Costs of debt enforcement without bailiffs

Service

The basic and most important obligation of the debtor is, as a rule, the payment of the debt. Not always everything goes according to our plan, which is why there may be a situation where, for reasons beyond their control, the debtor will not be able to pay the debts on time. In such a case, it must take into account the increase in the amount due by statutory or contractual interest for delay in repayment. In addition, a significant delay may result in the initiation of enforcement proceedings against him, which will significantly increase the amount of liabilities and thus make it difficult to pay off the debt. In such circumstances, the debtor should consider paying the debt directly to the creditor, without involving a bailiff in the case. The costs of debt enforcement without the bailiff will certainly have a positive effect on the amount of debt and the possibility of its repayment.

The initiation of enforcement proceedings is always associated with the obligation to incur additional fees. However, their amount depends on the willingness and ability of the debtor and the goodwill of the creditor. The costs of enforcing claims without the bailiff will be lower, if only because the bailiff will not be forced to carry out many time-consuming activities required by the law (including bailiffs in the field). It should be remembered that the mere repayment of the debt or the conclusion of a repayment agreement is not enough. The creditor should obligatorily submit an application to the bailiff to discontinue the enforcement proceedings or to present an agreement with the debtor. Only in such circumstances will the bailiff depart from imposing the enforcement fee and will limit himself to the lower commission fee. The exception is the discontinuation of the proceedings due to the creditor's inactivity.

How much are the enforcement fees imposed by the bailiff?

The amount of fees and the method of calculating them are regulated by the Act on bailiffs 'costs (hereinafter referred to as the bailiffs' costs act). This is a fairly recent act - it entered into force on January 1, 2019, replacing the Act on court bailiffs and enforcement. The new legal act introduced many simplifications as well as significantly reduced the enforcement costs. Moreover, it established that all fees would go directly to the State Treasury, and not to bailiffs, which is to significantly reduce the percentage of defaults on the part of the latter. Despite the above, such fees are not the lowest, therefore the repayment of receivables without the bailiff still seems more "profitable" for the debtor.

The new act standardized the enforcement fee in cases concerning the enforcement of cash benefits. This is a significant simplification, because according to the previous act, these fees ranged from 5 to 15%, depending on the method of enforcement. The statistics show that the average "remuneration" of bailiffs was 12.5%. The current rate - 10% - therefore seems to be a significant reduction in rates.

Of course, not all debtors will be satisfied with the statistical reduction, because the new rate will increase the costs of the most frequently performed executions on retirement pensions, disability pensions, remuneration for work or bank accounts. However, it will lower the fee rate for bailiffs' enforcement, among others from real estate.

Pursuant to the new regulations, the debtor will also be able to take advantage of the preferential fee rate, which is 3% of the value of the liability. However, it will only be possible if the debt is repaid within one month from the moment the debtor is served with the notice on the commencement of bailiff enforcement.

The Act on Bailiffs' Costs introduces a new type of fee, which is the fee charged on an application for the initiation of enforcement of the release of a movable property. Each application is required to pay PLN 400.

Additionally, pursuant to Art. 30 of the Act on bailiffs' costs, in the event that enforcement is initiated obviously unintentionally, the bailiff will charge the creditor with a fee of 10% of the enforced amount.

The bailiff's fee for the discontinuation of enforcement proceedings and the liability of the creditor

As it was indicated at the beginning, the "omission of the bailiff" in the execution of the bailiff takes place as a result of the discontinuation of the enforcement proceedings. This may be done at the request of the creditor, as a result of the withdrawal of the enforcement application or in the event of the creditor's inactivity in accordance with Art. 824 § 1 point 4 of the Code of Civil Procedure Act (hereinafter referred to as the CCP).

It should be emphasized that in comparison to the provisions of the Act on Bailiffs and Enforcement, the new regulation radically changed the principle according to which the debtor had to bear all the costs of the enforcement. The provision of art. 29 of the Act on bailiffs' costs, depending on the good or bad will of the creditor and the debtor, as well as their activity in cooperation with enforcement authorities, imposes an obligation to pay a proportional fee on a given party.

When the enforcement proceedings are discontinued through the fault of the creditor, the bailiff will charge the creditor with enforcement costs in the amount of 5% of the value of the outstanding benefit. In accordance with the justification of the draft of the new act, the legislator decided to introduce such a solution, as it considered that the previous regulation allowed the use of enforcement proceedings to harass debtors - there were situations when creditors initiated enforcement under one writ of execution several times a year, because each time the application was withdrawn resulted in an increase in the debtor's debt. It is the duty of state authorities to support creditors in claiming benefits due to them, and the creditor should use the aid in a responsible manner. Therefore, when a creditor decides to initiate enforcement proceedings, he should also actively cooperate with the enforcement authority and should not treat the powers granted to him free of charge in an instrumental manner. Hence, it was found that if enforcement proceedings are discontinued due to the “fault” of the creditor, he should pay the appropriate fee.

The provision of art. 29 sec. 1 sentence 1 of the Act on bailiffs' costs states that it is "the creditor is charged with a proportional fee", which means that the obligation to bear it is absolute. Two conclusions follow from the above: firstly, the creditor is unconditionally obliged to pay the fee in question, and secondly, he has no possibility to claim its return from the debtor pursuant to Art. 770 of the Civil Procedure Code.

