Enforcement proceedings are initiated by a domestic or foreign creditor filing a motion for enforcement with the court. The court then decides on the creditor’s motion and if it grants the motion, it issues an enforcement order authorizing the proposed enforcement.

Enforcement proceedings (and thus enforcement of the debtor’s obligations) can be initiated by the creditor in two ways, depending on the basis on which he files the motion for enforcement:

• enforcement on the basis of an authentic instrument or
• enforcement on the basis of an enforceable title.

The most common way of filing a motion for enforcement is through the web portal “eSodstvo” and in that case the court fee is 44 euros. It is also possible to file a motion for enforcement in writing, in which case the court fee is 55 euros. A court fee should be paid when filing a motion, but no later than eight days from the service of the order for the payment of the court fee, otherwise the court will not consider the motion. Motion based on an authentic instrument should always be submitted or sent to the District Court in Ljubljana, Central Department for Authentic instruments, on a special form. The jurisdiction for filling a motion based on enforceable title depends on the means and subject of enforcement (more often than not it is in the jurisdiction of the district court in whose territory the debtor has registered permanent residence).

1. Enforcement on the basis of an authentic instrument

The enforcement on the basis of an authentic instrument can be filed when the creditor has:

• an invoice,
• a bill of exchange or a cheque with protest and a return invoice when these are required for the origination of the claim,
• an official instrument,
• an extract from books of account certified by an authorized person,
• a private document authenticated according to the law and a document having the nature of an official instrument according to special regulations,
• a statement of account in respect of interest shall also be considered as an invoice,
• a written statement of account of regular income arising from an employment relationship in accordance with the law governing employment relationships.

It’s important to note that this kind of enforcement can only be filed to recover a sum of money, but not to compel the debtor to take any action, as may be achieved in the enforcement proceedings described under point 2.

2. Enforcement on the basis of an enforceable title

The enforcement on the basis of an enforceable title can be filed when the creditor has:

• an enforceable court decision (i.e., judgement or conclusion)¹ ;
• an enforceable court settlement² ;
• an enforceable notarial deed³ ;
• another enforceable decision or document designated as an enforceable instrument by the law, ratified and published international treaty, or legal act of the European Union that is applied directly in the Republic of Slovenia, for example a final and enforceable European order for payment, acquired by the creditor in his home country.

[1] Court decisions shall be enforceable when they become final and when the time limit has passed for voluntary performance of the debtor’s obligations.

[2] A court settlement shall be enforceable if the claim thus settled becomes due.

[3] A notarial deed shall be enforceable if the debtor agrees to its direct enforceability thereunder and if the claim arising from the notarial deed has become due.

This kind of enforcement procedure can be used to recover the payment of a sum of money or the fulfillment of some other obligation (for example eviction, return of a worker to work, enabling contact with children, demolition of a building etc.).

3. Enforcement order

Based on the creditor’s motion for enforcement, described in points 1 and 2 above, the court issues the enforcement order by which it permits enforcement to be carried out. The enforcement order specifies the following: the creditor and the debtor and their identification data, the enforceable title or the authentic instrument, the debtor’s obligation, the means and subject of enforcement, and other data necessary in order for the enforcement to be carried out.
The enforcement order is issued solely based on the creditors motion and said motion is not served to the debtor before issuing the enforcement order, but only at the same time as the order. Unlike civil proceedings, only subsequent adversarial proceedings are ensured, with the possibility of the debtor’s objection against the enforcement order, as described under point 4.

4. Objection as the debtor’s sole legal remedy

A debtor may challenge an enforcement order granting enforcement by lodging an objection, which must be adequately substantiated. The debtor shall specify the facts substantiating his objection and shall submit evidence in support thereof; otherwise, the objection is deemed to be unfounded.

The procedure differs greatly if the objection is logged against an enforcement order based on an authentic instrument or an enforceable title, that is why the two topics will be discussed separately.

4.1. Objection against an enforcement order based on authentic instrument

Since an order of enforcement based on an authentic instrument is issued solely on the basis of information submitted by the creditor in the motion for enforcement and the court has no way of verifying said information, the only thing the debtor has to do in his objection is object the merits of the claim and provide at least some evidence. In this case, the court annuls the enforcement order and orders the creditor to supplement the lawsuit (the motion for enforcement is considered a lawsuit, which the creditor must now substantiate in more detail: explain what the claim is based on and attach the relevant documents), and the case is referred to the trial court, where the proceedings continue as ordinary civil proceedings. Nevertheless, if the debtor does not file an objection within the prescribed deadline, the enforcement order becomes final and enforceable, with very minimal efforts and costs for the creditor.

4.2. Objection against an enforcement order based on enforceable title

A debtor may challenge an enforcement order granting enforcement by lodging an objection, which must be adequately substantiated. The debtor shall specify the facts substantiating his objection and shall submit evidence in support thereof; otherwise, the objection is deemed to be unfounded.

The court serves a copy of a complete and admissible objection to the creditor and instruct the latter to respond to it in 8 days. Since the creditor’s claim originates from the enforcement title (and for this reason the debtors need less protection, as it is more likely that the creditor’s claim really exists) referral to trial court is not necessary, and the enforcement court itself decides on the objection.

