Debt Collection and Recovery in Poland

Home » Debt collection and recovery (vindication) in Poland

The modern economic reality is inevitably tied to the necessity of enforcing debt collection. In this process, debt collection plays a crucial role, aiming to recover outstanding debts from debtors. Given the global nature of today’s economy, foreign counterparts often need to participate in the debt collection process in Poland, both as creditors and debtors. While the Polish procedure in this regard is not fundamentally different from those in other European countries, it is essential to familiarize oneself with it.

In the Polish legal framework, there are two fundamental types of debt collection processes, which correspond to its stages:

pre-litigation (amicable) debt collection;
judicial debt collection (with enforcement proceedings sometimes considered a separate type/stage).

The duration of the debt collection in Poland can vary significantly, lasting from several months to even several years. Factors influencing its course include the debtor’s solvency and willingness to settle outstanding debts. This, in turn, affects the stage at which the proceedings will conclude, with non-judicial steps generally proceeding more swiftly.

Various entities may be helpful when seeking recovery. Debt collection agencies are the first group offering services in this regard. Their typical activities involve attempting an amicable debt collection from debtors through negotiations, setting new repayment terms beneficial to both parties or sending payment demands along with warnings about the possibility of reporting the overdue debt to various debt registers, such as the Business Information Bureau (BIG) InfoMonitor S.A. or the National Debt Register BIG S.A. However, the competencies of most such agencies generally end at this stage. More comprehensive services in debt recovery can be provided by law firms, which, in addition to the aforementioned activities, also represent creditors in court and enforcement proceedings.

Debtor – How to locate a debtor and obtain information about them in Poland

A crucial step in debt collection is gathering information about the debtor. In this regard, the most critical information includes the current address to which payment demands and, later, legal documents can be directed. It is also essential to obtain information about the debtor’s financial status. If it is questionable, it is advisable, before initiating legal action, to consider applying for claim security. In the worst-case scenario, the debtor may have outstanding debts to state authorities, in which case the chances of recovering individual debts are limited and often not worth pursuing through the judicial debt collection stage.

Searching for a debtor

Depending on the type of counterparty, information can be sought from the following sources:

National Court Register (KRS)

It contains information about entrepreneurs, including:

general partnerships;
limited liability companies;
limited partnerships;
joint-stock companies;
limited joint-stock partnerships;
partnerships.

One of the primary obligations of a company is to prepare an annual financial report and make it available to public information. The absence of such a report is a warning sign itself. However, if such a report is available, it is advisable to analyze it thoroughly. Essential in this regard are the following pieces of information:

activity reports over recent years, especially a breakdown of income and expenses;
the status of the company’s assets – whether they have been taken over by a trustee in bankruptcy or restructuring proceedings.
the extent of the company’s liabilities, including taxes and payments to social security (ZUS) or other creditors.

Central Register and Information on Economic Activity (CEIDG)

It contains information about individual entrepreneurs, including details related to bankruptcy, recovery proceedings, restructuring proceedings, and prohibitions on conducting specific economic activities.

From a procedural perspective, the provided address for service is also essential. Individuals conducting economic activity must, in accordance with Article 136 § 5, notify the court of any changes to this address. However, failure to fulfill this obligation results in documents staying in the case file as they have been delivered – known as the legal fiction of delivery.

Universal Electronic Population Register (PESEL registry)

It contains information about individuals, primarily including the Personal Identification Number (PESEL), which indicates the date of birth and the place of permanent and/or temporary residence. These details allow the identification of an individual debtor, and at least one of them is a necessary element in a lawsuit.

Given the removal of the obligation to provide a registered address, this register has lost some of its significance. Access to this registry is also not universal – obtaining information requires submitting an application to the city authorities.

