SERBIA Law and Practice Contributed by: Aleksandar Ristić and Stefan Šilobad, Law Office Miroslav Stojanović
The LES also provides that enforcement on wages, salaries, pension payments and similar income be limited to a specific portion of such income, depend - ing on its actual amount (eg, one half, one third, one fourth or even one tenth), whereby higher protection applies to income at or below minimum wage or aver - age pension. The LES further provides an additional possibility for the creditor to request court-imposed penalties ( sud- ski penali ) against the debtor that fails to voluntarily fulfil its non-monetary obligation, in certain cases. Moreover, for the purpose of securing the creditor’s monetary claim towards the debtor, the LES also pro - vides that the parties may jointly request that the court establish: • a mortgage on the debtor’s immovable property; or • a pledge on the debtor’s movable property. Insolvency of the Debtor Unlike individual enforcement proceedings (which are generally aimed at satisfying the claim of a single creditor), insolvency proceedings may be viewed as a collective enforcement mechanism, aimed at the pro - portional satisfaction of creditors, depending on the legal nature and priority of their claims. Insolvency proceedings are regulated by the Ser - bian Insolvency Law ( Zakon o stečaju ), and may be instigated against a legal entity if one or more legally defined grounds for insolvency are determined: • long-standing illiquidity – where the debtor is unable to settle monetary obligations for 45 days or has suspended payments for 30 consecutive days (also presumed if a creditor was unsuccessful in enforcement); • imminent illiquidity – where it is evident that the debtor will not be able to meet its future obliga - tions; • over-indebtedness – where the debtor’s liabilities exceed its assets; or • breach or unlawful adoption of a restructuring plan ( plan reorganizacije ).
Insolvency proceedings may be conducted as either: • bankruptcy proceedings ( bankrotstvo ), which result in the ultimate dissolution of the debtor’s estate; or • restructuring proceedings ( reorganizacija ), which enable the continuation of the debtor in line with a court-approved restructuring plan. Nonetheless, the overall goal of both types of insol - vency proceedings is to ensure an equitable and efficient distribution of the debtor’s assets among all identified (unsecured) creditors, while minimising costs and delays. Moreover, instigation of insolvency proceedings imposes a stay on individual enforcement and cen - tralises creditor satisfaction under a single court’s supervision, through collective management of the debtor’s estate by the court-appointed insolvency administrator. This collective framework prevents disorderly enforcement and ensures that all creditors participate based on transparent and legally defined priority rules. Forced Collection Against Bank Accounts In addition to the foregoing, Articles 47–49 of the Ser - bian Law on Payment Transactions ( Zakon o platnom prometu ) also provide an alternative possibility for creditors that are in possession of a promissory note, other securities or default authorisations to “bypass” the standard judicial enforcement regime provided under the LES, by initiating forced collection ( prinudna naplata ) directly against the debtor’s bank accounts. However, a prerequisite for such forced collection is that the promissory note or default authorisation in question was previously registered in the public Reg - ister of Promissory Notes and Authorisations ( Registar menica i ovlašćenja ), maintained by the NBS. If said prerequisite is fulfilled, the creditor may issue a pay - ment order to a bank – this order is then transmitted to the NBS for the purpose of carrying out the forced collection. 2.3 Costs and Time Taken to Enforce Domestic Judgments Enforcement proceedings under Serbian law are con - sidered urgent by nature. This is reflected in the fact
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