Art. 777 of the Polish Code of Civil Procedure – What Is a Voluntary Submission to Enforcement and How Does It Work?

In today's dynamic world of finance, a sense of security and certainty is crucial for both individuals seeking financial support and institutions providing loans. Concerns often arise regarding complex legal processes, lengthy court disputes, and unforeseen costs that can accompany financial transactions. It is precisely in response to these challenges that the Polish legal system offers an effective tool – Article 777 of the Code of Civil Procedure (KPC).

This provision enables quick and effective claim enforcement, minimizing risk and providing peace of mind to both parties. This article is a comprehensive guide that will explain what voluntary submission to enforcement is, what benefits it offers to both the borrower and the lender, how the entire process works, and what to pay attention to in order to feel completely secure.

What is Article 777 §1 point 5 of the Code of Civil Procedure?

Article 777 §1 point 5 of the Code of Civil Procedure is a provision that allows a debtor to submit a statement in the form of a notarial deed, in which they voluntarily submit to enforcement. What does this mean in practice? If the debtor fails to fulfill their obligation, the creditor (e.g. PaveNow) can directly refer the matter to a bailiff, without the need for lengthy and costly court proceedings.

Notarial deed as an enforcement titleThe key role of a notarial deed prepared under Article 777 KPC is that it becomes an "enforcement title." After being granted an enforcement clause by the court, this document acquires legal force equivalent to a final court judgment. This means the creditor does not have to file a lawsuit, which significantly speeds up and simplifies the debt collection process.

What must the debtor's statement contain?For a statement of voluntary submission to enforcement to be effective, the notarial deed must contain precisely defined elements:

• Identification of the parties to the deed – clear indication of who is the debtor and who is the creditor.
• Indication of the monetary obligation – the amount of the obligation must be specified directly or by means of a valorization clause.
• Specification of the event – indication of a specific event upon which the fulfillment of the obligation depends (e.g., failure to repay the loan on time).
• Deadline for applying for the clause – specification of the deadline by which the creditor may apply for the enforcement clause for the notarial deed.Precision in drafting the notarial deed is absolutely crucial. Any inaccuracies in identifying the parties, the amount of the debt, the conditions, or the deadline may result in the court refusing to grant the enforcement clause. In such a situation, instead of quick enforcement, both parties may be forced into a lengthy court process. Therefore, the role of the notary, who is responsible for the professional preparation of the document, is invaluable – they ensure compliance with the law and precision, protecting the interests of both parties.

Benefits of applying Article 777 KPC for the borrower and lender

The application of Article 777 KPC is a solution that brings tangible benefits to both parties of a loan agreement, building mutual trust and process efficiency.

Benefits of Article 777 KPC for the borrower

Although voluntary submission to enforcement may sound serious, in reality, it is a mechanism that, in case of repayment problems, minimizes negative consequences and provides predictability.

• Time savings – in a situation where repayment difficulties arise, Article 777 KPC eliminates the need for a long and often stressful court process. This significantly speeds up the resolution of the situation.
• Lower costs – avoiding court proceedings means no additional fees associated with lawsuits, hearings, or lawyers' fees, which could significantly increase the total debt.
• Transparent terms – the borrower knows exactly what they are signing and under what circumstances the notarial deed may be used. This increases the sense of security and transparency of the entire transaction.
• Only if needed – the notarial deed is activated only in the event of actual non-fulfillment of obligations, and not as a preventive measure without basis.
• Market standard – this is a commonly used form of security by many financial institutions in Poland, which testifies to its established position and credibility.

Benefits of Article 777 KPC for the lender

For PaveNow, Article 777 KPC is a key risk management tool that directly translates into the ability to offer more attractive financing conditions.