National Debtor Register (KRZ)

It contains information about all legal entities that have been or are currently undergoing restructuring, bankruptcy, prohibition of conducting economic activity, as well as judicial and administrative enforcement proceedings – even if they have been terminated due to ineffectiveness

Court and Commercial Gazette (Monitor Sądowy i Gospodarczy)

It contains announcements related to all legal entities, the publication of which is required by the law, such as the Code of Civil Procedure, restructuring law, bankruptcy law, political party law, or other statutes. In practice, concerning debt collection, the most relevant announcements would be those regarding ongoing bankruptcy and restructuring proceedings.

Furthermore, information about debtors can also be sought on:

debt marketplaces.
the aforementioned Debt Registers, e.g., BIG InfoMonitor, National Debt Register.
ordinary, publicly accessible websites, such as Facebook.

A broader scope for seeking debtor information is available to a bailiff. As mentioned earlier, a bailiff collaborates with numerous institutions obligated to provide information upon request. However, it’s important to remember that debt collection conducted by a bailiff is the final stage of debt recovery, and the bailiff can only take action based on an enforcement title obtained through a judicial process. There is no possibility to utilize their authority earlier in the process.

In cases where bailiff enforcement proves to be ineffective, the last resort for obtaining information about the debtor, especially regarding their assets, is filing a motion for disclosure of assets. This is submitted to the court having jurisdiction over the debtor’s place of residence. If one of the following circumstances is likely:

the seized assets of the debtor do not promise satisfaction of the claims;
the creditor has demonstrated that they did satisfy their claim in the course of the enforcement proceedings.

The court will order the debtor to prepare and submit an asset disclosure under the penalty of criminal liability.

Types of debt collection in Poland

Two fundamental types of debt collection processes are distinguished in the Polish legal framework.

Amicable debt collection in Poland

Once all the necessary information has been gathered, the stage of amicable debt collection can commence in Poland. Within this stage, various actions can be taken, including:

negotiations;
field debt collection;
listing the debtor in the Debtors Register – but only after informing them of the possibility of such listing and specifying a timeframe;
selling the debt claim.

The most common method for this stage is sending payment demands. It’s also an action that must precede the entry into the Debtors Register and often serves as an invitation to initiate negotiations. From a procedural perspective, it signifies an attempt to resolve the dispute extrajudicially, which is a necessary element of a lawsuit.

Amicable debt collection, also known as soft or pre-litigation debt collection, encompasses a set of actions taken before initiating a lawsuit. Its primary goal is to attempt contact with the debtor to achieve an out-of-court resolution to the dispute arising from the debtor’s failure to pay the due amount on time. Contact can be established through various means, including email, phone calls (both voice and SMS), regular mail, and even in person. It may involve activities such as:

Negotiations are voluntary discussions between the creditor and debtor, sometimes in the presence of a neutral mediator (in which case they are referred to as mediation). The aim is to reach a consensus regarding the repayment of overdue debts. This may include:

splitting the total amount owed into installments and establishing a repayment schedule;
extending the payment deadline;
waiving the claim for interest or part of the obligation.

An extrajudicial settlement agreement is a document containing the agreements reached through negotiation/mediation. To secure the provisions arising from it, it is advisable to have it in writing. Key elements to include in it are:

date and place;
parties’ details;
subject of the agreement and a description of the dispute;
specification of the debt amount;
the debtor’s acknowledgment of the debt which is important from a procedural standpoint;
additional provisions regarding securing the debt claim which increase the chances of the debtor making timely repayments;
signatures of the parties.

However, it’s important to note that the extrajudicial settlement agreement does not serve as a basis for potential enforcement by a bailiff. Continued failure by the debtor to meet their obligations can only result in the creditor terminating the agreement and initiating a lawsuit.

Field debt collection, which involves direct meetings with the debtor at their place of residence or work. Field debt collection is conducted at their registered office when the debtor is a company. The primary tool in this process is a conversation where arguments for debt repayment and the consequences of non-payment are emphasized. In general, it aims to exert psychological pressure that motivates the debtor to settle the debt. Additionally, it provides information about the debtor’s financial situation, which, when analyzed, helps determine the sources of their assets. It is them that, in case of unsuccessful amicable debt collection, will be distraint in order to obtain owed payment.

