For almost a year, an amendment to the Civil Code ought to make it possible, when recovering owed but unpaid alimony, to claim also default interest. However, the real-life experience is sadly quite different – for the time being, actually enforcing the claim for default interest is far too complex and costly to be advisable (given the typical amounts of interest at stake).
Effective as of 28 February 2017, Sec. 921 (2) of the Civil Code allows petitioners (dependent persons) to demand that their debtor (i.e., the person who is obliged to make maintenance payments to them) pay default interest on outstanding maintenance payments. Previously, courts did not award default interest in alimony matters, and the Supreme Court in fact expressly rejected the possibility of awarding default interest after the new Civil Code came into force. However, an amendment to the Civil Code has now enshrined this right to default interest in the law. On the surface, this appears to be a logical change – alimony debt is no different from other debts, and there is no reason why the ‚creditor‘ / beneficiary should not be entitled to default interest.
However, one can only collect receivables in enforcement procedures if one has what is known as an enforceable title (or execution title) – i.e., in this case, a final judgment. In other words, in order to be able to recover default interest, such interest must have been awarded in the judgment. Two scenarios are possible:
1) The judgment imposing the obligation to make maintenance payments has not yet been handed down.
While one may in theory ask the court (since the amendment has come into force) to award the right to default interest in the event of non-payment directly in the judgment, this means in effect asking the court to create an enforceable title to a claim which has not yet come into existence, and which will in fact only come into existence if the debtor fails to discharge their primary obligation to make maintenance payments. For this reason, it is far from certain how the courts would respond to such a request.
2) The obligation to make maintenance payments is based on an existing judgment.
If one already avails of a final judgment, but the judgment is silent on the obligation to pay default interest, then this judgment cannot serve as a title for compulsory enforcement, no matter the explicit language in the Civil Code. The only way how to collect interest in such a case would be to seek an award of interest on the outstanding maintenance payments since March 2017, by way of a new lawsuit. This entails a number of considerable complications. First of all, one incurs additional costs of litigation, which may substantially exceed the amount sought. In addition, the claimant will often be a minor (namely, the child who is entitled to maintenance). However, filing a lawsuit is not a standard act for the legal guardian of a child to take on behalf of the latter, and as such requires prior court approval. This means that one will have to initiate at least three proceedings in order to recover default interest – first, one must seek the court’s approval with filing suit on behalf of a minor; then, one must file the claim in which one seeks the award of a claim for payment of default interest; finally, one must initiate debt enforcement proceedings in order to actually recover the amount.
Our experience has shown that bailiffs and courts, who will naturally refuse to recover interest which has not been awarded in a judgment, are incapable of offering a reasonable way out of this conundrum. We are therefore anxiously awaiting the first ruling from the bench to see how the judiciary interprets this legal paradox.
Source: Act No. 89/2012 Coll., Civil Code; ruling Cpjn 204/2012 by the Supreme Court