Hungary: Bad news for debtors – it pays to enforce even smaller claims
The competence to issue "payment orders" was shifted from the Hungarian courts to the public notaries approximately one year ago. At the same time, the possibility was introduced to request payment orders by email with digital signatures. As a consequence of these changes, in the first half of 2011, the public notaries have issued more than 310,000 payment orders.
The procedure is now much quicker and more efficient than it used to be, which means that even relatively small claims are worth enforcing.
According to the Chamber of Hungarian Public Notaries, debtors do not object to the payment order in 95% of the cases. This means that in 95% of the cases, the creditor may proceed to judicial execution within 5 to 6 weeks of requesting the notary to issue the payment order.
The general rule is that, for claims of less than HUF 1 Million (ca. EUR 3,700), the claimant may not turn directly to the courts but must first go through a payment order procedure. The public notaries charge 3% of the claim, which is half of the court fee in the case of litigation. Furthermore, the fee of the notaries is capped at HUF 300,000 (ca. EUR 1,100).
When a debtor receives a payment order, it has 15 days to object. The objection changes the procedure into traditional litigation – but currently this happens in only 5% of the cases.