The first thing to do is to ask yourself is it really worthwhile suing somebody. A lot of people forget that it can be really stressful, it can be really expensive and actually, there are no guarantees that any money will be recovered. If a defendant has no money, no assets and no income – how are you going to get money from him?
It could be that the court will say „Yes, A owes you USD 100,000” but actually - if A has no money and no income - how on earth are you going to get back USD 100,000 from him?
So, the first thing to do is to ask is it worthwhile. You should take a hard look at the financial condition of the party you are going to sue. You want to be reasonably certain that you will be able to collect a judgment before you spend a lot of money on a lawsuit. Sometimes it is not easy to check the financial condition of a defendant. If your case is in Poland, to avoid shooting in the dark, you can file a motion for the injunction which will secure your claims by blocking the defendant’s bank accounts or registering a mortgage on the defendant’s property.
It’s always better to think ahead and set up a plan of action before you start legal proceedings. You should be aware that the debtor often does the same and tries to sets up an asset protection plan. It is certain that the debtor will be taking steps to protect his assets from creditors. There are a number of ways to do so, using domestic asset protection scheme or offshore asset protection scheme.
In Poland, there is a very useful measure against the debtor who is thinking of hiding his assets which is called the “freezing injunction”. It allows the creditor to apply for an injunction which will actually “freeze” the debtors assets by blocking money on the bank accounts or putting lien on real estate. The advantage of the “freezing injunction” procedure is that the debtor is not aware of the proceedings. Typically, the debtor learns about the injunction when the bailiff blocks his accounts. If money is blocked or assets seized, you can quietly consider suing the debtor, knowing that it is worthwhile.
How to obtain the “freezing injunction” in Poland?
You have to file a motion and convince the judge that:
- your claim is highly probable (you do not have to prove your claim; it is sufficient if you present the so called prima facie evidence) and
- the situation of your debtor is worsening so – even if you win the case – there will be a real danger of not getting the money awarded to you by the court.
Typically, point 2 is not easy to prove. If the defendant is a company – it is relatively easy to establish the financial status of the defendant by reviewing the financial statements which are typically available online and also at the registry court. If the company has made losses in previous years and if the company has a high level of short-term liabilities it will be relatively easy to convince the judge to secure your claims.
However, if the defendant is an individual, the situation is more difficult. In such a situation, you will have to mainly rely on what is generally available about that person on the internet, including the social media. Any information which shows financial difficulties of the debtor can be useful.