Recently, the Law Firm NEWLAW achieved a remarkable victory in the field of banking law. The legal representatives of the Law Firm NEWLAW successfully obtained a temporary injunction from the Single-Member Court of First Instance of Thessaloniki, suspending the enforcement of a payment order and an order to execute for a particularly large sum of 150,000 euros.

It is common for credit institutions to transfer overdue loan receivables to Loan and Credit Acquisition Companies (Funds), whose claims are managed by Loan and Credit Management Companies. Following the transfer of overdue loan receivables (mortgage, investment, consumer, etc.), the Loan and Credit Management Companies are those authorized (after concluding claim management agreements with the Funds) to take legal action against the debtors – borrowers in order to collect the transferred claims. To proceed with the collection of these specific claims, the issuance and service of a payment order with an order to execute is a prerequisite as the initiating phase of the expedited forced execution.

At this point, it must be emphasized that despite the publication of Supreme Court Plenary Session Decision No. 1/2023, the grounds that can be raised in the objection brief regarding the legitimacy of the Management Companies continue to exist and are adapted ad hoc to the nature of each case. This was the case in this specific instance, where NEWLAW's lawyers managed to secure the suspension of the enforceability of the payment order and order to execute based on the fundamental argument of the lack of legitimacy of the Loan and Credit Management Companies to judicially collect a claim of 150,000 euros, which is the subject of the served payment order.

Furthermore, it should be noted that each case is unique with its own characteristics and particularities, while recently, the phenomenon has been observed of a payment order being issued and served on a borrower during the pending stage of their appeal against a first-instance decision for their inclusion in the protective scope of Law 3869/2010. A legal solution, after prior consideration between an out-of-court settlement of the dispute or the filing of an objection, is to file an objection against the payment order and the order to execute with an admissible joinder of a parallel request, depending on the case, for the suspension of the enforceability of the payment order and the order to execute, provided that a legal review of the urgent case or the imminent risk has preceded. Finally, it is very important to act quickly before the execution process continues and attachments on assets and future auctions thereof follow. An early success at the enforcement level can serve as the legitimizing cornerstone for achieving a beneficial out-of-court mechanism between the debtor – borrower and the Fund through the Loan and Credit Management Companies.

For more information, if you have been served with a payment order with an order to execute by Loan and Credit Management Companies, please contact us, especially given the tight deadlines stipulated in the Hellenic Code of Civil Procedure (ΚΠολΔ), as after the expiry of the legal deadlines, the payment order acquires the force of res judicata, and the possibilities of challenging its validity are narrow to non-existent. To schedule an appointment to resolve your case, you can call NEWLAW on all working days from 8:00 a.m. to 5:00 p.m. at the telephone numbers 2310 551 501 and 2310 261 501.