If the EU Brussels Ia Regulation or a specific international treaty does not apply to the recognition and enforcement of a foreign judgment in Hungary, the provisions of the Hungarian Act XXVIII of 2017 on private international law („PIL Act”) shall be applied to third country judgment. In the following, we describe the procedural rules applicable to the recognition of third country judgments and its relation to enforcement.
It is often the case that a Hungarian company owes money to a foreign creditor. In such a case, the foreign creditor may have more legal options (for instance a litigation, liquidation proceedings), however, these procedures can be lengthy, and involve significant costs before a creditor can obtain an enforceable judgment. In this article, we will explain how to enforce a claim without the above procedures.
Considering that more and more Hungarian companies trade with foreign companies around the world, the number of cross-border disputes is also rising. Consequently, it is becoming common for a Hungarian company to be sued abroad. But how can you enforce the foreign civil law judgments in Hungary?
A potential plaintiff, who intends to initiate a civil law litigation against his debtor in Hungary, often aims to enforce the Hungarian judgment only in Hungary. However, a Hungarian judgment may be enforced also in other EU or EEA Member States without any intermediary procedure ('exequatur'). Moreover, a Hungarian Judgment may be also enforced in a third country which recognises the Hungarian Judgment.
As many people know, enforcement can be requested on a final judgment. Furthermore, in case if the debtor did not raise any objection against the order for payment in 15 days the order for payment has the same force as a judgement from the court, and the creditor can enforce it. But how exactly can enforcement be requested and what are the costs? These and other questions will be examined in this article, which summarises how to enforce a domestic judgment in Hungary.
Limited liability companies are a popular form of business in Hungary, often because of the limited liability of the members, the founders and owners of the company. In the course of their business activities, their private assets and the assets of the company are separated, so that they are not, as a rule, liable for the debts of the company. The liability of the members is therefore limited, but how and why is the managing director (CEO) of the limited liability company liable? In this article we will look at this question.
Foreign creditors often come to us with saying that they have a debtor in Hungary, or that the debtor has assets in Hungary and intends to initiate legal proceedings against it. When analysing the initiation of a civil action, the question often arises whether the debtor can be sued in Hungary?
The aim of the liquidation procedure is to dissolve an insolvent debtor without legal succession and satisfy its credits, not to recover claims. However, creditors in Hungary use liquidation applications instead of or as well as classical court procedures (i.e., orders for payment and civil litigation) to recover monetary claims from debtors. How to recover a claim by way of a liquidation procedure and why to choose this procedure instead of the above-mentioned classical procedures?
If you, as a Hungarian company, want to recover your claim against your Hungarian debtor, there is a question of which proceedings to initiate against the debtor. In this short article we give 3 reasons why you should choose order for payment procedure for collecting claims in Hungary.
If you have a debtor in Hungary, there are more legal options to recover your claim. In this short summary we provide a brief overview of the most efficient legal ways of debt collection in Hungary.
In the recent years of crisis, it's becoming more and more common that your business partners fail to pay your invoices. After getting bored of their excuses or silences, there comes a time when you have to put pressure on your debtor. At that point, you either hire a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. But are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why you should hire rather a law firm in Hungary instead of a collection agency.
Measures taken due to the corona virus in recent weeks in Hungary affected the enforcement of securities over real estate, as well. The Governmental Decree regarding this matter provides more assistance to the Debtors who got into trouble due to State of Emergency to overcome the difficult period and may affect indirectly the enforcement proceedings started earlier, weakening the chances of creditors to satisfy their secured claims within reasonable time.
Can the unfairness of cross-border claim be reviewed ex officio in case of consumer contracts in such a simplified procedure, like the European order for payment procedure? In our article, we analyse the recent judgement of the Court of Justice of the European Union in the Bondora case and its possible effects on cross-border debt recovery, covering also the Hungarian legal regulations.
You can hear a lot of stories where the debtor “escaped with the money”, the construction contractor “disappeared” or the debtor company’s assets have been hidden. Essentially, failure to pay is a breach of contract, which is subject to civil action, eg. litigation. However, if a transaction is suspected to be a scam, criminal proceedings may be brought against the defaulting debtor, for example, for fraud, which we examine in this article.
Even winning a lawsuit and having the positive judgment in your hands are of no use if the debtor company is terminated in the meantime. In this case, the "winning" judgment will only be a worthless piece of paper, despite that you have spent a fortune on debt recovery. In this short article, we summarize the most important rules and deadlines so that you can avoid staying empty-handed at the end of the debt collection in Hungary despite winning the lawsuit.
It has been one of the most annoying things for Hungarian companies that they had to pay Value Added Tax (VAT) in case of unpaid claims as well, so even if the invoice has never been paid by the business partner. Fortunately, from 2020, the above rules will change, and it will be possible to refund the VAT already paid on uncollectible claims. In our article we summarize the details.
One of the annoying things in business is when your invoices are not paid by your business partners. After getting bored of their excuses, there comes a time when you have to put pressure on your debtor. At that point, you either entrust a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. Are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why hire rather a law firm in Hungary instead collection agencies.
