Unpaid Invoice: What to Do Step by Step

Almost every business owner faces it at some point — you issue an invoice, the due date passes, and nothing arrives in your account. Surveys show that over 70% of Czech OSVČ have dealt with unpaid invoices. This article gives you a complete guide on how to proceed from the first day after the due date all the way to potential enforcement. Step by step, with specific deadlines and practical advice.

Before You Start: Get Your Documentation in Order

Successful debt recovery stands or falls on solid documentation. Before taking any action, prepare the following:

• A copy of the invoice with the issue date and due date
• A contract or purchase order — written proof of the agreement
• A delivery note or handover protocol — proof that you fulfilled your obligation
• Email correspondence — everything that documents the business relationship
• Bank statement — confirmation that the payment has not arrived
• Any partial payments — if the debtor has paid part of the amount

Step 1: Informal Reminder (1–5 Days After the Due Date)

In the first few days after the due date, non-payment is often the result of an administrative oversight. Start on a friendly note.

What to Do

• Call or send an informal email
• Reference the invoice number and due date
• Ask whether they received the invoice and whether everything is in order
• Offer to resend the invoice (the email may have been lost)

Tone of Communication

Be approachable and professional. In 80% of cases, it's simply a matter of forgetting or an administrative error, and an informal reminder is all it takes.

Step 2: First Written Reminder (7–14 Days After the Due Date)

If the informal reminder didn't work, move on to a formal written reminder.

How to Send the Reminder

• By email — quick, but harder to prove delivery
• Via data mailbox — the best option; provides automatic proof of delivery
• By registered post — a reliable record of sending

Step 3: Second Reminder with Late Payment Interest Calculated (14–30 Days After the Due Date)

If the first reminder had no effect, increase the pressure with a second reminder that includes a calculation of accrued late payment interest.

Late Payment Interest in 2026

The statutory late payment interest is calculated as the Czech National Bank (ČNB) repo rate in effect on the first day of the calendar half-year in which the default occurred, plus 8 percentage points.

Contractual vs. Statutory Interest

Step 4: Pre-Action Notice (30–45 Days After the Due Date)

A pre-action notice is a critical step that is legally required before filing a lawsuit. Without it, you risk the court refusing to award you legal costs.

What a Pre-Action Notice Must Include

Sending the Pre-Action Notice

Send the pre-action notice exclusively by one of the following methods:

• Via data mailbox — the most reliable option; instant proof of delivery
• By registered post with acknowledgement of receipt — a classic and verifiable method
• Through a solicitor — adds weight and professionalism

Step 5: Out-of-Court Resolution (An Alternative to Litigation)

Before heading to court, consider out-of-court alternatives:

Payment Plan

If the debtor is willing to pay but cannot cover the full amount at once, agree on a payment plan. Always put it in writing and include:

• The total outstanding amount including interest
• The amount and schedule of individual instalments
• Consequences of default (immediate acceleration of the full debt)
• The debtor's acknowledgement of the debt (crucial for interrupting the limitation period)

Acknowledgement of Debt

If the debtor signs an acknowledgement of debt (§ 2053 of the Civil Code), you gain two advantages:

1. Interruption of the limitation period — a new 10-year period begins to run
2. Reversal of the burden of proof — the debtor must prove that the debt does not exist

Set-Off of Claims

If you owe something to your debtor, you can set off the mutual claims against each other. A unilateral notice is sufficient.

Assignment of the Claim

You can sell (assign) the claim to a specialist debt purchasing company. You will receive less than the face value (typically 50–80%), but you get the money immediately and no longer have to deal with recovery.

Step 6: Court Proceedings

If out-of-court efforts fail, it's time to go to court.

Electronic Payment Order (EPR)

For claims up to 1,000,000 Kč, the fastest route is an electronic payment order. You submit it via the e-filing portal on the justice.cz website.

How to File an Electronic Payment Order

Step 7: Enforcement

If the debtor does not voluntarily pay even after a final court judgment, you can apply for enforcement.

