Debt Collection Agency Poland
Amicable Debt Collections Poland
1. General information
Cosmopolite Collections maintain a professional collection process, focusing on the relationship between our clients and their debtors at all times.
Our team of collection specialists carry out the collection process in-house, contacting debtors both verbally and in writing whilst adhering to federal and state laws.
When there is a case of dispute, we aim to reach an amicable solution between the creditor and the debtor.
We do this by analysing all contractual documents (e.g. signed contracts, orders, confirmations, invoices and delivery notes, as well as all standard terms that have been agreed upon).
All investigations are completed with the assistance and agreement of our legal team.
1.2. Local agents
Cosmopolite Collections offer direct collection activities managed by a selected network of local agents who visit debtors all over the country.
They can visit debtors at their premises and report back on their financial situations.
Our local agent network can also help investigate and find untraceable debtors.
1.3. Interest
Cosmopolite Collections always charge interest to debtors, calculated at 9.5%. Interest is claimed in both amicable and judicial phases.
Cosmopolite Collections may request the client’s approval regarding collecting interest and may ask the client to provide an interest note (at the debtor’s request).
It is often best practice not to ask for interest to be added after the principal amount has been paid in full.
1.4. Debt Collection Costs Poland
In Poland, a debt collection cost of EUR 100 can be added to invoices issued after 28th April 2013. During legal proceedings, clients may also ask for other costs related to debt recovery (e.g. debt collection company invoices).
1.5. Prescription
In general, creditors and debt collectors give up their right to collect a debt after three years from the due date of the debt.
Debts under sale contracts become prescribed within two years, and one year for transport invoices.
For services that require periodic invoicing, such as rental, telephone and internet agreements, the time period is three years. The Polish Civil Code defines that the specific terms of the statute of limitation of debts depend on the type of contracts.
After the expiration of the statute of limitation, the creditor can file against the debtor, but the debtor can ask the judge to dismiss the suit on the grounds that the statute of limitation has expired.
The prescription period can be interrupted if the creditor starts legal proceedings or receives a written debt acknowledgement.
As of 1st July 2018, the Civil Law provisions were changed. The most significant changes concern: The calculation of the prescription period – For regular debts, it will be the end of the calendar year.
For example, if an invoice was issued in August 2018, the prescription term will not be August 2021 but 31st December 2021. The period of prescription of debts, after receiving the court title, will be limited from ten to six years.
In the opposite of previous situations, courts will be checking if consumer debts are not prescribed. In such cases, courts will reject the file.
1.6. Accepted and most common payment methods
The most common payment method is bank transfers. Cosmopolite Collections do not offer direct booking off from the
debtor’s accounts.
1.7. Types of companies
- SC (spółka cywilna) (Civil law partnership) Unlimited liability of the owner with their business and private funds.
No minimum capital Unlimited liability of partners Usually non-business or small-business activities.
- SP.J. (spółka jawna) (General partnership) No minimum capital Unlimited liability of partners.
- SP.K (spółka komandytowa) (Limited partnership) No minimum capital
At least one partner has unlimited liability with their business and private funds. Limited partners are only liable with company capital.
- S.K.A. (Spółka komandytowo-akcyjna) (Private unlimited with share capital) A minimum capital of PLN 50,000 At least one partner has unlimited liability with their business and private funds.
- SP.P. (Spółka partnerska) (Professional [service] partnership) No minimum capital Partners are independent professionals, such as lawyers, doctors or architects.
- SP. Z O.O. (Spółka z ograniczoną odpowiedzialnością) (Company with limited liability) A minimum capital of PLN 5,000 Partners are only liable with company capital.
- S.A. (Spółka akcyjna) (Company on shares) A minimum capital of PLN 100,000 divided into shares Liability is limited to company capital.
In Poland, Cosmopolite Collections contact credit reporting agencies to assess the financial situation of the debtor, including real estate and other enforceable assets.
We combine this with our own phone contacts to get an accurate impression of the debtor’s financial situation and advise on the next step. It depends on the legal form of the debtor that whether we are also able to request information from public registers.
All private entrepreneurs have to be registered at the Municipal Trade Offices.
All companies with limited liability have to register with the trade register at a competent court. We have direct access and can obtain any additional information on shareholders, historical developments and published balance sheets.
Debtors with unknown addresses can be traced via the Registration of Address office.
Private persons are legally obliged to officially de-register when moving from one town to another and to re-register in their new town.
Occasionally some debtors do not follow this procedure and cannot be traced, despite this being a punishable offence.
