Is it worth consolidating files in the Execution Office?
A person against whom several Execution Office files are pending simultaneously can ask the Registrar of the Execution Office to perform a consolidation of files for them. The purpose of the procedure is to centralize all debts and regulate payments. However, this is not always the right solution, and the Registrar does not approve every request.
Additional information and forms can be found on the website of the Enforcement and Collection Authority (Execution Office).
What exactly is the process of consolidating files in the Execution Office?
Consolidation of files is a legal procedure that allows a debtor to pay one fixed monthly amount. This amount matches their financial ability and replaces dealing with each file separately. The purpose of the procedure is twofold: to protect the debtor from multiple proceedings and financial harm, and also to ensure that creditors receive their money in an orderly manner.
Upon approval of the request, the debtor deposits 3% of their total debts. After that, the Registrar of the Execution Office sets a fixed monthly payment order for them. The Execution Office receives the payment and distributes it to the creditors according to their relative share of the debt. Important note: Certain debt files, such as alimony or mortgage, are not included in this arrangement.
The advantages and disadvantages of consolidating files
This procedure has clear advantages and disadvantages. It is important to consider them carefully:
✅ The main advantages:
- One monthly payment: The debtor stops dealing with multiple creditors and files and moves to one fixed payment.
- Delay of proceedings: The order usually delays all other collection proceedings against the debtor (such as wage or bank account attachments).
- Certainty and peace of mind: The procedure allows the debtor to plan their finances anew.
❌ Disadvantages and limitations:
- Delay of departure from the country: The Registrar almost always issues an order preventing the debtor from leaving the country.
- Financial restrictions: The debtor is declared a “debtor with limited means.” They are prohibited from using credit cards or checks.
- Seizure of assets: The Registrar is entitled to impose a seizure on the debtor’s assets (such as a vehicle) that were mentioned in the request.
- Public registration: The debtor’s name is entered into a database of restricted debtors, which harms their credit rating.
Is consolidating files in the Execution Office the right solution?
Consolidation of files is an effective procedure for a debtor who has difficulty meeting payments, but *does* have some ability to repay. There are cases where it is better to choose another procedure:
- Declaration of a debtor with limited means: A similar procedure, but sometimes only a “way station.”
- Insolvency proceedings (bankruptcy): This is a more comprehensive solution. It is intended for debtors who are unable to repay their debts at all and whose goal is to reach a discharge (debt cancellation).
Drowning in files? Don’t act alone.
A wrong choice of procedure can lead to unnecessary sanctions and a waste of valuable time. Before submitting a request for consolidation of files, it is mandatory to consult with an attorney specializing in Execution Office law. Our firm will examine your financial situation, recommend the right path, and manage the process with the collection authorities.
The content of this site is intended for informational purposes only, it does not constitute legal advice and is not a substitute for legal advice provided by an attorney.