• Risk protection – this provision constitutes an effective security for the repayment of borrowed funds, significantly minimizing the risk of non-repayment.
• Ability to offer better terms – thanks to reduced risk, PaveNow can offer more flexible and favorable loan terms, including to individuals with limited credit history. This expands access to financing and makes PaveNow's offer more competitive.
• Fast enforcement – the ability to refer the matter directly to a bailiff without waiting for a court judgment significantly shortens the time for recovering receivables.
• Reduced enforcement costs – the fast enforcement path helps reduce collection costs, which is beneficial for both parties.It is worth emphasizing that "benefits" for the borrower, such as time savings and lower costs, are in fact a minimization of negative consequences, rather than direct benefits from the security itself. This is a way to avoid a worse scenario (a lengthy and costly court process) if insolvency occurs. For PaveNow, on the other hand, it is a clear and proactive risk management tool that directly translates into business advantages. Transparently presenting this subtlety builds trust and strengthens PaveNow's image as a responsible partner.

Notarization process - step by step

The process of signing a statement of voluntary submission to enforcement based on Article 777 KPC is simple and proceeds in several clearly defined steps, ensuring its efficiency and accessibility for every PaveNow client.

Step 1 - Schedule an appointment

‍PaveNow actively supports its borrowers in organizing a meeting with a notary. We understand that formalities can be overwhelming, which is why we help arrange a convenient date. We cooperate with reputable notary offices in strategic locations, e.g., in Warsaw at al. Sikorskiego and Plac Bankowy 1, which ensures easy access to the service. Our goal is to simplify this stage as much as possible so that you can focus on your financial needs.

Step 2 - Bring your identification document

‍During the visit to the notary, in accordance with applicable regulations, it is required to have a valid identification document. This can be an ID card or passport. This is a standard verification procedure that ensures the security and legality of the entire transaction. Make sure your document is current and valid to avoid unnecessary delays.

Step 3 - Sign the statement

‍At the notary's office, the notary will carefully read the content of the document, ensuring that you fully understand all its provisions and consequences. You have every right to ask questions and request additional explanations. Only after ensuring that everything is clear to you will you sign. This creates a notarial deed with an enforcement clause, which becomes a legally binding document.What is important and what distinguishes PaveNow's offer is the fact that PaveNow covers the full cost of the notary visit. The borrower does not incur any fees related to this process. Covering notary costs by PaveNow is a key differentiator and a trust-building element. In the context of the disadvantages of voluntary submission to enforcement for the debtor, one of the frequently mentioned drawbacks is precisely the cost of the notarial deed. Clearly stating that PaveNow bears this cost directly neutralizes this potential disadvantage from the borrower's perspective, transforming it into a strong advantage and competitive edge for the company.

Bailiff enforcement based on Article 777 KPC - what you need to know?

Understanding the enforcement process is crucial for both parties to an agreement secured by Article 777 KPC. Although the goal is to avoid enforcement, awareness of its course builds trust and allows for responsible financial management.

Procedure for granting an enforcement clause to a notarial deed

For a notarial deed, in which the debtor has submitted to enforcement, to become the basis for initiating enforcement proceedings, the creditor must obtain an "enforcement clause." The court grants this clause upon the creditor's request, transforming the notarial deed from an enforcement title into an enforcement writ.

The court examines the application for granting an enforcement clause immediately, usually no later than 3 days from the date of its submission. The court fee for submitting the application for the clause is only PLN 50. This proceeding takes place at a closed session, which means that the presence of the parties – both the creditor and the debtor – is not required. In this proceeding, the court does not assess the validity of the legal act itself, but only checks whether the notarial deed meets the formal requirements specified in Article 777 §1 KPC.

Course of enforcement proceedings

After obtaining the enforcement writ, the creditor may submit an application for initiating enforcement proceedings to a court bailiff. The competent bailiff is usually the one who operates at the court in the district of the debtor's place of residence or registered office.

As part of the enforcement proceedings, the bailiff has the right to seize various components of the debtor's assets. These may include movable property (e.g., cars, equipment), real estate (e.g., apartments, houses), part of remuneration for work (with certain limitations), and funds accumulated in a bank account (also with limitations). Importantly, enforcement is not limited exclusively to monetary obligations; the bailiff may also enforce non-monetary obligations, such as supervising the handover of real estate or premises.

Risks and limitations for the borrower related to Article 777 KPC

Despite many advantages, voluntary submission to enforcement based on Article 777 KPC also involves certain risks and limitations for the borrower, of which they should be aware. PaveNow strives for full transparency, which is why it is important that you know all aspects of this solution.

