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Doing Business guide in the Baltics

Debt Recovery in Lithuania

 

In Lithuania the most popular form of covering debt through the court is the Compulsory Execution of Obligations in Accordance with Warning Procedures. This form is the most popular because in cases where the debtor does not have any objection against the debt and is reachable in his address the length of the process will take about 1,5 month and it is the cheapest (the stamp-duty is ¼ of the claim value). If the application is denied it is possible to continue ordinary court proceedings without losing the paid stamp-duty.

 

If the amount of the debt is less than 5000 LTL (about 1448 EUR) recovery of the debt is possible by Simplified procedure for a Small Amount Claims that offers faster possibility of ….. in  written form.

 

Court proceedings in Lithuania in first instance can last from 2 to 9 months and final adjudication is made within approximately 2 years, possibly longer. Legislation provides the possibility to protect oneself from the negative actions of the debtor and to ask the court to apply the temporary protection measures. Therefore if the property and bank accounts of the company would be arrested it is possible to ensure that in the case of a positive judgment the debtor will have property or funds secured for covering the sum adjudged by the court. Submission of the application for the temporary protection measures is possible at any stage of the litigation or even prior the submission of the claim. The decision of the court might be implemented promptly by the bailiff.

 

The “might” in the last sentence is out of place, it doesn’t give an idea of whether or not prompt implementation is likely.

 

“The decision of the court is likely to be implemented quickly be the bailiff.”

Or

“The decision of the court will most likely take some time to be implemented by the bailiff (give indication of weeks, months, etc).”

 

Another possible avenue for recovering funds is submission of the application on the debtor insolvency or at least to send a warning letter on starting the insolvency proceedings if the debt will be not recovered within a 3 weeks period. This is a very serious and effective means of debt recovery in cases where the debtor would like to continue economic activity. But it is necessary to remember that where insolvency proceedings are commenced, debt will cease to grow and it will be required to divide the recovered money between other creditors. Insolvency proceedings can take few years.

 

There is also a European Small claims procedure for cases in which the creditor and debtor are in different countries and the claim is not exceeding 2000 EUR. The procedure is written and oral hearing is only an exception. This procedure is rather fast since the judgement has to be recognized and enforceable in any Member State.

For questions, please, contact Valters Gencs, attorney at law at info@gencs.eu


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The material contained here is not to be construed as legal advice or opinion.

© Gencs Valters Law Firm, 2016
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