Sending payment demands, which are written notices containing:

date and place;
parties’ details;
basis of the claim, such as a VAT invoice or a contract;
the amount owed, which, when dealing with business entities, is increased by the appropriate amount according to Article 10 of the Act of March 8, 2013, on counteracting excessive delays in commercial transactions (Consolidated text: Journal of Laws of 2023, item 711, 852);
due date;
final payment deadline;
bank account number for the payment;
creditor’s signature.

The payment demand is sent by registered mail to the debtor’s address, allowing for tracking the delivery status, including whether and when the recipient received it.

A payment demand can serve different functions. When the deadline for performance is not specified or does not arise from the nature of the obligation, it serves as a notice under Article 455 of the Civil Code and determines the due date of the obligation. If the deadline has been defined in a previous document, such as a VAT invoice or a contract, as mentioned above, the payment demand also signifies an attempt to amicably resolve the dispute under Article 187 § 1 point 3 of the Code of Civil Procedure. Confirmation of such an attempt must be included in the content of any potential lawsuit.

Undoubtedly, the most satisfying response to such a payment demand would be receiving due payment. From a procedural perspective, an equally important response could be the debtor expressing a willingness to engage in negotiations leading to an extrajudicial settlement – each time constituting an acknowledgment of the debt.

Listing the debtor in the Debtors Register. This is a database of Economic Information Bureaus containing data on the financial arrears of consumers and entrepreneurs. There are five such Bureaus in the Polish market:

Debtors Register BIG InfoMonitor;
National Debt Register;
ERIF Debtors Register;
National Telecommunications Debt Information;
National Economic Information Bureau.

Listing a debtor in these registers must be preceded by a payment demand that includes information about the possibility of such listing. Additionally, the debtor must meet certain criteria; their debt must exceed 200 PLN for individuals or 500 PLN for entrepreneurs.

Being listed results in a loss of financial credibility for the debtor, which can directly impact their relationships with other businesses and financial institutions, thereby exerting psychological pressure motivating the debtor to repay the debt.

Selling the debt involves transferring the rights of the original creditor to a new purchaser while partially satisfying the original creditor. An assignment of claim contract for debt claims should include:

date and place;
parties’ details;
description of the debt claim;
the date of the debt claim transfer and its price;
information on who will inform the debtor of the change in the creditor.

Debt claims are most often purchased by companies specializing in this field with substantial capital. The term “factoring” has emerged from the names of these companies. In principle, factoring contracts are based on an assignment of claim contracts. However, the parties involved can only be entrepreneurs: the factoring company and the creditor in a separate legal relationship seeking to sell the debt claim.

The price offered for the sale of debt claims is generally lower than the amount specified in the respective debt claim. Thus, the cedent or factorant will not be fully satisfied. However, it is a quick solution that allows to maintain financial liquidity without participating in debt collection proceedings

If amicable debt collection proves ineffective, meaning the creditor remains unsatisfied, and the previously gathered information indicates that the debtor has assets capable of covering the outstanding debt, especially if they are not currently undergoing bankruptcy or restructuring proceedings, the next step is aggressive debt collection.

Judicial Debt Collection in Poland

When none of the above-mentioned amicable debt recovery methods prove successful, the creditor has the right to file a lawsuit in court. Such actions are referred to as judicial debt collection.

Judicial Proceedings

When initiating a lawsuit, it’s essential to consider the rules governing court jurisdiction. The most relevant aspects in this regard are:

subject-matter jurisdiction (Article 17, item 4 of the Civil Procedure Code – k.p.c.): Regional courts have jurisdiction over disputes with a value of up to 100,000 PLN; district courts adjudicate cases with higher values.
territorial jurisdiction (Article 27, § 1 of the Civil Procedure Code): The lawsuit is brought before the first-instance court in the defendant’s region (or where the defendant’s registered office is located in the case of companies).
contractual jurisdiction (Article 46, § 1 of the Civil Procedure Code): Parties can exclude the application of Article 27, § 1 of the Civil Procedure Code through an agreement included in their contract.

