Amendment to the Code of Distraint Procedure15/04/08 / cata_legal-tax-update

Amendment to Act No. 120/2001 Coll., on court-appointed distrainers and distraining activities (the Code of Distraint Procedure), as amended, effective from 1 January 2008, was published under Act No. 347/2007 Coll. The major goal of the amendment is to make supervision over distrainers more efficient and, as a result thereof, improve their activities; However, at the same time, the amendment again worsens the position of creditors in connection with the payment of distraint costs.

These costs (i.e. the distrainer’s fees, overheads and other expenses) receive the status of first class receivables when the classification of the distraint estate takes place; this is why they shall be satisfied with priority, i.e. prior to the creditor’s receivable for which the distraint was opened. The change is anchored in the amended second paragraph of Section 68 of the Code of Distraint Procedure (which applies to distraints by sale of movables) or Section 70 (which applies to distraints by sale of a business). The provisions of Section 89 were amended as follows: if the distraint is suspended due to the obliged party’s lack of assets the entitled party shall reimburse the distrainer for both fixed and reasonably spent expenses. Since Act No. 347/2007 Coll. does not contain any transitory provisions, the new provisions shall apply to distraint proceedings commenced prior to the effective date of the amendment.