Recovery of debts

Before entering into the proceedings it should be exemined, whether it makes a sense to start it at all respecting the available documentation (contract, circumtances of  fulfillment, invoices, etc.).

If the debtor is a company, an extract from the company register should be obtained anyway, because it may help to make certain, wether there is a chance for successful recovery and what kind of recovery proceedings seems to be reasonable (e.g., wether the company is already under liquidation or not, how high is its primary stock, how long has it been established, who are the members etc.).

Court process

It may be started either by warrant  for payment or by claim. If the amount of debt doesn't exceed HUF 1.000.000, the warrant for payment is generally the only way. In lack of contradiction by the debtor the warrant of payment becomes final and has the legal force of a final court decesion.

In case of contradiction the process will be transformed to suit. If the amount of debt exceeds HUF 1.000.000 a claim may be filed directly.

Costs

• fee of warranty of payment - 3 per cent of the debt, max. HUF 450.000
• process duty - first instance - 6 per cent, at most HUF 900.000 (in case of a prelimiary warranty for payment it's fee shall be included)
• process duty - second instance - 6 per cent, at most HUF 900.000
• execution fee (court fee and bailiff's fee included) - 10-15 per cent of the debt
• probation costs (witnesses, experts etc.)

In case of success costs have to be born by the debtor.

Liquidation

A liquidation process can be initiated, if the debtor not disputing the demand doesn't pay it even within 15 days after expiration and reminder. This step has only a sense if according to the available information the debtor seems not to be interested in being liquidated.

The steps of proceedings

• filing an application for liquidation with the competent court. In this phase the debtor cannot dispute the demand anymore but may apply for a payment time-limit
• in lack of such application or if the debtor doesn't reply to the court's reminder or if the application is refused by the court, the court orders and publishes liquidation

The deptor has then usually 40 days for announcement of his claim. A liquidation process takes 1-3 years.

Costs

• court fee and costs of publishing - HUF 75.000 (if  the liquidation has been applied for by a third party, these costs shall not be ommitted)
• notification of creditor's claim - 1 per cent of the total demand (capital, interests, costs)  but HUF 100.000 at most

Other eventual expenses in both proceedings

• translation costs - about HUF 3.000/page
• extract from the company register or land register or copy of other official documents
• lawyer's fee - usually 5-10 per cent of the amount in dispute