Croatia
Legal procedure in Croatia
Legal procedure for credit recovery is provided on two ways:
- procedure carried out by Public Notary if the claim for credit recovery is based on the reliable document (invoice or other similar document)
- court procedure in other cases
On the creditor's request Public Notary set out an order to debtor to pay the debt.
If the debtor submit the appeal on the Notary's decision, or public notary refuses the creditor's request procedure for credit recovery continues on court.
Public Notary procedure
Creditor demands from the public notary to set out an order to debtor to pay the debt.
If the public notary finds the request founded, he sets out an order to debtor to pay the debt.
If the public notary believes that the request is not founded he forwards the case to the court. In case the debtor objects the public notary's order, the case is forwarded to the court as well. The court than decide about the creditor's request.
If the public notry sets out the order and debtor does not object, the creditor must demand from public notary to confirm the validity of the payment order.
Than creditor can:
- demand from the debtor's bank to seize the money from debtor's account;
- demand from court to seize other assets or properties that belong to the debtor.
Court procedure
If the case is brought to the court directly, procedure is standard. Each of the parties must prove its’ demands and at the end court decides who is right.
During the court procedure creditor can demand that the court issues certain security measures that will prevent the debtor to manipulate with his assets.
Duration of legal procedure
The procedure at Public Notary lasts approximately three weeks.
The duration of the ordinary court procedure is difficult to predict. It depends upon the quality of creditors’ demands, debtors defence, volume of other cases that occupy the court, etc.
For the time being, court procedures last at least one year.
Limitation period
Limitation period for starting the legal procedure is three years from the due date of the debtor's obligation in commercial cases.
Pre-Bankruptcy Settlement
"Predstečajna nagodba" is a preventive tool that balances creditor interests with debtor survival, offering a structured path to recovery while avoiding the harsher consequences of bankruptcy.
In Croatia, debtors facing financial difficulties may initiate a pre-bankruptcy settlement as an alternative to bankruptcy. This procedure is regulated by the Bankruptcy Act and aims to protect both creditors and debtors by enabling financial restructuring.
Objectives
• Prevent bankruptcy by restoring solvency and liquidity.
• Ensure creditor protection through negotiated repayment terms.
• Preserve business continuity and safeguard jobs.
Procedure
• Initiation: Debtors whose accounts are blocked may file for pre-bankruptcy settlement within 60 days.
• Court involvement: The competent commercial court opens the procedure and appoints a settlement commissioner.
Effects:
• Suspension of enforcement actions.
• Unblocking of debtor’s accounts.
• Creditors submit claims, which are verified and negotiated.
Possible Outcomes:
• Debt restructuring: Rescheduling, partial write-off, or conversion of claims.
• Operational restructuring: Adjustments to business models or asset management.
• Simplified procedure: Available for smaller debtors.
• Failure of settlement: Leads to formal bankruptcy proceedings.