On 1 July 2021, comprehensive amendments to the Austrian Execution Code (EO) will enter into force. They are the (tentative) conclusion to the reforms of execution law which started with the 1991 Amendment to the Austrian Execution Code (Exekutionsordnungsnovelle 1991).
The current amendment is designed to boost the efficiency of execution proceedings to collect debts. The new (extended) “execution package” aims to further reduce the principle of speciality, according to which the creditor needs to choose the remedy and object of execution in the application, and to reduce the number of applications for execution.
(Extended) execution package
As a new feature, an application for execution that does not explicitly name specific means of seizure will automatically include seizure of chattels, seizure of wages/salaries, and the creation of a list of assets. In doing so, the reform reflects current practice while avoiding problems of boundaries between the types of execution.
Another problem in connection with the seizure of claims and other assets was that the petitioning creditor had to specify the objects of execution already in the application, even though in most cases such assets (in particular claims against unknown third-party debtors, such as bank deposits) came to light only through the debtor's list of assets. By the time the seizure was to take place (which required another application), these claims/assets typically had vanished, or it was difficult for the creditor to assess whether the debtor's claims against the third party were actually enforceable.
In order to avoid such a situation, a creditor no longer needs to list assets in the application. Instead, as a part of the extended “execution package”, the court will appoint an administrator who will be in charge of identifying the assets, selecting suitable objects and handling the procedure including their utilisation. This means that the new execution proceedings will copy the established model of utilisation by an administrator used in insolvency proceedings. However, execution on real estate - as before - must be applied for separately.
Same as the seizure of chattels, execution of claims will be continued until the creditor is satisfied, even if the third-party debtor should change.
Concentration of jurisdiction
All procedures to collect monetary debts from personal property will be combined at the debtor's general place of jurisdiction (domicile). This makes it easier to determine whether the debtor is insolvent, a major aspect since creditors may, in insolvency proceedings instituted at a later date, have to return payments received after the debtor has become insolvent. If the debtor is clearly insolvent, the execution proceedings must be aborted. Creditors may file a petition for insolvency; debtors must do so.
Extended right to inspect execution data
Whereas it was previously only permissible to request data concerning execution proceedings in order to assess whether it was appropriate to conduct civil or execution proceedings, it will also be possible to request such data in order to assess whether insolvency proceedings should be initiated. Debtors can make a free query via a representative (lawyer, notary or debt counselling centre) and prepare their debt relief.
Editorial changes
The current full-scale reform has also been taken as an opportunity to ensure a clearer and more systematic structure of the regulations as well as a more contemporary and less abstruse language. This is intended to make the legal text, parts of which are still in their original version drafted in 1896, easier to read and apply.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