The initiation of a liquidation procedure is an effective debt collection method, since the debtor may only avoid being liquidated by paying the claim if the conditions specified in the Act on Bankruptcy Proceedings and Liquidation (Bankruptcy Act) are met. For this reason, in the case of liquidation, one of the most common defences of the debtor is the reference to offsetting. But can the debtor refer to offsetting without limitation during liquidation? In our short article we answer this question.
Has your debtor just gone bankrupt? Has he alienated his assets to a foreign company before that? When can you sue the latter in your home country for concealment of assets to avoid an expensive foreign litigation? In its judgment in the Feniks case the Court of Justice of the European Union, answers the above question, which we summarise in our article.
For a long period, it was very comfortable in cross-border litigations that in most cases translation was necessary the Hungarian state advanced such costs, or even provided translation entirely for free. However, this possibility came to an end with the new civil procedure act. If you plan to start a cross-border litigation, or need translation in a Hungarian litigation for any reason, better to prepare for extra costs from now on.
The Devil is always in the details. The truth of the old adage is proven by the new bill adopted by the Hungarian Parliament during the hot summer sessions of July 2018. The new law amending the Bankruptcy Act modifies only one section of the liquidation procedure, but it will further erode the already low paying moral in Hungary, giving more months of grace to non-paying debtors.
When, why and how can you start liquidation procedure against your non-paying customer in Hungary? How long can you register your claim? What are the chances that you get your money in liquidation? We summarized the 6 must-knows of liquidation procedures in Hungary in this article.
From 2018 the small claim collection rules are changing in Hungary, and foreign creditors must comply with residency conditions so that they can start payment warrant procedure. At the same time, businesses do not have to waste time before starting litigation. Read our summary to know more on this topic!
From 2018, the threshold of the mandatory small claims regime is increased to HUF 3 Million in Hungary. In addition, foreign creditors must meet further residency conditions to start this cost-effective on-line debt collection method. But what to do if you do not meet these conditions? Read our latest article for the answer!
Global businesses belongs to our everyday life. We enjoy the advantages of our modern world, however, we must never forget its dangers. In this article we draw your attention to those basic points we suggest to check before doing business with a Hungarian company, to avoid losing money. Some of them may seem evident, however, our advices are based on real cases.
Internet banking is part of our daily life, and sometimes it happens that you send money to the wrong person because of various reasons, such as mistyped bank account number or other error. If the wrong payment is done, it is good to know, how to find the “lucky guy” who possesses your money, and how to claim it back from him. In this article we shed light on this issue by showing that mistaken payment is not lost money.
What is enough basis for a Hungarian judge to issue a freezing injunction? Is the preliminary hearing of the parties obligatory before issuing the court order? What are the costs and time frame of the procedure?
What kind of freezing injunctions can be sought in Hungarian business litigations, and what are their effects to the defendant?
Nothing is worse than a won court battle, if during litigation the defendant had time to dissipate its assets. To prevent this in a Hungarian business litigation, you can seek a freezing injunction, and your defendant cannot frustrate the judgment when it comes to enforcement. If you want to know the details read further this article, which is the first part of a three-part article series in this matter.
Imagine the situation that you have a non-prospering company without perspectives. The mass of non-paid invoices is just bigger and your company cannot pay taxes. In this case the best option just to shut down the company and say goodbye to Hungary thinking that you are not liable for your company’s debts. However, the situation is not so simple, and leaving just the company behind may be risky. In this short summary we summarise the legal aspects of company shutdown which is worth to read before the “close-shop”.
Although, liquidation is one of the most powerful debt collection tools in Hungary for recovering solid claims, creditors often make mistakes that give rise to unfavourable court decision, declining liquidation request and directing the claim towards ordinary courts. Given that this means loss of valuable time, we gathered those common mistakes that you should avoid by any means.
There is no worse feeling after a won court case than realizing that your debtor is not going to pay, because it has no assets at all or, even worse, it has been already deleted from the company register. In this short article we provide you with 5 tips to avoid writing-off uncollectible debts in Hungary.
In most jurisdictions starting liquidation or bankruptcy against a non-paying debtor might be the very last step after having exhausted all other less threatening debt recovery methods. Although the result of the liquidation is the total financial destruction of debtor, this is a very popular debt recovery tool in Hungary for those creditors who have solid claim and would like get their money fast. We summarise details in this article.
The worst nightmare of every creditor after a successful litigation is to find out that the debt cannot be recovered, because the debtor has no assets. However it might be that the case is not lost: in case that the court establishes that the contract is fraudulent, it has no legal effect in respect of the creditor. In our short summary, we address the question, when the contract shall be regarded us fraudulent under Hungarian case-law.
In this short summary we tell the 5 must–know tips that a creditor should bear in mind before starting collecting debt in Hungary. There are different legal ways available, and by answering these questions you will be able to find the legal way that best matches your interests.