Article 777 of the Polish Civil Procedure Code: What is it and what does it mean?

HeavyFinance started issuing loans in Poland with a new requirement for debtors to provide a statement on voluntary submission to enforcement. This obligation simplifies and accelerates the debt recovery process by enabling creditors to bypass lengthy and costly court procedures.

  1. Faster Recovery: The new requirement allows for direct initiation of enforcement proceedings without lengthy court delays, ensuring quicker repayment in the event of default.

  2. Increased Security: With the “three sevens” in place, your investments are now backed by a legally enforceable statement, enhancing the overall security of your financial commitments.

  3. Enhanced Confidence: This proactive measure is designed to boost your confidence in the HeavyFinance platform, making it a more attractive and reliable environment for your investments.

Understanding the "Three Sevens"

The debtor’s statement on voluntary submission to enforcement (commonly referred to as the “three sevens” because of Article 777 of the Polish Civil Procedure Code where this procedure is described) enables recovery under enforcement proceedings without the need of going through the judicial process and obtaining a court judgement. The statement on voluntary submission to enforcement, which must have the form of a notarial act to be valid, replaces a court judgement and, following a simple procedure, becomes an enforcement order required for the debt enforcement officer to hold enforcement proceedings.

By requiring this statement, HeavyFinance aims to bolster its risk management practices, ensuring more robust protections for investors. With the “three sevens” in place, the process for reclaiming funds in the event of default is considerably expedited, offering a more reliable framework for investment recovery.

“Investors can benefit from a more efficient recovery process. When a farmer defaults on a loan, investors can rely on the enforcement clause obtained under Article 777 to initiate the enforcement process directly through a bailiff. This direct route reduces the time and effort typically required to secure a court judgement” says Aldona Micė, Head of Risk and Recovery at HeavyFinance.

Implications for Debtors

For debtors, this new requirement necessitates an additional step in the borrowing process. They will now need to visit a notary to execute the statement on voluntary submission to enforcement. This statement will explicitly acknowledge the debt and the conditions under which enforcement can be initiated should they default on their repayment obligations.

From the 20th of June, Article 777 is applied to new loans, including Green Loans. This requirement is also being applied to the majority of farmers who missed a loan repayment instalment for more than 90 days and fell into arrears.

HeavyFinance’s decision to incorporate the “three sevens” requirement reflects its ongoing commitment to robust risk management practices. By aligning with established legal procedures, the company is taking proactive steps to safeguard investor interests while maintaining fair and transparent practices for borrowers.

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