Can the court allow a payment order to be paid in instalments?
Pursuant to Article 320 of the Code of Civil Procedure, ‘In particularly justified cases, the court may, in its judgment, divide the awarded payment into instalments, and in cases concerning the surrender of property or the vacating of premises – set an appropriate deadline for the performance of that obligation.’ Case law in this regard clearly indicates that a request to divide a payment order into instalments is appropriate where the debtor is willing and able to settle the debt. Furthermore, a court’s finding that the defendant (debtor) is in a difficult financial, family or health situation will not always mean that it is necessary or possible to pay the awarded sum in instalments. The application of Article 320 of the Code of Civil Procedure is possible ‘in particularly justified cases’. This does not refer to exceptional cases, i.e. those that are particularly rare, unusual or extraordinary (cf. e.g. Article 4241 § 2 of the Code of Civil Procedure), but rather to particularly justified cases, i.e. those which, to a very to an above-average or extraordinary degree justify, or even necessitate, a modification of the effects of the enforceability of the claim sought. The assessment of such cases lies with the court; however, it is not a discretionary assessment; it must be preceded by the necessary findings and supported by a convincing argument. The circumstances allowing a specific case to be classified as particularly justified may arise mainly from the parties’ financial circumstances, their family or health situation, and from ad hoc difficulties – established by the court – in fulfilling the obligation within the time limit specified in the claim. This applies in particular to cases where the performance of the awarded obligation would be impossible or very difficult for the defendant to fulfil, or would expose them or their relatives to irreparable harm (Court of Appeal in Łódź, judgment of 6 March 2020 in case no. I ACa 840/19, LEX No. 3115627). In applying Article 320 of the Code of Civil Procedure, the court will take into account not only the defendant’s financial situation but also their attitude regarding their willingness to repay the debt. It will also have to take into account the creditor’s interests. The creditor must be certain that, despite the deferral of payment of the claim due to them, it will be satisfied.
How many instalments can the court divide the debt into?
Therefore, when applying for the payment order to be paid in instalments, the defendant should demonstrate the circumstances justifying the request for the judgment to be paid in instalments. The final decision regarding the number of instalments, their amounts and payment dates is made by the court. It may also happen that the payment under the judgment is divided into instalments ex officio.
The court’s decision to pay the debt in instalments allows the defendant to repay the debt in regular instalments without fear of enforcement proceedings being brought against them (assuming, of course, that the debt is repaid on time following the court’s decision).
In the event of non-payment of any instalment, the creditor may apply for a declaration of enforceability of the judgment – in respect of the instalments already due – and then submit a request to the bailiff to initiate enforcement proceedings. Undoubtedly, however, this is a good solution for debtors – in the case of undisputed claims that we wish to settle, but are prevented from doing so by a difficult financial situation.
If you are interested in how many instalments the court can spread the debt over, applying for the payment order to be paid in instalments, repaying the debt following a court judgment, and the Civil Procedure Code’s provisions on payment in instalments, and you have any doubts regarding this matter, please make use of the services of the law firm HWW Hewelt Wojnowski Lindner i Wspólnicy.
Frequently asked questions
Can the court divide the awarded performance into installments if I cannot afford a lump-sum payment?
The court may divide the performance into installments in particularly justified cases, for example in case of the debtor’s difficult financial, family or health situation. What matters is whether a lump-sum payment would be impossible or would expose the debtor to irreparable damage. The motion makes sense when the debtor shows willingness and real ability to make timely payments.
What circumstances must be met for a motion for installments to be granted?
It must be demonstrated that the debtor’s case is truly exceptional and justifies changing the payment deadline. The court looks at the financial status, family and health situation, and whether the debtor wants to pay. It is also important for the court to gain certainty that the creditor will recover the debt despite the delay in time.
Into how many installments can the court divide the debt and who decides on their amount?
The court decides on the number of installments, their amount and deadlines based on the presented circumstances. It may divide the performance into installments also ex officio, although it usually does so upon the defendant’s motion. The most important thing is to demonstrate that the proposed schedule can be realistically executed.
What will happen if I stop paying the designated installments after obtaining the division into installments?
In case of non-payment of any of the installments, the creditor may apply for granting an enforcement clause to the judgment regarding the due installments. Then they may submit a motion to the bailiff to initiate enforcement proceedings. This solution is beneficial only when the debtor is able to settle their obligations on time.
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HWW Hewelt Wojnowski Lindner i Wspólnicy is a Warsaw law firm advising businesses and public entities. We combine experience in commercial law, energy, tax, data protection and litigation to deliver solutions tailored to our clients’ business realities.
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