The attorney in Budapest sends the application electronically to the Hungarian Chamber of Civil Law Notaries which will forward it – after receipt of the relevant fee – to the appointed notary public. The notary public will issue the payment order – provided that the relevant requirements are met – within 3 business days in printed form and will send it to the debtor by mail.
The public notary’s competence in issuing the payment order is identical to that of the local court. The ruling made by the public notary is identical to that made by the local court. Each notary public has a general scope of competence to issue payment orders in the whole territory of Hungary.
Requirements for issue of payment orders:
Payment order proceedings are excluded and debts may only be recovered in civil (or labour) proceedings, as the case may be, using the services of an attorney in Budapest:
- if the obligor has no known place of residence or abode, or registered office or representation in Hungary;
- if a debt arising from employment relationship (public service, civil servant, etc. relationship) is a legal or disciplinary consequence applied as a result of establishing, amending, terminating or wrongful breach of such a legal relationship; and
- debts the value of which exceeds HUF 400 million cannot be enforced in this way unless they are settled in instalments.
The obligee may not bring an action and may enforce his claim only by a payment order, as the case may be, using the services of an attorney in Budapest if the debt in dispute (principal amount) does not exceed HUF 1 000 000 provided that:
- the obligor has a known place of residence or abode, or registered office or representation (address for service of summons) in Hungary, and
- the pecuniary claim does not arise from an employment relationship (public service, civil servant, etc. relationship).
If the obligor has no address for service of summons in Hungary, then also debts below HUF 1 million may only be recovered from him in a legal action.
If the debts arise from an employment relationship and are not excluded ab ovo from debts recoverable by a payment order, then the obligee have the free choice between a payment order and legal proceedings even if the sum in dispute is so small.
In all other cases, payment of overdue debts aimed at cash payment may be enforced also by a payment order, so the obligee does not have necessarily to bring legal proceedings through an attorney in Budapest, however, he may elect to choose this way of claim enforcement as well.
Opposition
Opposition is legal remedy against a payment order. No appeal lies against a payment order, however, the obliged party may file an opposition to the payment order issued to a notary public within 15 days of delivery of the payment order. Oppositions filed lately or containing improper information will be refused by the notary public.
As a result of an opposition filed in due course, the payment order proceeding will become a legal action in respect of its part opposed to. The obligee shall pay the duty on the legal action and present the facts of the case and the evidences therefor in detail, otherwise the court will terminate the action.
Payment order becoming final
If a payment order has not been contested within the stipulated time-limit or the opposition has been refused by the notary public, the payment order will become final and immediately enforceable.
Fees payable in payment order proceedings
The fee of payment order proceedings amounts to 3% of the debts but to minimum HUF 5 000 and maximum HUF 300 000.
As a general rule, the fee of the proceedings shall be paid upon the opening of the proceedings and then it shall be borne by the obligor based on the final payment order.
With reference to his financial and earnings position, the petitioner may file an application, simultaneously with the payment order, for a personal expenses registration right based on which he might be exempted from payment of the fee of proceedings in advance.
Ordering execution based on a final payment order (in addition to issue of the payment order) is also subject to payment of a fee. The fee amounts to 1% of the basis of the fee but to minimum HUF 5 000 and maximum HUF 150 000. The execution fee shall be advanced by the judgment creditor and shall be borne by the debtor as it shall be recovered as costs of execution.
If you have any questions relating to payment orders, you may contact our attorney in Budapest also via our online consultancy column.