Furthermore, depending on the nature of the entities involved, the lawsuit is filed with either the civil division (for individuals) or the commercial division (for all types of companies and individuals conducting business activities). For several years, there has also been an Electronic Writ-Of-Payment Proceedings (Elektroniczne Postępowanie Upominawcze or EPU) system, which allows for filing a lawsuit through a website. Regardless of the mentioned jurisdiction or entity characteristics, all EPU cases are handled by the Lublin-Zachód District Court in Lublin, VI Civil Division.

Cases aimed at recovering debts are most commonly heard under one of the following procedures:

Prescriptive Proceedings (postępowanie nakazowe)

The evidence presented in this procedure must not raise any doubts. A payment order in the prescriptive proceedings will only be issued if the facts supporting the claimed debt are proven by the documents attached to the lawsuit. These documents can include:

an official document;
an invoice accepted by the debtor;
a payment demand sent to the debtor along with a written acknowledgment of the debt by the debtor;
a promissory note or properly completed check, the authenticity and content of which do not raise doubts;
a contract, evidence of reciprocal non-monetary performance, evidence of the debtor’s receipt of an invoice or an account if the creditor is pursuing payment of a monetary performance.

Once issued, the payment order serves as an enforcement title without the need for an enforcement clause. The defendant can raise objections to it within one month of receiving it, but this does not suspend the enforceability of the payment order. Due to the requirement for unquestionable evidence, this is not the most popular procedure.

Writ-Of-Payment Proceedings (postępowanie upominawcze)

A payment order in the writ-of-payment proceedings is issued if:

the monetary claims being pursued are justified.
the factual allegations do not raise any doubts.
the satisfaction of the claim does not depend on reciprocal performance.

In contrast to a payment order issued in the prescriptive proceedings, a payment order issued in the writ-of-payment proceedings does not serve as a security title or an enforcement title. To achieve this, it needs to be provided with an enforcement clause. The defendant can raise objections to the payment order within two weeks of receiving it, and if objections are raised, the order loses its effect. The requirement for unquestionable evidence in this procedure is less rigorous compared to the previously mentioned procedure, making the recovery procedure more popular.

Electronic Writ-Of-Payment Proceedings (EPU)

Due to the absence of the need for personal appearance, this is the fastest procedure. Furthermore, all procedural actions in this mode are carried out through an IT system, and evidence should also be described precisely in the lawsuit’s content, as physical copies are not attached.

A payment order in EPU cannot be issued if:

the claimant is pursuing a non-monetary claim.
the delivery of the order to the defendant would occur outside the country’s borders.
the claims being pursued became due earlier than within three years before the filing of the lawsuit.

A payment order in EPU is subject to the same regulations as a payment order issued in the writ-of-payment proceedings. The defendant can raise objections within two weeks of its delivery. If an objection is raised, the court terminates the proceedings. In such a case, the claimant still has the right to file a lawsuit for the same claim but in a different proceeding than the EPU. If this is done within three months of the decision to terminate, the legal consequences tied to the filing of a lawsuit occur on the date of filing the lawsuit in EPU. Upon request, the court will take into account the costs incurred by the parties in the electronic writ-of-payment proceedings when considering the case.

Traditional court proceedings	electronic court proceedings
a payment order is issued during an in-camera session; however, in the absence of clear grounds for its issuance, the court adjudicates the matter according to general provisions	in EPU proceedings, traditional hearings, in the conventional sense of the word, are not conducted. Decisions in cases are always rendered during sessions in the absence of the parties
the court may issue a payment order for the entire requested amount, a portion of it, or dismiss the proceedings in their entirety, deeming the entire requested amount unjustified.	the court issues an order for the entire requested amount or dismisses the proceedings in their entirety, considering the entire requested amount as unjustified or determining the need for evidentiary proceedings.
the debtor has the right to raise an objection or defenses against the payment order within two weeks or a month from its delivery. If such an objection is submitted, the court may schedule a hearing.	the debtor has the right to lodge an objection to the payment order within two weeks from its receipt – if such an objection is submitted, the proceedings are discontinued.