The above-mentioned type of fee will be imposed on the creditor only if the proceedings are discontinued due to his fault. In the event that the parties reach an agreement or when the debtor pays the debt directly to the creditor, the burden of costs will be completely different (see below).

How the value of the fee is calculated

As a rule, the bailiff charges a commission of 10% of the amount that he enforces from the debtor. On the other hand, in a situation where the debt is repaid before the bailiff takes the first steps (excluding the decision to initiate enforcement proceedings), then only the cost of the bailiff's commission in the amount of 5% of the receivable remains to be paid.

The value of the fee is determined as of the day of issuing the decision to discontinue enforcement.

However, it should be remembered that the fee is calculated on the value of the outstanding liability. This obligation is the amount covered by the application for discontinuation of the proceedings. Therefore, if the creditor originally claimed the amount of PLN 1,000, but ultimately requests that enforcement proceedings be discontinued in the amount of PLN 700, the remaining benefit will be the amount of PLN 700, and not the original amount of PLN 1,000.

When will the creditor not be charged a proportional fee?

The possibility of evading the fee for the application for discontinuation of the proceedings is provided for in Art. 29 sec. 1 sentence 2 of the Act on bailiffs' costs. Pursuant to this provision, the creditor may be released from the obligation to pay the proportional fee when the proceedings are discontinued as a result of "events beyond the creditor's control", i.e. when, after the commencement of enforcement:

  1. the debtor has performed the service directly to the creditor, without the mediation of the bailiff;

  2. there was an agreement between the parties, incl. the creditor has agreed to spread the debtor's obligation into installments or to take over certain assets of the debtor in exchange for a discharge.

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In the above cases, the bailiff is charged to the debtor. However, if the debt is repaid or the settlement is concluded within one month from the date of delivery to the debtor of the notice on the commencement of enforcement, the amount of the fee will then be 5%. After this deadline, the fee will increase to 10% of the remaining amount to be recovered.

It should be borne in mind that the said provision only provides for the possibility of exemption, not for an obligatory exemption. This means that the creditor must prove to the bailiff that the reason for withdrawing the application is the performance by the debtor. The Act does not regulate the issue of the time limit for proving the above, therefore it is assumed that such demonstration is possible until the decision on the costs of the proceedings becomes final. At the same time, the bailiff is not obliged to summon the creditor to provide explanations regarding the costs, and thus, if the creditor does not exercise his right, then a relative fee will be imposed on him.

Application for discontinuation of the proceedings and delivery of the notice on the commencement of enforcement to the debtor

Unfortunately, the legislator showed some inconsistency when introducing new regulations. The above-discussed art. 29 sec. 1 of the Act on bailiffs' costs applies only to situations where the performance will be fulfilled after the debtor has been served with the notice of the commencement of enforcement. On the other hand, if the performance is fulfilled before the commencement of enforcement, the provision in question will not apply. Then, despite the goodwill, the creditor may incur a fee of 10%, as the initiation of enforcement in such a case will be treated as obviously pointless.

The creditor can only protect against the above by his quick reaction in the form of submitting an application for discontinuation of the proceedings. Pursuant to Art. 29 sec. 2 of the Act on bailiffs' costs, in such a situation, the bailiff will only charge the creditor with a fixed fee of PLN 100.

Additionally, together with the application for remission of enforcement, the creditor may indicate that the reason for such proceedings is the performance by the debtor directly to his hands.If the above is proved, the creditor has the right to demand reimbursement from the debtor of the costs of the fixed fee incurred pursuant to art. 770 of the Civil Procedure Code.

Application for discontinuation of the proceedings and periodic benefits

A completely different method of resolving the issue of discontinuation of enforcement proceedings was adopted by the legislator in the case of repetitive services. In cases the subject of which is the enforcement of cyclical benefits, i.e. maintenance or disability benefits, a fee of 5% will always be charged to the debtor.

This is due to the fact that in cases for the enforcement of the above-mentioned benefits, the bailiff is obliged - ex officio - to conduct periodic investigations to determine the financial status of the debtor, while the discontinuation of proceedings due to the ineffectiveness of enforcement should never take place. This means that the only way to end the recovery of maintenance or disability benefits may be the creditor's application for discontinuation of the proceedings. Due to the fact that periodic benefits are designed to provide the creditor with the means necessary for existence, imposing on him the obligation to bear enforcement costs would be inconsistent with the principles of social coexistence.

Costs of debt enforcement without bailiffs - summary

At the beginning, it should be noted that from January 1, 2019, a new act regulating the collection of bailiff fees entered into force. The current regulations changed the rule according to which the debtor was in any event burdened with enforcement costs. Currently, if the creditor, due to inaction or negligence, leads to the discontinuation of the proceedings, it will be on his shoulders to cover the costs of the enforcement.

On the other hand, in a situation where, after the commencement of enforcement, the debtor has performed the benefit directly to the creditor, or when an agreement has been reached between the parties, then the bailiff's fee will be charged to the debtor. The time by which the debtor will fulfill this obligation is also important. If the debt is repaid or the settlement is concluded within one month from the date of delivery to the debtor of the notice of enforcement, then the amount of the fee is 5% of the remaining amount to be enforced; after this date, the fee will increase to 10%.

Bearing in mind the above, it should be stated that even in the event of the initiation of enforcement proceedings, the debtor's quick reaction and repayment of the debt or entering into an arrangement with the creditor may save him from a significant increase in the existing debt.