If the creditor fails to respond to an objection within a specified time limit, the court must deem the allegations in the debtor’s objection to be true. In his response to an objection, the creditor must indicate the facts and submit evidence on which he based his motion for enforcement; otherwise, the allegations in the debtor’s objection shall also be deemed to be true. The court can schedule a hearing to examine the objection or issue a decision without a hearing. The court then issues a decision to either grant or reject the objection or dismiss it as belated, incomplete or inadmissible. Both parties may appeal against the court’s decision, and the appeal is decided on by the higher court, whose decision is final.

5. Means of enforcement & restrictions of enforcement

In the motion for enforcement, the creditor must indicate what means of enforcement he is proposing (for example seizure and sale of movable property, sale of real estate, seizure of salary or funds in a bank account, fine in case of non-compliance with non-monetary obligations).

It is not necessary to specifically state on which accounts or banks, the debtor has assets, where he is employed and whether he has securities. However, if the creditor requests enforcement by selling the property, it is necessary to write exactly which property (plot, part of the building) should be sold.

The court may allow only the following means of enforcement for repayment of monetary claims: sale of movable property, sale of immovable property, assignment of monetary claims, realization of other property or tangible rights and dematerialized securities, disposal of a company member’s holding, and transfer of funds deposited on accounts with organizations responsible for payments.

The seizure of salary or funds in a bank account do not incur any additional cost to the creditor besides the court fee for filing the motion, that is why these two means are the most commonly suggested. If the debtor has enough funds in his bank account and/or receives a high enough salary, repayment of the creditor is relatively quick and easy. The problem arises if the debtor is over-indebted and has no funds in the bank account or even has no open bank account, if he is not employed or if he receives a very low salary. Regarding the latter the law states, that to recover the creditor’s monetary claim, it is allowed to seize up to two-thirds of the income (salary and other benefits), but with limitation that the debtor shall keep at least 76% of the minimum salary and, if the debtor is maintaining a family member or another person who must be maintained by the debtor according to the law, also the amount corresponding to the payment to which the person who the debtor maintains is entitled in accordance with the criteria for the provision of assistance benefits in cash defined by the Act governing social assistance benefits.

If the two above described means of enforcement are not successful, it is necessary to resort to other means of enforcement, normally seizure and sale of movable property (for example the debtor’s vehicles, movable property at the debtor’s residence etc.). Again, it may happen that the debtor does not have a register vehicle to his name and no movable property is found by the enforcement agent. If some movable property is found, it is usually sold on a public auction or it can also be sold by direct contract between the buyer and the enforcement agent. The longest and most expensive procedure is the sale of the debtor’s real estate and it can take up to a few years to be finalized, since the debtor has the most legal remedies in the selling process. Nevertheless, this is often the only way for a creditor to get the repayment of his major claims (especially if a mortgage has been set up to secure the creditor’s claim).

During the procedure, the creditor may propose new (additional) means of enforcement or items if the already proposed ones are not sufficient to repay the debt (for example in addition to the seizure and transfer of the debtor’s funds in a bank account he can also propose the sale of the debtor’s movables). A court fee in the amount of 30 EUR must be paid when applying for additional means of enforcement. To decide, whether propose all means of enforcement in the motion for enforcement, or wait and propose additional means later on, it’s important to know as much as possible about the debtors’ assets and adjust the plan of action to the circumstances of each case, to not incur unnecessary cost.

6. The costs of enforcement

It’s important to note that all the costs of enforcement shall first be paid by the creditor. The creditor has to, in addition to paying the court fee, make an advance payment (security deposit) for the costs of enforcement actions when required (according to the method, in the amount and within the time limit determined by the court). If the creditor fails to make an advance payment within the specified time limit, the court stops the enforcement procedure. The costs depend on which means of enforcement the creditor proposes in his motion for enforcement; the seizure of salary or funds in a bank account do not require any additional payment besides the court fee for filing the motion, that is why these two means are the most common means of enforcement, as already mentioned above. For seizure and sale of movable property the creditor has to make a security deposit for the actions of the enforcement agent. If the sale of the debtor’s property is successful, the costs are repaid to the creditor from the amount recovered from the sale, but if the enforcement is unsuccessful, these costs are borne by the creditor. The most expensive means of enforcement is the sale of real estate, where the court appraiser must estimate the value of the real estate, which can amount to over 1.000 EUR. Again, only if the sale is successful, the creditor will get these costs reimbursed.

Conclusion

To conclude, it’s important to obtain as much information as possible about the debtor’s assets before filing a motion for enforcement, since, based on this information, you can decide on which means it makes sense to propose the enforcement and this can strongly affect the duration and cost of the enforcement procedure. Because the deadlines for applications and actions are much shorter than in civil proceedings, it is also important to monitor the status of the proceedings after submitting the motion for enforcement and how much debt has already been paid, to avoid overpayment.

Questions regarding Slovenian business law or real estate law? We are happy to assist you with our partner:

Ana Lešnik Sitar attorney at law

Aleš Avbreht attorney at law