deadline. Sale by private agreement may be made through an authorized real estate agent, court referee or in some other way.  A person entrusted with a sale based on the court’s conclusion shall enter into the agreement on behalf and for the benefit of a judgment debtor. 

The debtor can file a motion requesting that enforcement be ordered against other immovable or moveable property based on evidence that: execution on the proposed real property would be a hardship; there was just cause for failure to previously sell the proposed other property to pay off the creditor; the claim of the judgment creditor can be completely settled from the other object of execution that is proposed; and execution will not be significantly prolonged, complicated expensive for the creditor due to such change.  The motion must include proof of ownership of the other property.  The motion must be served within three days after service of the decision on enforcement.  The creditor can respond to the motion within three days after service.

In general, execution on real property is slower and more expensive than it should be.  A major problem is the system for three auctions.  There does not appear to be any good reason for holding more than one auction, as has been demonstrated by one auction sales under the bankruptcy law, which appear to obtain higher returns if the one auction is efficient and transparent.  In addition, as with all enforcement processes in Bosnia, there are too many procedures involving the court.

There are major problems in executing on real property in some jurisdictions.  Nationally only 30% of property is registered in land books.  In such cases, the creditor must take action to register the property, which includes publication of the action and two, three, or six months notice for objection by any property holding a claim.  The procedure for enforcement against property not entered into a land register includes specifying in the motion for execution the location of the real estate, its name, boundaries and size, as well as the cadastral survey data pertaining to that real estate if entered into the land register.  A hearing involving interested parties must be held after notice and opportunity for objection. 

Enforcing Liens and Judgments on Money and Instruments

Bosnia has specific procedures for execution on monetary claims, securities, and income.  For execution on a debtor’s monetary claim, jurisdiction is the court territory in which the debtor’s residence is located so there isn’t the multiple venue problem that can affect execution on real property and personal property. 

When a creditor seeks garnishment of income the court’s decision orders the employer to pay the amount of the garnishment to the creditor.  Garnishment is limited to 50% of wages.  The employer is required to deduct the amount and send it to a specified account, and to provide a report to the court of each payment made.  An employer who fails to comply can be held liable for damages caused to the creditor.

The procedure for seizure of funds in bank accounts is:

<    The creditor makes an application for an order for seizure of funds.  The application must include the bank and account number, which as discussed above can be obtained from the Central Bank.  Where a debtor has multiple accounts, the creditor must list the priority of seizure.

<    The court orders the bank to transfer the funds to an account of the creditor.  The decision includes the numbers of the debtor’s creditor’s bank accounts.  It is sent by the court directly to the bank.

<    The court also orders the bank to disclose the debtor’s 30 day transaction history if the funds are insufficient for satisfaction of the creditor’s claim.

<    The court can also order the bank to pay amounts in installments.

<    A bank that does not comply with the court’s decision or other orders will be held liable for damages inflicted on the creditor.

Execution against securities and ownership is done by seizure, appraisal, sale, and payment to the creditor.  Seizure of securities is done by service of the decision on enforcement on the Register of Securities.  Publicly traded shares must be sold through a broker designated by the court.  Unlisted shares are sold through public auction or private agreement.  A creditor can request that the shares be transferred to it in lieu of sale and payment.  Securities shall be transferred, but if the value of the securities exceeds the amount of the creditor’s claim the creditor must post security ensuring that the excess amount will be delivered to the court.  Delay in cashing in on a transferred claim can lead to liability to the creditor.

For execution against intellectual property a creditor must follow the rules governing the sale of movable property.

2. Bulgaria

During the last few years, Bulgaria has made significant reforms in its system for enforcement of judgments, including introduction of private enforcement agents and streamlined procedures for execution on movable property.

Investigation of Assets

At present there is no provision for examination of the debtor to identify the debtor’s assets. Thus, there is no opportunity after judgment for the creditor or the enforcement agent to submit oral or written queries to the debtor, nor is there any examination of books or records.  Proposals to alter the present limitations on examination of the debtor are currently being prepared for presentation to the legislature.

In attempting to use public registries or records to locate debtor’s assets, the enforcement agent must submit a letter to the appropriate agency on behalf of the creditor to authorize release of information.  Immovable property registers are generally considered accurate, but are not comprehensive.  Registers are local, not national, and local registries are not linked around the country; there are 128 local property registries, which are linked to regional courts.  There is a single database in the Ministry of Justice, but this can only be accessed from the local jurisdictions.  However, there are plans currently in development to make this information centrally available.  An obstacle to these plans is that only a portion of the database is in electronic form, and all transactions prior to 1991 are in paper format only.  Files can be searched by owner’s name.

It can be difficult to locate personal property.  While registries exist for vehicles, it is difficult to locate the vehicles for seizure.  No legal mechanism exists to find the vehicle, nor do the police place liens to prevent transfer or registration.  The company register provides no information on specific assets owned by a debtor firm. 