One of the main threats is the risk of imprecise drafting of the notarial deed. As mentioned earlier, the court may refuse to grant an enforcement clause if the deed imprecisely defines the debtor's obligation, the deadline for its performance, or the monetary sum. Such a situation, although it seems to be a problem for the creditor, can in practice lead to lengthy court disputes and additional costs also for the debtor, who was counting on a quick resolution of the matter. This is particularly important because the court in enforcement clause proceedings does not examine the validity of the legal act, but only the formal requirements of the deed.

The fast enforcement path characteristic of Article 777 KPC means that the debtor has less time to potentially challenge the claim than in the case of a traditional court process. After obtaining the enforcement clause, the creditor can almost immediately refer the matter to a bailiff.

Another aspect is the cost of preparing the notarial deed. Although PaveNow declares to cover these costs, in other situations, the debtor bears the notary fee, which depends on the amount of the obligation and includes the notary's fee, VAT, and fees for copies.It should also be remembered that a statement of submission to enforcement cannot be easily withdrawn. A notarial deed is a document with great legal force. The possibility of challenging or invalidating it is limited and requires filing a lawsuit with the court to declare the legal act invalid. The basis for this are the so-called defects in the declaration of will, such as lack of awareness or freedom, fictitiousness, error, distortion, deceit, or threat. The deadline for challenging a notarial deed for these reasons is usually one year from the cessation of the fear (in case of threat) or the discovery of the error. After this period, the deed becomes fully valid and effective.

It is also worth noting that claims covered by Article 777 KPC may become time-barred, usually after 6 years, although this period may vary depending on the type of claim.

Frequently Asked Questions (FAQ) regarding Article 777 KPC

In this section, we answer the most frequently asked questions regarding Article 777 KPC and voluntary submission to enforcement. We hope you find answers to your concerns here, which will help you fully understand this important aspect of loan security.

Does a notarial deed under Article 777 KPC replace a court judgment?

Yes, a notarial deed containing a statement of voluntary submission to enforcement, after being granted an enforcement clause by the court, has the same legal force as a final court judgment. This means that the creditor can directly refer the matter to a bailiff, bypassing traditional court proceedings.

What can a bailiff seize and what is protected after signing a notarial deed under Article 777 KPC?

A bailiff can seize movable property, real estate, part of remuneration for work, funds in a bank account, and other property rights. However, the law protects certain items and amounts, such as food products, fuel, religious items, social and family benefits, as well as part of remuneration and funds in a bank account within the so-called "free amount from seizure."

Can a statement of submission to enforcement be withdrawn?

A statement of voluntary submission to enforcement, made in the form of a notarial deed, is binding and cannot be unilaterally withdrawn. It can only be challenged in court in the event of so-called defects in the declaration of will (e.g., error, deceit, threat), and the deadline for this is limited to one year from the discovery of the defect or the cessation of its cause.

What are the risks of Article 777 KPC for the borrower?

The main risks for the borrower are the need for precise drafting of the notarial deed (inaccuracies may lead to the court refusing to grant the enforcement clause), the fast enforcement path limiting the time to potentially challenge the claim, and the fact that the statement cannot be easily withdrawn.

Can a notarial deed under Article 777 KPC become time-barred?

Yes, claims secured by a notarial deed under Article 777 KPC may become time-barred. The limitation period is usually 6 years, although this period may vary depending on the type of claim.

Who covers the notary fees related to the statement?

In the case of PaveNow loans, the costs of the notary visit related to signing the statement of voluntary submission to enforcement are fully covered by PaveNow. The borrower does not incur any fees in this regard.

Summary

Article 777 of the Code of Civil Procedure constitutes a powerful and effective tool in the loan security process, offering significant benefits to both lenders and borrowers. For PaveNow, its application minimizes the risk of non-repayment and enables the offering of more attractive financing conditions, even to individuals with limited credit history. For the borrower, although it is a form of security, it ensures transparency of terms, time, and cost savings in the event of potential repayment problems, by avoiding lengthy court proceedings.