Provisional and executive payment decrees are powerful instruments for creditors who want to collect their debts. Under given conditions, payment decree is an injunction of payment valid as enforceable title. However, sometimes it is not sufficient to enable creditors to apply for bankruptcy procedures. Collect debts Advice by Law firm Rome.
A Payment decree is an injunction issued by a Judge
When the credit is based on written proof, the Judge issues a payment decree without hearing the debtor. Hence, the decree is based only on the documentation provided by the creditors. Once the injunction has been issued, the payment shall be done spontaneously by the debtor, within 40 days from the notification of the decree. On the contrary, the debtor can file appeal against the injunction within the same term of 40 days. Appealing the injunction, the debtor starts an ordinary proceeding, where full-defense and argument is granted. Collect debts Advice by Law firm Rome.
When the written proof provided by the creditor meets the requirements, stated in article 642 of the code of Italian civil proceedure (c.p.c.), the judge may order immediate due of payment. In this case, the injunction of payment is provisionally enforceable, and it can be enforced before the 40-day opposition term expires. If the debtor files an appeal, and the latter is not based on written proof, the provisional enforceability is not suspended.
The payment decree shall be always notified to the debtor
The proceeding creditor, who obtained a payment decree which is provisionally enforceable, may start execution against the debtor immediately, unless the latter pays spontaneously his or her debt. However, if the debtor’s appeal is accepted, the creditor will be obliged to return what has collected until the sentence. Collect debts Advice by Law firm Rome.
Enforceable title. Value and power of payment injunctions
Payment decree becomes enforceable when executive formula is applied by the clerk of the issuing Tribunal. “Executive formula” is an injunction stated by the clerk, addressed to any judicial officer. It is indispensable to enforce the title and, therefore, start execution. First act of execution is foreclosure, and it can be required only after 10 days from the notification of the decree, conjointly with a writ of enforcement.
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Efficacy of a payment injunction in case of bankruptcy. Omitted opposition
When bankruptcy procedure supervenes either during the 40-day timeframe, given to oppose the decree, or after the term expiration, or in any case when the debtor has not filed an appeal against the injunction, the Italian Supreme Court consistently ruled that “payment injunction becomes res judicata, valid to become enforceable without possibility to appeal”. As such, it can underpin creditor’s applications to bankruptcy procedure. The judge shall verify the regularity of notification. In case of omitted opposition, if notification is valid, the judge deems the payment decree as enforceable.
Efficacy of payment injunction in case of bankruptcy procedure. Time to appeal.
In case of debtor’s bankruptcy, payment inunction becomes enforceable when appeal procedure had been declared extinct, and the term to file a complaint against the extinction sentence has expired, pursuant to articles 647, 653 and 308 c.p.c.
Inefficacy of payment decree in bankruptcy
When bankruptcy started and the creditor has not obtained a payment decree yet, ex article 647 c.p.c., the payment decree is “tamquam non esset”, i.e. it has no efficacy and the creditor cannot apply to the bankruptcy procedure on the solely basis of the payment decree. Proof of credit shall be given with means other than the ineffective title. Neither the creditor can claim for reimbursement of legal expenses.
Payment decree, appeal and bankruptcy procedure
When bankruptcy procedure starts after debtor’s appeal, the latter is deemed as inadmissible, in any state or phase it is, due to the “bankruptcy exclusivity” rule. Therefore, in order to collect his debt, the creditor shall file an application to the bankruptcy procedure as a creditor of the bankrupted. In fact, although a payment decree has been provided with provisional enforceability, it is the result of a proceeding which is still pending. The latter shall be – therefore – deemed as inadmissible, as well as any other ordinary proceedings which is pending, due to the aforesaid principle, or rule of the “bankruptcy exclusivity”.
Collect debts. Advice by Law firm Rome