How Enforcement Works

1. Choose an enforcement officer — you can select any court enforcement officer (bailiff) in the Czech Republic
2. File the application — provide the enforcement officer with the final court judgment
3. Enforcement begins — the enforcement officer starts identifying the debtor's assets
4. Methods of enforcement — wage garnishment, bank account freezing, seizure of movable property, sale of real estate

Enforcement Costs

Enforcement costs are borne by the debtor. As the creditor, you pay nothing for enforcement — the enforcement officer recovers their costs from the debtor. The exception is where the debtor has no assets at all and enforcement is discontinued.

Limitation Periods: What to Watch Out For

Every claim is subject to a limitation period. If you fail to file a lawsuit in time, you lose the ability to pursue the debt through the courts.

| Type of claim | Limitation period | Note | |----------------|-----------------|----------| | General claim | 3 years | From the invoice due date | | After acknowledgement of debt | 10 years | From the acknowledgement | | Claim awarded by a court | 10 years | From the judgment becoming final | | Claim based on a bill of exchange | 3 years | From the bill's maturity date |

Prevention: How to Avoid Unpaid Invoices

The best debt is one you never have to chase. Here are some tried-and-tested preventive measures:

Before Entering into a Deal

• Check out your client — look them up in the debtors' register and the insolvency register (isir.justice.cz)
• Put it in writing — even a simple purchase order is better than nothing
• Agree on a deposit — for larger projects, require 30–50% upfront
• Set shorter payment terms — 14 days instead of 30

When Issuing an Invoice

• Include accurate payment details — account number, variable symbol
• Specify late payment interest — reference the contractual provision
• Send the invoice in a verifiable way — by email with read receipt or via data mailbox

After Issuing an Invoice

• Track due dates — set up automatic reminders
• React immediately — don't wait weeks after the due date
• Keep records — maintain an overview of all outstanding receivables

Writing Off a Bad Debt

If a debt cannot be recovered, you can write it off in your accounts. A tax-deductible write-off is possible under the following conditions:

• The claim was subject to court, arbitration or enforcement proceedings
• The debtor is in insolvency
• The claim has become statute-barred (after the limitation period has expired)
• The cost of recovery would exceed the value of the claim (for claims up to 30,000 Kč)

Frequently Asked Questions (FAQ)

Can I charge late payment interest even if it's not in the contract?

Yes. Statutory late payment interest arises automatically by law (§ 1970 of the Civil Code). It does not need to be specified in the contract. In the first half of 2026, the rate is 11.50% per annum.

How long should I wait before filing a lawsuit?

The recommended approach is: informal reminder (within 7 days), first written reminder (within 14 days), second reminder (within 30 days), pre-action notice (within 45 days), lawsuit (after 52+ days from the due date). However, there is no legal minimum waiting period — you can file a lawsuit the day after the due date, as long as you have proof of delivery of the pre-action notice.

Who pays the court costs?

If you win, the losing debtor pays the costs (court fee, legal representation). However, if the claim is not upheld, you as the claimant bear the costs.

Can I recover a debt from a sole trader who has ceased trading?

Yes. Ceasing to trade does not release a debtor from the obligation to pay liabilities incurred during their trading activity. You pursue the claim directly against the individual.

What should I do if the debtor is insolvent?

If the debtor is insolvent, you must file your claim with the insolvency court within the deadline set in the insolvency order (typically 2 months). Claims filed after the deadline are not satisfied. The insolvency register is available at isir.justice.cz.

Is it worth pursuing small claims (under 5,000 Kč)?

Small claims can be pursued efficiently through the electronic payment order — the court fee is just 300 Kč. If you have multiple small claims against the same debtor, you can combine them and pursue them all at once.

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Useful Links to Official Sources

• Justice.cz — e-filing portal for electronic payment orders
• Insolvency Register (ISIR)
• Czech Chamber of Bailiffs — list of enforcement officers
• Czech National Bank — current repo rate
• Act No. 89/2012 Coll., Civil Code — late payment interest

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This article is for informational purposes only and does not constitute legal advice. For more complex disputes, we recommend consulting a solicitor. Last updated: February 2026.