2. Retention of title
In Poland, retention of title is applicable to movable goods only. The seller retains ownership of the goods delivered to the buyer until the full purchase price has been paid, and it is mainly used for safeguarding instalments in sale agreements.
The retention of title must be stipulated in writing and notarised with a certified date in order to make it insolvencyresistant, so that goods to which the title is retained do not become part of the bankrupt’s estate.
However, it does not provide protection against acquisition by a third party.
3. Safeguarding measures
In case the debtor is not able to settle a claim in a speedy manner, Cosmopolite Collections can request that the debtor secure the debt in favour of our client.
This can be done amicably and cost-effectively by providing an acknowledgement of debt authenticated by a notary and is immediately enforceable in case the agreed payment terms are not honoured.
The corresponding notary costs have to be carried by the debtor.
The debtor is also able to offer other means of security such as mortgages, assignments of debts or assets.
Contracts must be drawn up for assignments of
Jednoosobowa działalność gospodarcza (Sole trader /sole proprietorship)
debts or assets, while mortgages have to be registered by a notary.
4. Legal collections in Poland
4.1. General information
It is obligatory to send a written request for payment to the debtor before starting any legal action in court.
When both parties in dispute are conducting business activities, the commercial courts review the case.
This kind of legal proceedings was established in 2011 to speed up the court’s decision.
Some simplified legal proceedings can also be run by the E-Court in Lublin. Poland were a signatory to the European Council Regulation (EC) 805/2004, which allows the creditor to enforce European Enforcement Order (EEO).
Cosmopolite Collections provide a service for obtaining in the creditor’s country an EEO to be enforced in the debtor’s country.
4.2. Legal system
The Polish legal system has two types of courts: the arbitral court and the commercial courts.
We can also proceed electronically through the E-Court. If there is no possibility for an amicable collection to take place, we have to send a reminder to the debtor before legal action is started, as requested by the court.
Arbitral court
To proceed in front of the arbitral court, it is necessary to have a contract or an agreement with an arbitral clause mentioned. This proceeding is expensive but quicker. When a judgment is issued, the creditor must apply for an enforcement clause before any execution can be started.
Common court
There are two types of proceedings that go before the common court:
- Injunction proceedings (‘postępowanie nakazowe’) According to the Code of Civil Procedure, a creditor can file an action for a writ of payment. The courts can issue a writ of payment without the need for a court hearing if the documents attached to the action include, but are not limited to, the agreement between the creditor and the debtor concerning payment, the debt recognised by the debtor, the invoices accepted by the debtor (signed and stamped) and proof from the post office validating that the invoices were delivered to the debtor.
The court can also grant the writ of payment with an attached agreement, proof of fulfilment and an invoice delivered to the debtor.
This procedure is easier and quicker for the creditor, as the court will usually issue the writ of payment within one to three months unless the debtor lodges an objection.
The case will then be examined in the ordinary procedure court. It is cheaper for the creditor, as the court fee is 1.25% of the claim value, and if the debtor appeals, the debtor also has to pay the court fee.
- Writ proceedings (‘postępowanie upominawcze’) If the client can provide us only with invoices, proof of delivery or CRM, a statement of account, proof of the debtor’s address and an extract from the trade registry (but there is no debt recognised and the debtor has not signed the invoices), Cosmopolite Collections can proceed with the writ proceedings.
The court can also issue a writ of payment without a court hearing once it has checked all of the documents.
This procedure is more expensive for the creditor (the court fee is 5%), and the debtor does not have to pay the court fee if they object. If there is an objection, the case is transferred to a common court for an ordinary procedure. 75% of the court fee is returned to the creditor once a decision is reached.
4.3. Required documents
Any invoices signed by the debtor with proof of the delivery of the goods, regarding sale transactions.
Invoices must not be older than two years from their due dates.
We would also like the client to provide us with a document (by post) confirming, if possible, that the invoices have been delivered to the debtor.
A confirmation of the debt signed by the debtor (if there is one).
Contracts between parties with terms and conditions signed by the parties. The order made by the debtor in writing. The confirmation of the order by the creditor. Documents confirming the disputes. Correspondence between the parties.
A fulfilled and signed power of attorney (always as an attachment), signed by the individuals duly authorised to represent the client’s company.
A current extract from the creditor’s trade registry that states the individuals who have the right to represent the creditor company and sign the power of attorney.
Transport documents (CMR, WZ). In Poland, it is possible to start a legal process with copies of documents (the law allows the lawyer who runs a particularcase to sign copies of documents submitted).
