The provisions governing payment orders in Part VI: Demand Proceedings of the Code of Civil Provisions before the 1 July 2015 amendment were enacted to help creditors quickly recover their rights to claim. However, knowing that applications for payment orders were subject to only documentary review and that payment orders have the effects of final judgments, some people with ulterior motives defrauded money out of others by means of payment orders that the courts issued to them in response to their applications. In order to curb such illegitimate use of the provisions, an amendment to the provisions for payment orders in the Code of Civil Procedure was promulgated on 1 July 2015.
- Creditors' new responsibility for explanation:
The amended provisions require creditors to explain the information they submit to prove their rights to claim when they apply to the court for issuance of payment orders. For instance, proof of the rights to claim has to be submitted for the court's consideration. (Amended provisions of Article 511 of the Code of Civil Procedure)
- According to the amended provisions, a payment order can be enforceable only.
According to the provisions before the amendment, if a debtor does not dispute a payment order within 20 days of receipt thereof, the payment order will have the same effects as a final judgment; that is to say, such payment order is binding upon and is enforceable against the debtor. If the debtor subsequently wants to dispute the truthfulness of the creditor's right to claim against the debtor, seeking s retrial on stringent conditions is the only relief the debtor can have. Such provisions are disadvantageous to the debtor. However, under the amended provisions, payment orders are only enforceable against debtors. According to the newly promulgated provisions, if a debtor does not dispute a payment order within 20 days of receipt thereof, he/she still may institute legal action to resolve any issues over private rights. On the other hand, if the debtor does not dispute a payment order within 20 days of receipt thereof, the creditor may request compulsory enforcement of the payment order by submitting a certificate of final ruling issued by the court. (Articles 514 and 521 of the amended Code of Civil Procedure)
- The amended provisions allow a debtor to request suspension of compulsory enforcement by posting an adequate bond.
If a debtor disputes a payment order within 20 days of receipt thereof, the payment order becomes invalid to the extent disputed by the debtor, and the creditor's request for payment order shall be deemed initiation of a suit or request for mediation. (Article 519 of the Code of Civil Procedure) If that debtor does not dispute the payment order within the time limit but wants to claim the nonexistence of the creditor's right to claim set forth in the payment order and institutes a suit for determination of the nonexistence of the creditor's right, the court may suspend the compulsory enforcement of the payment order after the debtor posts an adequate bond set by the court pursuant to Paragraph 3, Article 521 of the amended Code of Civil Procedure.
- Request for retrial of a payment order that has been finalized before the promulgation of the amended provisions must be filed within two years of the promulgation.
Payment orders that are finalized after the promulgation of the amended provisions are governed by the amended provisions. If a debtor intends to dispute a payment order that has been finalized before the promulgation of the amended provisions, the request for retrial must be filed within two years of the promulgation, and the lawsuit shall be deemed having been instituted at the time of application for the payment order. A person having no capacity or limited in capacity to conduct juridical acts may request retrial of a payment order from the date of promulgation of the amended provisions to two years after the person reaches adulthood.