This article is a contribution by Attorney Sanghoon Kim of Choi & Lee Law Firm. If you would like to share quality content for startups in the form of a contribution, please contact the Venture Square editor team at editor@venturesquare.net.
“I haven’t received the money I lent. Should I sue?”, “I need to get my deposit back, but I’m worried about the attorney’s fees.” When financial problems arise, the first solution that many people think of is a civil lawsuit. However, disputes are not necessarily resolved through a trial. The system that can be utilized in this case is the payment order application. Simply put, a payment order is “a procedure to receive a court decision without a formal lawsuit,” and if the other party does not raise an objection, it has the same effect as a final judgment.
1. Payment order, an unfamiliar but powerful means of restoring rights
When a dispute arises in a financial transaction, many people first think of 'lawsuit'. However, lawsuits can be costly and time-consuming, and in many cases, people find it difficult to actively exercise their rights due to fear of legal procedures. In such cases, a system that can be utilized more conveniently is the payment order application.
A payment order is a simple procedure in which the court issues a decision to the creditor to "pay money" based on documents alone, without a formal trial. If the other party does not object to the court's payment order within two weeks, it has the same effect as a final judgment after an actual lawsuit is filed, and compulsory execution is also possible. In other words, a payment order is a powerful means of exercising a claim against the other party without a lawsuit, and it is a system that is very frequently used in actual practice.
This payment order system is a procedure stipulated in Article 462 and subsequent sections of the Civil Procedure Act, and is a non-litigation procedure that a creditor can apply to the court to receive money, securities, or substituted goods. This procedure is conducted entirely through document examination, and if the court accepts the applicant's claim, it will deliver a payment order to the other party (debtor).
The debtor may file an objection within two weeks of receiving the payment order, and if no objection is filed during this period, the payment order will be confirmed as is. A confirmed payment order has the same effect as a final judgment in a civil suit, so it can be used to apply for compulsory execution on the debtor's property. The core of the payment order system is that legal enforcement is achieved by simply meeting certain procedures without going through a formal trial.
The advantage of a payment order is that it is inexpensive. Compared to civil litigation, the recognition fee and delivery fee are lower, so there is less financial burden. In addition, the procedure is simple, so you can apply directly, and the speed is fast enough to usually receive the result within a few weeks, so it opens the way to efficiently exercise your rights.
2. When can I use a payment order?
The actual payment order is a system that can be widely used in various financial disputes in daily life. The most representative example is when you lend money but do not receive it back on time. In this case, if you have basic supporting documents such as a loan certificate, bank transfer history, or text or messenger conversations, you can collect the debt without a formal lawsuit through a payment order. Similarly, a payment order can be used effectively when you provide goods or services but do not receive payment. Simple contracts, transaction history, and text messages containing the debtor's receipt confirmation are also important supporting documents. Furthermore, a payment order can be a very practical option when you need to request the return of a deposit or penalty in a real estate contract or various private contracts. If you can prove the fact of contract termination and the reason for return, you can quickly collect the debt unless the other party raises an objection.
In this way, a payment order is a very useful system for quickly securing performance from the other party when there is a 'specific claim such as money' and basic data to support it is secured. However, if the case is complex or the debtor is expected to raise a strong possibility of dispute, it is advisable to consider a more strategic response with a formal civil lawsuit in mind rather than a payment order.
3. What should I be careful about when applying for a current order?
Although a payment order is a simple and effective means of redress, there are also some things to be aware of. In particular, the most important thing to be aware of is when the other party objects to the payment order. In this case, the payment order procedure is suspended and converted to a formal civil lawsuit, so the procedure may be longer and more complicated than initially expected. Therefore, it is important to review in advance whether the other party is likely to dispute the matter.
Also, when applying for a payment order, you must have the minimum amount of documentation that can prove the existence of the debt. Simply claiming that you “lent money” is not enough; you need supporting documentation such as a loan certificate, remittance history, text messages containing transaction history, or messenger conversations. If these documents are insufficient, the payment order application may be rejected by the court, so you must prepare thoroughly in advance.
In addition, problems can arise even if the statute of limitations for the debt has already expired. For example, if you lend money and do nothing for a long time, the right to legally claim may disappear after a certain period of time. To prevent this, it is important to check whether the debt is still valid before claiming, that is, whether the statute of limitations has not expired, and to take the necessary legal action before it is too late.
4. Substantial remedies available to everyone
Rights can only be protected by those who stand up and claim them. And the method of exercising those rights does not necessarily have to be complicated and burdensome. In cases where the amount in dispute is not large or the conflict with the other party seems relatively simple, a payment order can be a realistic alternative that allows you to realize your rights quickly and efficiently without going through a formal lawsuit. In this way, a payment order is a system that lowers the threshold for legal procedures and makes you feel closer to the protection of the law in your daily life, and is a system that you should definitely consider if you are not receiving the money you rightfully deserve.
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