The crucial point is that the signature of the individual(s) with the power of attorney is the same as mentioned in the extract from the client’s trade registry. Without this, the court can reject our legal action (for formal reasons).
4.4. Legal dunning procedure
To obtain an enforceable judgment, Cosmopolite Collections need to get a court order first, and an enforcement clause needs to be applied and served to the debtor.
The debtor can appeal, which would then transfer the dunning procedure into a standard lawsuit procedure.
4.5. Lawsuit in Poland
The regular lawsuit procedure is initiated either directly after the amicable collection has failed due to a dispute by the debtor or directly after the legal dunning procedure if the debtor has appealed.
A written pre-procedure is usually issued. Both the plaintiff and the defendant must exchange opinions and proofs by letter until the judge believes all relevant information needed to make a judgment has been received.
In this case, a hearing is scheduled, during which both parties must be present. After the hearing, the judge sets a date to publish the final judgment, and both parties will be informed about the outcome in writing by the court.
Mediation In January 2016, a new law was implemented that introduced an obligation in the lawsuit to present whether the parties attempted to settle the debt amicably before referring to a court. If such an attempt was not taken, the plaintiff should present the reasons in the lawsuit.
The obligation was also strengthened to inform the debtors that debt negotiations may be referred to a mediation process.
The court has also gained the right to direct the parties to attend an information meeting, during which the parties will receive information about mediation. The court may also invite the parties to the mediation at any stage of the lawsuit and more than once during the proceedings.
4.6. Appeal
An appeal against the judgment is possible, which will trigger a second verdict by the court of second instance (local court to district court, district court to higher regional court).
4.7. Debt Collection Costs in Poland
A creditor filing an action to court is obliged to pay a court fee.
There are three main types of court fees
– flat rate fees,
- proportional fees
- and basic fees –
and the type of fees depends on the object of the action. In case of actions for payment, the creditor has to pay the proportional fee, which is 5% in respect of the monetary suits (not less than PLN and no more than PLN 100,000).
The court fee must be paid before filing an action to court, and the proof of payment must be attached to the statement of action.
If the case is considered in the proceedings for a writ of payment, the fee is 25% of the proportional fee mentioned above and not less than PLN Lawyers’ fees depend on the claim amount and the type of proceedings being initiated (principal amount, without interest).
-Up to PLN 500 PLN 90 (PLN 60 writ proceedings)
-Over PLN 1,500 up to PLN 5,000 PLN 900 (PLN 600 writ proceedings)
-Over PLN 50,000 up to PLN 200,000 PLN 5,400 (PLN 3,600 writ proceedings)
-Over PLN 500 up to PLN 1,500 PLN 270 (PLN 180 writ proceedings)
-Over PLN 10,000 up to PLN 50,000 PLN 3,600 (PLN 2,400 writ proceedings)
-Over PLN 5,000 up to PLN 10,000 PLN 1,800 (PLN 1,200 writ proceedings)
-Over PLN 200,000 up to PLN 2 million PLN 10,800 (PLN 7,200 writ proceedings)
-Over PLN 2 million up to PLN 5 million PLN 15,000 (PLN 7,200 writ proceedings)
-Over PLN 5 million PLN 25,000 (PLN 7,200 writ proceedings)
4.8. Expected time frame
The average duration of a legal dunning process is between two weeks and four months, whereas a court procedure can take up to one year or even longer, depending on the complexity of the case and if the debtor raises any objections.
4.9. Interest and costs in the legal phase
Extrajudicial interest can be claimed back as part of the outstanding debt during the legal proceedings.
5. Enforcement
5.1. Enforcement in debt
A bailiff, on behalf of the creditor, can conduct a seizure of the debtor’s bank account and ask for the debtor’s claims against tax offices, life insurances, the debtor’s salary and shares in a business, corporate shares or any possible claim the debtor may have against any third party.
This usually proves very effective and can save costs when enforced as part of the judgment.
Very specific information, such as bank account details, the name and address of the employer and any information about the corporate shares or shares in businesses, is required for this kind of enforcement.
During the new legislations in 2018, bailiffs’ fees will be reduced, which should partially contribute to the reduction of the cost of enforcement.
5.2. Enforcement in movable property
A bailiff, on behalf of the creditor, can conduct a seizure of the debtor’s bank account and ask for the debtor’s claims against tax offices, life insurances, the debtor’s salary and shares in a business, corporate shares or any possible claim the debtor may have against any third party.
