Types of Payment Orders: Do You Know the Difference?

Quick Overview:

What are the different types of payment orders?

Under Czech law, you will primarily encounter the standard payment order, the electronic payment order, the European payment order, and the bill-of-exchange or check payment order. Standard and electronic payment orders are used to enforce ordinary monetary claims. The European payment order is used to enforce cross-border claims within the EU, while bill-of-exchange and check payment orders relate to claims arising from bills of exchange and checks.

• Standard payment order: ordinary monetary claim.
• Electronic payment order: The application is filed using a prescribed electronic form.
• European payment order: cross-border monetary claims within the EU.
• Bill of exchange payment order: a claim evidenced by a bill of exchange.
• Check payment order: a claim arising from a check.

A payment order is issued by a court based on a filed application when the debtor fails to repay the debt properly and on time. Depending on the nature of the claim, applicable laws, and the place where the claim arose, there are several types of payment orders, including the European payment order, the bill of exchange payment order, and the check payment order. Each of these types has its own specific characteristics, procedural steps, and legal frameworks.

If someone has failed to pay an invoice, loan, or other outstanding debt and you are unsure which type of payment order to choose, our attorneys will assess the claim, prepare the necessary filings, and can also represent you in subsequent court proceedings.

What is a payment order?

Simply put, it is a legal tool used by the court to collect debts through a simplified judicial proceeding. When a payment order is used, the entire process is often more advantageous for both the creditor and the courts. This is because the time required to reach a decision is significantly shorter, and the overall costs of the legal proceedings are reduced. Creditors can use them in cases involving promissory notes, checks, and ordinary monetary claims.

A typical example is a situation where a creditor files a lawsuit demanding payment of an outstanding monetary amount and sufficiently describes and substantiates their claim. The court may, without scheduling a hearing, issue a payment order requiring the debtor to pay the debt and the costs of the proceedings within 15 days of service, or to file an objection within the same period.

If the debtor files an objection in a timely manner, the payment order is revoked, and the court proceeds to hear the case in the standard manner. If the debtor does not contest the claim, the payment order has the effect of a final judgment and may serve as the basis for subsequent debt collection.

Which laws govern payment orders?

Traditional, electronic, bill-of-exchange, and check payment orders are primarily governed by the Civil Procedure Code. Bills of exchange and checks are further governed by the Bills of Exchange and Checks Act. The European payment order is based on the Regulation of the European Parliament and of the Council establishing the European payment order procedure.

From legal practice: Clients often view a payment order as a “faster form of enforcement.” In reality, it is still a court decision—only if the debtor fails to file a defense in a timely manner and the decision becomes final and enforceable can compulsory enforcement follow.

Types of Payment Orders

Standard Payment Order

A standard payment order is used to enforce a monetary claim. If the claim is based on facts stated by the plaintiff, the court may issue it even without an explicit request from the plaintiff and without hearing the defendant.

The debtor has 15 days from the date of service of the payment order to pay the amount claimed or to file an objection. If the defendant files an objection in a timely manner, the payment order is revoked and the court proceeds with standard litigation. If no objection is filed, the payment order has the effect of a final judgment.

Electronic Payment Order

An electronic payment order is similar to a traditional payment order; however, the application for its issuance is filed electronically using a prescribed form published by the Ministry of Justice.

In addition to standard information, the application must include, for example, the date of birth of a natural person or the identification number of a business or legal entity. If the legal requirements are met, the court may issue an electronic payment order without a hearing.

The debtor may also file an objection to an electronic payment order within 15 days of its service. A timely objection will set aside the order, and the dispute will proceed through regular court proceedings.

Practical Tip: The electronic form may seem simple, but an error in identifying the parties, an unclearly described claim, or an insufficiently substantiated debt can complicate the entire process. Therefore, before filing, we recommend reviewing not only the form itself but also the evidence supporting the claim.

Not sure whether an electronic payment order, a traditional lawsuit, or another procedure is appropriate for your claim? An attorney can first assess the enforceability of the debt and then prepare the appropriate petition for the court.

European Payment Order

The European Payment Order is a special tool designed to enforce cross-border monetary claims within the European Union. This type of order was established under Regulation (EC) No. 1896/2006 of the European Parliament and of the Council. This regulation establishes a uniform procedure for issuing European payment orders.

