Managing overdue monetary claims: A practical guide to the order for payment procedure

Managing overdue monetary claims: A practical guide to the order for payment procedure

Basic conditions of the procedure

The conduct of the FMH is subject to strict statutory conditions regulated by Act L of 2009 (Fmhtv.), with the provisions of the Code of Civil Procedure (Pp.) serving as its underlying legislation that must be appropriately applied. The procedure is exclusively for the enforcement of overdue monetary claims. An additional fundamental condition is that the obligor must have a domestic address for service – a domicile or place of residence for natural persons, and a registered seat or representation for legal entities.

When is it mandatory and when is it optional?

To relieve the burden on the courts, the legislator has directed smaller claims towards the notarial procedure. Determining the value limits is crucial, as the choice of procedural path is based on this.

Only the principal claim is included in the value of the subject matter of the dispute, accessories are disregarded. Based on this, if the amount of the principal claim is below HUF 3,000,000, it can exclusively be enforced in the form of an order for payment, and a civil lawsuit cannot be initiated directly. In the case of a claim between HUF 3,000,000 and HUF 30,000,000, the claimant has the right to choose whether to request an order for payment or to directly initiate a civil lawsuit. If the amount of the claim exceeds HUF 30 million, the use of this procedure is legally precluded; claims of such value can only be enforced through civil litigation.

Initiating the procedure

The conduct of the procedure falls within notarial competence. The entire process is automated and operates through the electronic system of the Hungarian Chamber of Civil Law Notaries (MOKK). The format for submitting the application depends on the person of the claimant; accordingly, electronic submission is mandatory for legal entities (and natural persons acting with legal representation), while natural persons may also submit the application on paper or orally before any notary public.

Since the notary public does not examine the evidence or the legal basis of the claim on the merits, the procedure is extremely fast. If the application is fully compliant, the order for payment is issued within 3 days electronically, and within 15 days in the case of a paper-based submission.

Deadlines and legal consequences

The service of the order for payment to the obligor has the same legal effect as the communication of a statement of claim. The obligor has 15 days from the date of service to satisfy the claim or to file a statement of opposition against it. Accordingly, the procedure can conclude in two ways:

  1. Becoming final and binding, and enforcement

If the obligor does not file a statement of opposition within the 15-day deadline or acknowledges the debt, the order for payment becomes final and enforceable. Its legal force is equivalent to that of a final and binding court judgment. Following this, the claimant may immediately request the notary public to order enforcement, which the chamber of notaries (MOKK) transmits electronically and swiftly to the system of the Hungarian Court Bailiffs Chamber (MBVK). A trouble-free procedure can be concluded in an average of 45 days.

  1. Statement of opposition and transformation into a civil lawsuit

If the obligor disputes the claim and files a statement of opposition within the deadline, the notarial non-contentious procedure automatically transforms into a civil lawsuit and continues before the court with jurisdiction. In this case, the burden of proof shifts to the claimant: they must substantiate the legal basis and the amount of the claim before the court with documentary evidence and witnesses.

The order for payment procedure is an excellent, cost- and time-saving tool for the enforcement of undisputed claims. At the same time, before initiating the procedure, the claimant must always be prepared for its possible transformation into a civil lawsuit.

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Managing overdue monetary claims: A practical guide to the order for payment procedure

Managing overdue monetary claims: A practical guide to the order for payment procedure

When enforcing overdue monetary claims, the time and cost involved in court litigation often act as a deterrent for the claimant. However, the Hungarian legal system provides a faster alternative that dispenses with the taking of evidence, known as the order for payment procedure (FMH).

This substitute for litigation, a simplified civil non-contentious procedure, is one of the most effective legal tools for enforcing claims, provided that the obligor does not contest the debt on the merits.

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