Employment contracts are required to be registered with the national social insurance fund, facilitating their identification; reportedly there is not significant evasion of this requirement.  While there is no mechanism available for locating the bank accounts of individuals, bank accounts of firms are not difficult to locate.  The enforcement agent sends a notice to the bank, freezing the account up to the value of the judgment.  At that point, the bank is required either to pay the available funds to the enforcement agent up to the judgment amount, or state that there is not enough money in the account to satisfy the judgment.  While the bank is required to time-stamp the freeze order when received, it is reportedly possible for funds to be withdrawn by the debtor even after the bank’s receipt of the freeze order, in part because it is difficult to prove when the transaction from the debtor occurs.

Service of Process

Notification to the debtor of the execution procedure is made by the enforcement agent by “inviting him within seven days to voluntary performance” of the writ of execution. This occurs after the creditor has presented the request for execution to the enforcement agent on the basis of an appropriate order. The notice to the debtor must specify the writ to be enforced, the name and address of the petitioner and a warning that if voluntary performance within the allowed period is not completed, compulsory execution shall proceed.

The notice is to be served upon the debtor at the debtor’s address of record for the litigation. Should the debtor have changed his address without notifying the court, the notice shall be attached to the lawsuit file and is thereby deemed to be served.

Objections, Appeals and Postponements

Any party to the proceeding may enter objections to the actions of the enforcement agent, including third parties if enforcement proceeds against an object in their possession.  The petition expressing the objection is presented to the enforcement agent, who in turn must submit the petition to the court within a defined period.  Other parties to the enforcement action must also be notified. All objections to the procedure of the agent are consolidated into a single petition.

Petitions are reviewed by the court in closed session unless testimony is required to resolve the claim.  Petitions submitted by third parties are presented in a hearing to which the parties are summoned. The court must announce its decision within thirty days.

Exemptions

Execution may not be directed to the following property of the debtor:

• Food necessary for the debtor and his or her family for one month;
• In the case of farmers, growing crops or other agricultural goods in production, a limited number of farm animals and the food needed for their sustenance until new crops are gathered, and a limited amount of land;
• Combustibles needed for heating, cooking and lighting for a period of three months;
• Machines, instruments, tools, and books the debtor needs in the individual exercise of his or her trade;
• The lodgings of the debtor, though if the lodgings are deemed to exceed the needs of the debtor and his or her family, a part of the lodgings may under some circumstances be sold;
• Certain objects of habitual use and other rights specified administratively, and other objects and rights exempted from seizure by other legislation.

Payment of Costs and Sanctions

The creditor is entitled to costs of enforcement.  A request for compensation of costs must be submitted no later than 15 days after the conclusion of the enforcement proceedings. 

Fines for non-compliance can be imposed against the debtor and other parties:

§     Fines can be imposed against a debtor for costs incurred to carry out enforcement, if a debtor fails to comply with repeated court orders or violates a prohibition.

§     Fines can be imposed against responsible persons in a legal person for failure to disclose information about the debtor’s assets, violation of a court order or prohibition, concealing, damaging, or destroying the debtor’s property, or hindering enforcement.

The court determines the amount of the fine based on the debtor’s financial capacity, its conduct, and other relevant circumstances.

Provisional Remedies

The plaintiff is entitled to seek provisional remedies to secure the claim at any point in the litigation process, including prior to filing of the claim in civil court.  The request for a provisional remedy will normally be granted only if the plaintiff will otherwise find it impossible to enforce the claim or will be greatly hindered in doing so.  In addition, the claim must be supported by written evidence, and the plaintiff must post a guarantee in an amount specified by the court.  The guarantee must be in the form of cash, government securities, or mortgage.

The provisional remedy can attach the defendant’s property, attach the defendant’s movables or receipts, and can provide other remedies as ordered by the court. 

A court ruling for a provisional remedy shall be subject to appeal for a limited time period.  Provisional remedies can be revoked upon the request of the defendant, upon the decision by the court that the reason for the securing measure no longer exists.

Enforcing Liens and Judgments on Movable Property

The summons to the debtor for payment is issued by the enforcement agent, and it must specify the objects to be enforced against.  Upon attempting execution, the enforcement agent must list the objects of seizure, specifying the executive writ, a detailed description and valuation of the objects, and the objections of the parties and the claims of third parties to the objects.  The listing must specify whether the property has been left in the possession of the debtor, and must set out the time and place of sale if the claimant requests it.  This constitutes notice of the pending sale to the debtor.

The property seized may be assessed by the enforcement agent at the market price, or an expert assessor may be brought in within seven days after the listing for assessment.  A guardian for the seized assets may also be hired if the debtor refuses to act as safeguard.  The expenses of both the expert assessor and the guardian are charged to the creditor by the enforcement agent.

Sales of seized or attached property are carried out by a shop or commodity exchange.  Five percent of the sales price is paid to the shop or exchange for the sale.  The enforcement agent may sell items valued less than a statutory amount may be sold by the enforcement agent.  Sale is to be at a price equaling the assessed valuation.  If items are not sold by the shop within three months, the attachment is lifted and the items returned to the debtor, unless the claimant agrees to take the items instead of payment, at a price equaling valuation, or unless the claimant request the conduct of a new sale.  The new sale follows the same rules, but at a price 80% of valuation.  If this sale is not successful, the items are returned to the debtor and attachment lifted.  The completed sale cannot be appealed or contested in any way.

