In comparing a court ruling and a payment order, the speed of transactions and reduced costs clearly favor the latter. This is also the primary legal tool for banks to claim debts from borrowers. Let’s explore how a payment order works in practice, its differences from a “regular” court ruling, and how the debtor can defend against it.

1.What is a payment order?

A payment order is a judicial act issued upon a creditor’s request to legally establish their claim against a debtor, allowing for forced execution on the debtor’s property to recover the debt. It’s important to note that a payment order is not a court ruling since the debtor isn’t summoned to present their defenses. Consequently, it doesn’t create a legal precedent, meaning the creditor’s monetary claim isn’t considered established for use in future disputes.

Moreover, a payment order is immediately enforceable upon issuance, meaning no legal remedies need to be pursued or waiting for deadlines to pass, preventing loss of valuable time and ensuring the creditor can satisfy their claim from the debtor’s property. However, this immediate enforceability can be suspended if the debtor files a request for suspension, partially overturning its immediate enforceability.

2.What is the process for issuing it?

For a payment order to be accepted and issued by a judge, specific legal requirements must be met:

• It must involve private law claims—not involving the state or public entities.
• The creditor’s claim against the debtor must be substantiated with public/private documents. Public documents are typically those issued by public officials, such as notarial documents or official medical reports.
• A request for protective measures accepted against the debtor can also prove the claim, but only if the debtor explicitly accepted it.
• Requests for payment orders can only be submitted to the Single-Member Court from September 16, 2024, onwards, as peace courts are abolished under the new judicial map.
• Supporting documents proving the creditor’s claim must accompany the request=otherwise, the judge may require the creditor to provide them later.
• Documents must be genuine and certified (if copies, they must be dated and verified by a lawyer or public service center).

3.When does a judge reject the application?

It is not uncommon for a judge to reject the creditor’s application, thereby not issuing the requested payment order. This can occur if the creditor’s claims are not supported by the documents submitted to the court, especially if the claim is described ambiguously or is not clearly defined regarding the principal amount, interest, and costs. Another example is if the claim depends on a condition or deadline that has not yet occurred or cannot be proven to have occurred based on the submitted documents.

Additionally, the application may be rejected if the judge asked the creditor to supplement their documents or provide explanations, and the creditor failed to do so or refused. This includes not verifying the authenticity of the signatures on the documents, which may lead to them being considered fraudulent. In such objective cases, the judge rejects the application and notes the reason for the rejection. The same notation must be made if the application is rejected for any of the reasons mentioned earlier.

Importantly, the rejection of the application does not create res judicata concerning its unfounded or inadmissible nature. Therefore, the applicant creditor can return to court with a new application for a payment order without limitation, which, if it meets the legal requirements, will be accepted by the court. The same applies to filing a lawsuit against the debtor, even if the issuance of the payment order against them was rejected. Consequently, a lawsuit and a payment order develop an independent relationship when they occur within the same legal context.

4.Does the debtor have a defense against the payment order?

To assist the debtor, who cannot present their claims during the issuance of the payment order, the law allows them the opportunity, even belatedly, to file an objection against it and request its annulment. Regarding the objection, the law stipulates that:

• The objection is filed in the competent court, determined by the amount of the monetary claim for which the payment order was issued. The jurisdiction is based on the location where the payment order was issued, as indicated in the order itself.
• The deadline for filing the objection is 15 days from the delivery of the payment order to the debtor, and 30 days if the debtor resides abroad.
• In their objection, the debtor can raise reasons concerning the validity of the payment order—such as it not being served in a timely manner or being served to someone other than themselves, who was unable to comprehend the delivery, thus rendering it invalid.
• The debtor can also present substantive arguments regarding the creditor’s claim, such as that the documents provided do not adequately prove the claim, that the claim has expired, or that the debtor has already settled the claim long ago.
• If the debtor wishes to raise additional arguments against the payment order, they can submit a document with these additional reasons up to 8 full days before the discussion of the previously filed objection. With the additional arguments, they can only elaborate on the claims made in their initial objection; they cannot present new claims to the court for the first time.

5.Can the debtor request a suspension?

A very important consequence of the objection to the payment order is that it allows for the request for a suspension of the enforceability of the payment order—meaning that no seizure or auction of the debtor’s property can occur if the court grants the suspension request. It is important to note that only the filing of the objection has a suspensive effect (if accepted by the court), not the deadline for filing the objection, unless the payment order was issued against a person with an unknown address or residing abroad.

The suspension request will be adjudicated under the procedure for precautionary measures, which we have discussed before. This means that the judge only needs to determine that the applicant would suffer irreparable or particularly serious harm from the enforcement of the payment order to collect the debtor’s debt. Additionally, the judge must find that the objection against the payment order is valid and will be accepted in substance, leading to the cancellation of the payment order when the case is heard.