Furthermore, the fundamental differences between these proceedings lie in the amount of court fees. A comparison is presented below:

claim amount	writ-of-payment proceedings	prescriptive proceedings and EPU
up to 500 PLN	30 PLN	30 PLN
up to 1.500 PLN	100 PLN	30 PLN
up to 4.000 PLN	200 PLN	50 PLN
up to 7.500 PLN	400 PLN	100 PLN
up to 10.000 PLN	500 PLN	125 PLN
up to 15.000 PLN	750 PLN	187,5 PLN
up to 20.000 PLN	1.000 PLN	250 PLN
above 20.000 PLN	5% of the claim amount	1,25% of the claim amount

In addition to the amount specified by the creditor in the lawsuit, the court also rules on the costs of the proceedings and the costs of legal representation. As a general rule, the losing party is obligated to pay these costs.

It is worth noting that if, at any stage of electronic proceedings, the case is dismissed, the creditor still has the right to file a lawsuit for the same claim, but in proceedings other than EPU. If the creditor does so within three months of the dismissal decision, the fee paid for EPU will be credited to the new proceedings, and the legal consequences associated with filing a lawsuit will be calculated from the date of filing the lawsuit in EPU. The subsequent proceedings will be subject to the same rules as regular writ-of-payment or prescriptive proceedings, with the choice of proceeding type depending on the circumstances. However, in cases where the reason for dismissal in EPU was the need to examine the evidence, the standard writ-of-payment proceedings may be more appropriate.

After the loss of validity – i.e., if the defendant raises an objection – or the annulment of the payment order, or in cases where there are no grounds for issuing it, the court will adjudicate the case according to general provisions or in a separate proceeding appropriate for the matter. This means that writ-of-payment or prescriptive proceedings may end with a judgment or ruling, not just a payment order.

What should be included in the lawsuit?

In this regard, it is necessary to compile the required documentation, especially documents indicating the amount of the debt and the due date for payment, such as VAT invoices or contracts. If the claimed amount corresponds to a service rendered by the creditor, any kind of confirmation of service execution will also be needed, such as service reports or acceptance protocols.

In such a case, a lawsuit may be filed. Firstly, the type of proceedings in which the lawsuit will be lodged must be chosen. The types, their characteristics, and associated merits and drawbacks have been listed above. If standard proceedings are selected, it is necessary to determine the jurisdiction of the court to which all the necessary documents will be sent.

The content of the lawsuit must always include the following:

the value of the dispute (WPS) – the outstanding amount resulting from the contractual relationship between the creditor and debtor (plaintiff and defendant), from which interest for delay can also be demanded. In disputes between entrepreneurs, the value of any compensation for the costs of debt recovery under Article 10 of the Act of March 8, 2013, on counteracting excessive delays in commercial transactions is often included.
precisely defined creditor’s claim – in this case, it will be an order for payment that the debtor is obliged to pay the outstanding amount to the creditor.
information about the due date – the payment deadline specified in the VAT invoice, contract, or payment request.
justification for the claim – confirmation of the existence of a contractual relationship between the parties and fulfillment of the obligation by the creditor.
information about attempting an amicable dispute resolution.

In addition, if the lawsuit is sent to a traditional court, the following should be included:

attachments in the form of all evidence mentioned in the lawsuit, including proof of payment of the lawsuit fee – its amount depends on WPS, as shown in the table above.
a copy of the lawsuit along with attachments, which the court will then deliver to the defendant.
optionally: a request to examine witnesses.