Enforcing Liens and Judgments on Immovable Property

After the expiration of the period for voluntary execution, the enforcement agent proceeds formally to list the property for sale pursuant to the summons.  First the enforcement agent must determine that the debtor is the rightful owner of the property through checks of the registers or through informal means such as questioning of the neighbors.  When no certain data as to ownership exists, the fact of possession may be taken into account.  The property must be fully described in the listing, including the legal location of the property, all mortgages and burdens on it, and taxes due, determined from data from the recordation office and the national revenue agency.  The property is then assessed by the agent with the assistance of one or more expert assessors.

The property is to remain in the possession of the debtor until time of sale.  The debtor is required to exercise due care, and surrender the property in the condition in which it was at time of listing.  If the debtor does not exercise his duties adequately, the enforcement agent may appoint a third party to manage the property until sale.

The enforcement agent then issues a notice of sale, posted in the agent’s office, on the premises of the municipality, as well as at the property itself, at least one day prior to the date of sale. The property is to be opened to be viewed by prospective buyers.

The sale is to be performed in the office of the enforcement agent.  It continues for one month and ends on the date designated in the notice of sale.  A buyer deposits 10% of the valuation with the agent to participate in the sale.  Each bidder indicates his bid in writing and submits it in a sealed envelope along with a receipt for the payment of an advance binding sum.  Offers are filed at the office of the enforcement agent.  The debtor, the debtor’s legal representative, and officials of the enforcement agent’s office may not participate in the bidding.  On the day after bidding closes, the agent discloses the offers in the presence of bidders.  The bidder who offers the highest price shall be the purchaser; in the case of equal high bids, the agent determines the buyer by lot from the high bidders.  The winner must pay in full within five days of the opening of bids, deducting from the amount due the initial 10% participation deposit.

If no valid offers are made, the claimant may within seven days of notification request that he be declared as buyer in return for his claim at a value equal to the valuation, or the claimant may request a new sale. The new sale takes place under the same procedure no less than six months after conclusion of the first sale, and the opening price is to be 80% of the original valuation. If the property is not sold on this occasion, the property is returned to the debtor without burden on the property.

Enforcing Liens and Judgments on Money and Instruments

Enforcement against all claims and instruments held by the debtor proceeds by a notice to the third party debtor, sent at the same time as the summons for voluntary performance, notifying the debtor that a specific claim is to be enforced against.  Payment of the debt to the debtor is prohibited by the notice.  As of the date of receipt of the notice, the third party is obligated as guardian of the items owed by him.

The third party debtor must within three days notify the enforcement agent as to the validity of the claim and whether there are any competing claims against the same debt. If there is no protest against the claim, the third party debtor should turn over the amount to the account of the enforcement agent.

The two principal forms in which receivables are seized are through garnishment of wages and bank accounts.  Both these mechanisms work reasonably well.  For execution on bank accounts, the enforcement agent sends a notice to the bank, freezing the account up to the value of the judgment.  At that point, the bank is required either to pay the available funds to the enforcement agent up to the judgment amount, or state that there is not enough money in the account to satisfy the judgment.  While the bank is required to time-stamp the freeze order when received, it is reportedly possible for funds to be withdrawn by the debtor even after the bank’s receipt of the freeze order, in part because it is difficult to prove when the transaction from the debtor occurs.

If the claim is for employment wages, and the debtor has changed his place of employment, the notified employer must forward the notice to the employee’s new employer, and the notice applies against the new employer.

Registered material securities shall be listed and seized by the enforcement agent and deposited in a bank. The issuing company shall be notified and the seizure applies against the issuer as well.  Dematerialized securities are levied upon by submission of notice to the Central Depository.  Seizure of company stock is levied through submission of notice for entry into the Commercial Register for recordation.

3. Croatia

Enforcement proceedings are supposed to be urgent proceedings.  However, they are often delayed in the larger courts such as Zagreb Municipal Court, because of large case backlogs.  The larger courts have special execution departments or judges, but practioners informed us that this hasn’t helped much.  In smaller courts the same judge hears both the underlying case (if any) and the enforcement proceeding.

Execution of a money judgment or unsecured debt on moveable property and immoveable property follows the same procedures that are used for enforcing liens.

Croatia has developed some procedures that are working well to allow creditors to quickly and inexpensively collect debts.  These include special promissory notes (“zaduznica”) between businesses that can be levied by the creditor directly upon identified bank accounts without the need to obtain a writ of execution.  Signatures on the document must be notarized.  If there are insufficient funds in the bank to satisfy the debt, the creditor must go to the court to obtain a writ of execution to levy on other assets. 

Despite having a Law on Execution that has been recently amended to streamline processes and procedures, the numerous grounds for objections, appeals, and exemptions (see below) cause many enforcement proceedings to be very slow.  Debtors and their attorneys know the “tricks of the trade” to abuse these procedures and make enforcement difficult if not im