A request for suspension of the payment order can also be granted at the appellate level, that is, after the objection is rejected in the first instance and the applicant appeals the decision for the case to be re-evaluated by a higher court. The suspension of the payment order will last until a final decision is issued by the court regarding the status of the objection to the payment order.

6.Does the payment order need to be communicated to the debtor?

The rule regarding a payment order is that it must be served to the debtor twice to have strong legal grounds and avoid being overturned by a future objection from the debtor. Specifically, the payment order must be delivered within two months of its issuance for the debtor to be informed. If not served within this timeframe, the order automatically loses its validity.

If the debtor does not file an objection after the first delivery, this is beneficial for the creditor, as they typically would not need to serve it a second time. However, the creditor has the option to serve it again to establish legal precedent between the parties, meaning that what the court ruled regarding the creditor’s claim cannot be overturned by another decision and can serve as evidence in future disputes.

If the payment order is served a second time, the debtor can object, but cannot request a suspension of the order at this stage (that could only be done after the first delivery). If the debtor does not file an objection the second time, the order cannot be contested by any legal means other than a rare retrial.

7.Does the payment order interrupt the statute of limitations?

As mentioned in other writings, the statute of limitations can be interrupted under certain conditions when a claim is filed. The same applies to a payment order, where its delivery to the debtor interrupts the statute of limitations for the claim—the time that has passed before the order’s delivery is considered as not having elapsed, and a new limitation period begins afterward.

If the payment order is served to the debtor twice and no objection is filed, as discussed earlier, it gains legal precedent, and the creditor’s claim is definitively established. This means that the statute of limitations for the creditor’s claim will now be 20 years, regardless of any shorter statutory period that might have originally applied.

In the unfortunate event that the payment order is annulled following a valid objection from the debtor, the law provides a temporary solution. It states that the statute of limitations for the creditor’s claim is considered suspended from the time of the payment order’s delivery until the final court decision on the objection, meaning until the appeal court rules on the matter.

8. How does a payment order help when owed salaries?

A special case of the payment order is provided for outstanding wages from an employment contract. Specifically, the law stipulates that:

• The existence of the employment contract and the amount of the agreed salary must be proven in order to calculate the total wages owed to the employee.
• These elements must be demonstrated with public or private documents or through a court decision on precautionary measures accepted against the employer, provided that the employer acknowledges it in court.
•  The employee must also have sent a formal notice to the employer at least 15 days before filing the application for the issuance of the payment order.
• The employee does not need to prove that they actually provided their services to the employer, as this is legally presumed to have occurred; thus, only the aforementioned points need to be proven.
• In all other respects, the general provisions regarding the payment order apply, and it is important to note that if the hearing is postponed, the new hearing must be scheduled within 30 days from the date of the postponement.

9.Can I enforce the decision against the debtor?

The judicial decision and the payment order, while having critical differences, also present several similarities. More specifically, once the payment order acquires res judicata, forced execution can then occur against the debtor’s assets to collect the creditor’s claim. The execution can take various forms depending on the (legal) route chosen by the creditor.

Thus, the creditor may seek to liquidate the debtor’s assets through the sale of the latter’s property at auction. This process can be applied regardless of whether the asset is movable or immovable. Additionally, if the debtor owns real estate, the creditor can request the court to place the property under forced management, thereby making the proceeds belong to the creditor.

Another characteristic of the payment order is that the creditor can register a mortgage pre-notice on the debtor’s property, which we have discussed in detail in another of our texts. At the same time, the creditor has the option to impose a conservatory seizure of movable or immovable property that is in the possession of the debtor or a third party who is contractually connected to the debtor (a common example here is the seizure of the debtor’s bank deposits held by the bank as a third party).

10.Is there something similar for rental disputes?

A payment order can address the satisfaction of a monetary claim from the debtor; however, for rental disputes, there is a corresponding legal remedy called a “eviction order.” The conditions set by law for issuing such an order are as follows:

• The tenant must be in default due to reluctance to pay the rent to the property owner.
• The lease of the property must be evidenced in writing, at least with a private document that has a certain date, so it is clear when it was drafted.
• The owner must have served a formal notice via a court bailiff to the tenant at least 15 days before submitting the request for the issuance of the eviction order.
• If the owner has previously issued several orders against the same tenant that were not executed for various reasons (e.g., due to a settlement), the owner is only required to serve a formal notice to the tenant the first time.
• If the tenant pays the outstanding rent before the request for the issuance of the order is made, the order cannot be applied for, and if it is, it will be dismissed as inadmissible. However, if the tenant repeatedly fails to pay the rent, then despite payment within the 15-day period, the owner’s eviction order will be accepted.
• Many provisions of the eviction order are similar to those of the payment order, so they apply correspondingly to this legal remedy as well.

Next to the client and his needs.

Athina Kontogianni-Lawyer

The above does not constitute legal advice, and no responsibility is assumed for it. For more information, please contact us.