Enforcement and Bankruptcy Law

The matters we handle within the framework of the Enforcement and Bankruptcy Law No. 2004:

• Enforcement proceedings with and without a judgment, and finalisation of proceedings
• Attachment proceedings specific to negotiable instruments (cheques, promissory notes, bills of exchange)
• Proceedings for the realisation of pledges and mortgages
• Enforcement proceedings for the eviction of leased immovable property
• Objection to the payment order, actions for annulment and for setting aside the objection
• Negative declaratory actions and actions for restitution
• Actions for release from debt and for the annulment of enforcement proceedings
• Complaints in enforcement law and applications to the enforcement court
• Attachment operations, participation in attachment and declaration of assets
• Actions for recovery of property and protection of third-party rights
• Sale of movable and immovable property and actions to set aside the auction
• Actions for the annulment of dispositions
• Bankruptcy proceedings and bankruptcy actions
• Composition, restructuring and objections to the ranking schedule

In our work in this field, the provisions of the Enforcement and Bankruptcy Law No. 2004 and the relevant legislation are taken into account. Enforcement files are not treated merely as the sending of a payment order or a request for attachment; the evidential strength of the receivable, its maturity and the debtor's default, interest, securities, the debtor's financial structure, likely objections and enforcement costs are assessed together.

Before proceedings are initiated, the basis of the receivable is examined, since an invoice, a current account, a contract, a court judgment, a lease relationship, a cheque, a promissory note, a mortgage or a pledge does not produce the same legal consequences. The appropriate enforcement route and the competent enforcement office are determined, and whether sending a formal notice is mandatory or strategically advisable is assessed according to the specific relationship.

For creditors, our services cover enforcement proceedings with and without a judgment, proceedings specific to negotiable instruments, proceedings for the realisation of pledges and mortgages, the collection of rent receivables and eviction through enforcement. Asset research, attachment, safekeeping, valuation and electronic sale stages are followed without interruption; for corporate receivables, support may also extend to the reconciliation of current accounts, the strengthening of security structures and debtor-based reporting.

On behalf of debtors and third parties, the basis of the proceedings, payment records, limitation, jurisdiction, service, exemption from attachment and ownership claims are examined individually. Objections to payment orders, complaints against acts of the enforcement office, negative declaratory actions, actions for restitution and third-party ownership claims are pursued before the correct authority, supported by appropriate evidence and within the applicable time limits.

In composition and bankruptcy processes, we provide pre-application risk analysis, classification of receivables, review of contracts and follow-up of the provisional and definitive moratorium periods for debtor companies. For creditors, the filing of receivables, the determination of pledge and security status, contested receivables, the acts of the commissioner, creditors' meetings and the confirmation stage are monitored, together with the registration of claims in bankruptcy and objections to the ranking schedule.

Among the disputes most frequently encountered in enforcement and bankruptcy law are objections to payment orders in proceedings without a judgment, actions for the annulment of objections, applications for setting aside objections, and negative declaratory and restitution actions. An objection made in time may, depending on its scope, stay the proceedings; recourse may then be had to the enforcement court or to the general courts according to the creditor's document, and these routes differ in time limits, rules of evidence and consequences.

In proceedings based on cheques and promissory notes, the mandatory elements of the instrument, maturity, presentment, signature, the chain of endorsements, jurisdiction and limitation are frequently disputed. The existence of a negotiable instrument does not eliminate every defence arising from the underlying relationship, although the route by which the defence is raised and the manner of proof may change.

At the attachment and sale stage, third-party ownership claims, exemption from attachment, actions to set aside the auction and objections to the ranking schedule arise frequently. Asserting orally that an asset belongs to a third party is usually insufficient; possession, invoices, payment records, commercial books, licences, land registry records and actual use are assessed.

Actions for the annulment of dispositions are brought where a debtor has transferred assets to a relative or a third party. Not every such transfer is automatically invalid; the date of the disposition, when the debt arose, the sale price, the relationship between the parties, the debtor's financial situation and whether the third party was aware of the transaction are assessed together. The action does not transfer ownership to the creditor, but may allow attachment and sale to proceed over the asset concerned.

The process begins with the joint examination of the enforcement file and the underlying legal relationship from which the receivable or debt arose. The payment order, service documents, the request for enforcement, the contract, invoices, negotiable instruments, bank receipts and, where available, attachment minutes are reviewed not only through UYAP (National Judiciary Informatics System) records but alongside the commercial documents on which the receivable is based.

For creditors, the likelihood of collection and the costs to be incurred are set out; for debtors, the basis of the proceedings, the payment defence, the risk of attachment and the application deadlines. Where an existing proceeding is under review, the payment order, service, the request for enforcement, the interest calculation, objections and attachments already carried out are checked.

Since many objections, complaints and actions in enforcement law are subject to short time limits, the date of service and the date on which the proceedings were learned of are determined at the outset. Treating service as invalid and not following the file may allow attachment or sale to proceed; a document review before proceedings are initiated, or immediately after the payment order is served, can prevent procedural errors that may be difficult to remedy later.

Before attachment or sale, a realistic collection estimate is prepared for assets with high sale costs, low value or prior attachments and pledges, so that costs and the prospect of collection are kept in reasonable balance. Interim injunctions, security and mediation as a precondition to litigation are assessed separately for negative declaratory and restitution actions, since bringing such actions does not in every case stay the enforcement proceedings.

Throughout the process, unnecessary acts and costs are avoided, and the course to be followed is explained to the client together with its alternatives and risks. The client is regularly informed about the stages of the process, the possible risks and the legal remedies that may be pursued.