This usually proves very effective and can save costs when enforced as part of the judgment.
Very specific information, such as bank account details, the name and address of the employer and any information about the corporate shares or shares in businesses, is required for this kind of enforcement.
During the new legislations in 2018, bailiffs’ fees will be reduced, which should partially contribute to the reduction of the cost of enforcement.
5.3. Enforcement in immovable property
If the debtor owns real estate, it is possible to receive a record of the claim in the land register and to then force the attachment of the property and sale or, in cases where there are tenants, the sequestration of the real estate by court order.
All of these processes are more expensive than those mentioned previously, and it can be a long process to get a copy of the record.
Afterwards, it can also take time to sell or sequestrate the land and the real estate. Enforcement in monies generally takes two to three months.
Enforcement in movable property, however, often needs five to ten months. The time frame of enforcement in real estate depends very much on the single course of the case, the court, possible banks and, of course, possible buyers.
The debtor is always charged back with all the court procedure costs in the sentence or judgement.
Changes in the execution of farmers’ real estate caused major difficulties in the sale of real estate during auctions.
As a result, the banking sector is much more restrictive in its approach to financing farmers.
6. Insolvency proceedings
6.1. General information
Starting from 1st January 2016, the Restructuring Law came into force. This new law was partially extracted from the insolvency law and amended with appropriate new institutions for restructuring proceedings.
As a result, the insolvency law no longer pertains to restructuring proceedings and remains the basis for bankruptcy proceedings only.
For all legal entities that filed their insolvency motions after 31st December 2015, the new regulations can be applied.
The new law regulates recovery activities, providing a wide range of possible repairing proceedings for companies that lose their liquidity.
The main goal of the new regulations is to avoid insolvency declared by companies and to help entrepreneurs recover their financial liquidity.
6.2. Proceedings
Apart from the regular insolvency proceedings, which will remain regulated by the insolvency law, the new reparation regulations introduced four new types of restructuring proceedings:
- proceedings for the approval of an agreement (‘postępowanie o zatwierdzenie układu’),
- accelerated arrangement proceedings (‘przyspieszone postępowanie układowe’),
- arrangement proceedings (‘postępowanie układowe’) and
- remedial proceedings (‘postępowanie sanacyjne’).
Proceedings for the approval of an arrangement (‘postępowanie o zatwierdzenie układu’) – Allows the insolvent debtor to make an agreement with the creditors as an effect of getting enough votes from the creditors without court assistance.
The court is not active in this type of procedures until a final arrangement is reached by the parties and limits its role to approving (or not) the arrangement.
Accelerated arrangement proceedings (‘przyspieszone postępowanie układowe’) – Allows the court to examine an application for the opening of accelerated arrangement proceedings at a closed session, based exclusively on the documents attached to the application submitted by the (insolvent) debtor within one week.
An arrangement is voted on by the creditors within a couple of weeks from the day of the opening of the accelerated arrangement proceedings; and if it is approved, it will appropriately close the proceedings.
Arrangement proceedings (‘postępowanie układowe’) – Differs from the accelerated arrangement proceedings on account of the potential necessity to schedule a hearing by the court. This results in different (longer) terms of the debtor’s application examination – two to six weeks.
Remedial proceedings (‘postępowanie sanacyjne’) – This is the most advanced and detailed of the restructuring proceedings. It allows the insolvent debtor to practice all kinds of reparation activities and is aimed at improving the financial situation of the insolvent company.
The new regulations anticipate the creation of a public Insolvency Register (‘Centralny Rejestr Restrukturyzacji i Upadłości’), which will provide all the necessary information regarding the restructuring as well as insolvency proceedings in place.
All the cases conducted on grounds of the restructuring law are recognised by a restructuring court that in fact is a district, commercial court competent on account of the (insolvent) debtor’s seat. The restructuring proceedings can be applied to the debtor who is insolvent or who is in danger of insolvency. An inventory of receivable debts is a document that contains the liabilities that the debtor owes to their creditors.
The amount indicated in the inventory specifies the amount that the creditors can claim from the debtor. The new law introduces to the Polish law system a procedure that simplifies the possibility of obtaining public funds as a financial backing for bankrupt companies.
The changes are caused by a low percentage of companies that, after declaring their insolvency, were able to recover and successfully re-join the market.
6.3. Required documents
In order to lodge a claim, Cosmopolite Collections require:
-An original power of attorney
-Copies of invoices
-Copies of contracts
-Copies of orders, confirmations and delivery notes
-Copies of general conditions of sales, should there be any
-Copies of any other correspondence that may verify the claim
-An extract from trade register of the client.
