Case study
At the dawn of a time that even the oldest developers can hardly remember, courts, notaries, bailiffs – in short, the key public authorities in the enforcement of claims – had to deal with a lot of paperwork. All the pleadings, all the forms that we produce and process electronically today, once had to be written and filed on paper.
This was the case with one of our first customers: it took an incredible amount of energy to start an order for a payment order procedure – at that time through the courts. The forms required a lot of information to be entered accurately in the right fields, so it took up to 10-20 minutes to fill in the form completely. Imagine having to fill in 1000 of these.
It probably goes without saying that one of Indecs’ first tasks was to be able to produce correctly filled out payment order forms based on the data stored in the database.
And the rest is history…
Indecs and legal procedures
If a debt cannot be recovered with “fine words”, the creditor has little choice but to take legal action. Of course, Hungarian (and European) law protects the interests of both creditors and debtors: debtors can oppose legal proceedings, but if they become final, the creditor can obtain the money due to him through enforcement proceedings.
For debts involving private individuals or simpler corporate claims, the first step is usually to initiate a so-called payment order (FMH) procedure through a notary. The notary sends the form to the debtor, and if no objection is raised, the FMH becomes final. In case of an objection, a civil lawsuit is automatically initiated based on the creditor’s claims, during which both parties attempt to prove their case. If the debtor does not dispute the debt outlined in the FMH or the creditor wins the lawsuit, the debt becomes enforceable, and independent judicial officers attempt to collect it. In most cases, this is achieved through garnishment from income, with strict legal limits on the amount that can be deducted. Over time, however, creditors are able to recover their claims.
Indecs supports a wide range of legal procedures in the recovery of debts. For this reason, it is not correct to call it a “legal module”, as the support of legal procedures and legal processes permeates the whole system.
Finances in legal proceedings
Anyone who has dealt with the finances of debt collection will be familiar with the problem of keeping a record of the calculation of the debt filed in the proceedings, the costs incurred in the proceedings and the income received during the proceedings.
A particular difficulty is that there can often be more than one debtor in a case at the same time, and each of them must be able to be dealt separately. For this reason, Indecs is able to record fully functional “parallel calculations”, which may differ from the debt recorded in the general ledger, but are capable of accurately settling debts with debtors and even stand up in court. The management of parallel calculations is one of Indecs’ main strengths.
Production of forms
The legal process, as mentioned earlier, usually starts with the creation and correct completion of an FMH form. Later, an enforcement form (VH-form) is also created, which is very similar to the FMH. Today, both forms are electronic files in XML format, which must be submitted through the appropriate channels via the Hungarian National Chamber of Notaries (Magyar Országos Közjegyzői Kamara – MOKK) interface.
No matter how standardised the data content of the FMH and the VH may seem, practice has shown that it is far from being so. Our clients have requested different content, for example different interest calculation methods, all of which are legally valid, but differ greatly from each other. Therefore, the content of the FMH and VH forms can be fully customised in each Indecs system, as requested by our clients.
Electronic signature
The legal procedures can only be initiated once we have electronically signed the data files containing the forms.
For this, we use Indecs’ MicroSigner integration, which makes this process very simple and smooth.
A similar task arises when we correspond with executors: here too we must sign our letters electronically, otherwise the system cannot deliver them. Indecs helps with this too, of course.
Communication
As mentioned above, electronic communication is now a common practice in legal proceedings, but postal mail is also used.
Indecs handles all of these in a fully integrated way, being able to show all of them in a single communication history:
- demand letters
- debtors’ replies, even e-mails
- payment orders
- communication with notaries
- correspondence in the course of litigation
- enforcement forms
- letters with bailiffs
You don’t have to search for them in separate records, because they all appear in the case details page on the “Interactions” tab.
Automated processes
Legal procedures are strictly regulated by law. However, it cannot be denied that they can also get stuck, and this poses a particular danger: the risk of statute of limitations. If a certain period of time has elapsed and the creditor has not acted, the claim is time-barred.
But it’s not just the statute of limitations that can be a problem: the process can get stuck with any external party, even if it’s due to a banal administrative error. In such cases, our cash flow could be at risk if the bailiff fails to act.
When you have hundreds or even thousands of legal proceedings, it is a huge challenge to keep track of them. Fortunately, Indecs helps with that too. At the request of our clients, we have developed a number of customised automated processes that are tailored to the client’s best interests, which we can map out using BPMN diagrams and the Indecs Workflow module takes care of the management.
Without aiming for completeness:
- Automatic submission of payment orders
- Heir tracing
- Start enforcement
- Freeze monitoring and alerting
- Statute of limitations monitoring…
Our developers are happy to work on any new ideas to ensure that the Workflow module takes as much of the burden off managers and administrators as possible.