Two-instance model of judicial proceedings in Poland

Polish legal proceedings are based on a two-instance model, which means that both parties in a dispute have the right to appeal a ruling or judgment issued by the first-instance court. In the case of rulings, a complaint must be filed within one week from the date of announcement or delivery, whereas for judgments, an appeal can be filed within an extended period of two weeks. The case is then reviewed by a second-instance court, which has the authority to take the following actions:

dismiss the appeal, thereby upholding the validity of the ruling or judgment issued by the first-instance court;
accept the appeal and, after a thorough examination, modify the ruling or judgment issued by the first-instance court;
refer the case back for reconsideration by the first-instance court.

A judgment issued by the second-instance court is final and non-appealable, effectively concluding the legal proceedings. There are only specific circumstances in which the judgment of a second-instance court can be challenged by means of an extraordinary appeal measure, namely the filing of a cassation appeal with the Supreme Court. However, certain formal requirements must be met for a cassation complaint:

in property rights cases, including debt recovery, the amount sought must be no less than 50,000 PLN.
the deadline for filing a cassation appeal is two months from the date of the judgment.
grounds for filing a cassation complaint are not errors in factual findings but violations of substantive law due to incorrect interpretation or misapplication of the law or violations of procedural rules, provided that such violations could have had a significant impact on the case’s outcome.
a cassation appeal must be prepared by a professional representative, such as a legal advisor or attorney.
the complaint should include: identification of the judgment being challenged, whether it is challenged in its entirety or partially; presentation of the grounds for cassation and their justification; a request for the annulment or annulment and modification of the judgment, specifying the scope of the requested annulment and modification. Additionally, two copies of the complaint must be provided for the records of the Supreme Court and the Attorney General.
a cassation appeal is filed with the second-instance court that issued the challenged judgment, which then forwards it to the Supreme Court.

The Supreme Court decides on accepting or rejecting a cassation complaint in a non-public session. A cassation complaint will be accepted for consideration if:

there is a significant legal issue in the case;
there is a need to interpret legal provisions that raise serious doubts or lead to inconsistencies in court rulings;
there is a procedural irregularity or invalidity;
the cassation appeal is evidently justified

The Supreme Court reviews cassation appeal in a non-public session unless there is a significant legal issue in the case or the complaining party has requested a hearing. If a cassation appeal is accepted, the challenged judgment is annulled in whole or in part and remanded for reconsideration to the court that issued it, including judgments issued by the first-instance court. If the basis for violating substantive law is evidently justified, and the cassation complaint was not based on a procedural violation or if that basis is found to be unjustified, the Supreme Court may, at the request of the complaining party, annul the challenged judgment and decide on the merits of the case, effectively concluding the judicial proceedings.

Execution Conducted by a Court Bailiff

A judicial order for payment, decision, or judgment officially obligates the debtor to settle the specified amount, typically within two weeks from the date of issuance or delivery of the relevant document. In cases where the debtor fails to repay the debt, enforcement proceedings become necessary. Obtaining an enforceable title, usually in the form of a valid order for payment, decision, or judgment accompanied by an enforcement clause, is required. With this enforcement clause, a court bailiff can initiate various enforcement measures, primarily to recover the owed amounts from the debtor’s bank accounts, benefits, salaries, movable and immovable property, as well as their property rights.

The scope of activities carried out by a court bailiff is relatively extensive. Initially, they must identify the debtor’s assets and determine the best method for executing the enforcement. To achieve this, court bailiffs collaborate with various institutions, including:

social Insurance Institution (Zakład Ubezpieczeń Społecznych or ZUS)
central Vehicle and Driver Registration Database (Centralna Ewidencja Pojazdów i Kierowców or CEPiK)
OGNIVO – a system created by the National Clearing House, which provides court bailiffs with information about the debtor’s bank accounts.

The next step involves enforcement measures taken by the court bailiff. To satisfy the creditor, the court bailiff can collect the owed amounts from various sources, including the debtor’s bank accounts, benefits, salaries, movable and immovable property, as well as their property rights.