6.4. Expected time frame and outcome
The restructuring proceedings were designed to be as timeefficient as possible, so none of the new institutions should last longer than 12 months, whereas regular insolvenc proceedings can take up to five years.
6.5. Limited companies
Limited companies are obliged to file an application either for the appropriate restructuring proceedings or for insolvency if they become unable to fulfil their obligations towards the creditors for more than three months or their liabilities exceed their assets for more than 24 months.
In the case of restructuring proceedings, it is also possible for the debtor to file an appropriate application even if it is not yet required by the circumstances described above but they are very likely to happen in the near future.
6.6. Unlimited companies / individuals
For unlimited companies or individual debtors, it is not obligatory to declare bankruptcy. Nevertheless, they can declare bankruptcy for the reason of inability to pay or expected inability to pay.
The new law introducing bankruptcy of an individual was enacted in 2010.
The costs of the proceedings are covered by the assets, or the liable persons may request a respite of the costs.
6.7. Rescission
The liquidator can dispute payments made by the debtor carried out generally within six months prior to the declaration of bankruptcy.
7. Arbitration and mediation
If both the creditor and the debtor agree on an alternative dispute solution, there are two options available:
- arbitration and mediation or
- conciliation.
Agreeing to a private tribunal has a number of advantages compared to a regular legal proceeding: it is quicker, as the courts are less occupied and there is no appeal, plus it is more cost-efficient and the hearing and processes are confidential. Also, the mediator cannot be asked to be a witness in court.
Although it can shorten the duration of disputes before court, mediation is not very popular in Poland. The main reason for this is that mediation has only existed in Polish law since December 2005.
The mediator fee for court mediation is calculated as 1% of the claim value but not higher than PLN 1,000. This means that the price is too low to have experts in these proceedings.
It is very important that, afterwards, a commercial court approves the agreement resulting from the mediation proceedings, so that the agreement can be treated as an enforcement title.
Arbitration is conducted on the basis of the arbitration clause in the contract or terms and conditions or agreement with the debtor. Unless any special regulations state otherwise, the parties may submit any disputes for settlement in arbitration, except for alimony cases.
The submission of a dispute for arbitration requires an agreement between the parties specifying the subject of the dispute or the legal relationship triggering the dispute.
The settlement concluded by the arbitration court has to be approved by the commercial court and then, after being granted an enforcement clause, it can be treated as an enforcement title.
Poland is a country located in Central Europe. Its capital city is Warsaw. Poland is divided into 16 voivodeships and one city with voivodeship status. The government system of Poland is a parliamentary republic. The official language of Poland is Polish, and the currency is the Polish złoty.
Collecting debts in Poland can be challenging for foreign businesses due to a number of factors, including the country's economic and political instability, the complexity of the legal system, and the difficulty of enforcing judgments. There are a number of debt collection agencies operating in Poland, and the industry has been in existence for several decades.
The national credit bureau in Poland is the Credit Information Bureau, and some of the private credit reporting companies operating in the country include CRIF, Equifax, and Experian. Debt collection laws in Poland are generally uniform throughout the country, although local laws may sometimes apply.
There are several benefits to using commercial debt collection services for Poland:
- Expertise: Debt collection agencies have specialized knowledge and experience in recovering debts, which can be particularly useful for foreign businesses that may not be familiar with the local legal and cultural environment.
- Efficiency: Debt collection agencies can often recover debts more quickly and efficiently than businesses can on their own, as they have the resources and expertise to pursue multiple avenues for recovery.
- Cost-effectiveness: Using a debt collection agency can be more cost-effective than trying to recover debts on your own, as you can avoid the time and expenses associated with pursuing legal action.
- Risk reduction: Debt collection agencies can help to reduce the risk of non-payment by providing credit risk assessment and monitoring services.
- Language skills: Multi-lingual debt collectors can communicate effectively with Polish debtors, which can be particularly helpful for foreign businesses.
- Local presence: Debt collection agencies with local presence and knowledge of the local legal and cultural environment can be more effective at recovering debts in Poland.
- Online services: Many debt collection agencies offer online tools and services, such as 24/7 debt recovery report websites, which can be convenient and efficient for creditors.
Our debt recovery agency has a very high success rate in Poland thanks to our multi-lingual debt collectors located in the country and our 24/7 online debt recovery report website. We have local debt collection managers in the cities of Warsaw, Krakow, and Gdansk.