The main advantage of the European Payment Order is the ability to recover uncontested cross-border monetary claims through a uniform procedure throughout the European Union. The regulation applies among EU member states, with the exception of Denmark. This can significantly simplify the process for a creditor to collect a debt from a debtor in another Member State.

How to file an application for this order: Simply contact a legal aid office and arrange with an available attorney who will handle everything for you. Alternatively, you can file the application using a standardized form available online on the European Commission’s website.

Once the court reviews the application and determines that it meets all the requirements, it will issue a payment order. This is then sent to the debtor, who has 30 days to file an objection. If the debtor does not file an objection, the order becomes enforceable and the creditor can begin to collect the debt.

When can a European payment order be used? The case must involve a cross-border civil or commercial matter and a monetary claim for a specific amount that is already due. A case is considered cross-border if at least one of the parties has their domicile or habitual residence in a Member State other than the one where the competent court is located.

Does a business partner or customer from another EU country owe you money? With cross-border claims, it is important to correctly identify the competent court and the appropriate method of enforcement. We can help you assess whether a European payment order is the right course of action.

Bill of Exchange Payment Order

This special type of payment order is designed to enforce claims based on promissory notes. A promissory note is a negotiable instrument that documents and guarantees in writing that the debtor will pay the creditor the specified amount by a set date. Bills of exchange are mostly used in commercial transactions as a guarantee of payment. A bill of exchange payment order makes it easier to collect on them. In the Czech Republic, the law governing bills of exchange is set forth in the Bills of Exchange and Checks Act. This law establishes the rules for issuing bills of exchange, their required elements, and the procedures for enforcing them, including the bill of exchange payment order.

A creditor who holds a valid bill of exchange may file a motion for the issuance of a bill of exchange payment order. Based on the submitted bill of exchange, the court willgenerally issue the payment orderimmediately. No further evidence is usually required, as the bill of exchange itself constitutes sufficient proof of the debt’s existence. This process is very fast and efficient. This is one of the reasons why it is very popular among commercial companies and financial institutions when someone owes them money via a bill of exchange.

The options for defending against a bill of exchange payment order are relatively limited. The debtor may file objections only in specific cases, such as when the bill of exchange does not contain all the elements required by law, or if the debtor has already paid the debt. In other cases, once the debtor receives a bill of exchange payment order, they have no choice but to pay the specified amount.

Check Payment Order

A check payment order is similar to a bill of exchange, but it can be used to collect debts arising from checks. A check is a negotiable instrument that serves as an order to a bank to pay a certain amount of money to a third party. If a check is not honored—for example, due to insufficient funds in the account— the creditor may go to court and request a check payment order. In the Czech Republic, this type of order is again governed by the Bill of Exchange and Check Act, which specifies the requirements for checks and the procedures for enforcing them.

A creditor who holds an unpaid check may file a motion for a check payment order. The court again follows a simplified procedure, in which the check itself serves as evidence and no further proof is required. This procedure is very quick and efficient, similar to that for a bill of exchange payment order.

There are also limited defenses against a check payment order. The check proves that the debtor was indeed obligated to pay the specified amount. The debtor may only defend against it if the check does not meet legal requirements or if the creditor issued it fraudulently. If the check and its validity cannot be challenged, the check-based payment order becomes enforceable again, and the debtor is obligated to pay the amount specified on the check or in the order.

What are the differences between the types of payment orders?

Each type of payment order has its own specific use, legal framework, and procedural requirements. The European payment order is primarily intended for cross-border claims within the European Union, while bill of exchange and check payment orders are used in commercial transactions based on bills of exchange and checks.

Summary

There are several types of payment orders, which differ depending on the nature and circumstances of the debt being collected. Standard and electronic payment orders are primarily used to collect ordinary monetary debts, and the debtor may file an objection within 15 days. The European payment order is intended for cross-border monetary claims within the EU, with the exception of Denmark, and the deadline for filing an objection is 30 days. Bill of exchange and check payment orders are used to enforce claims arising from a bill of exchange or a check; the defendant has 15 days to file a reasoned objection. If you are unsure which procedure is appropriate for your specific debt, the key factors are the nature of the claim and the location where it is to be enforced.