When a creditor has a claim that appears legitimate but is not yet recognised by an enforceable title, he is in a precarious situation. If the debtor encounters financial difficulties and is the subject of collective proceedings, there is a great risk that his chances of recovery will vanish. In the face of this peril, seizure is an essential protective measure. It makes it possible to "freeze" or block the debtor's assets pending a court decision. However, the opening of safeguard, reorganisation or liquidation proceedings sets off a race against time. Creditors must act with absolute speed and procedural rigour to transform their provisional guarantee into an effective right to payment. Any hesitation or error can wipe out the efforts made.
This article details the critical interaction between protective measures and insolvency proceedings. It explores the mechanisms that can be used to protect a claim, the devastating effects of an opening judgment on a seizure in progress, and the strategies to be adopted to secure one's rights. We also look at the impact of recent reforms, such as that of the status of sole trader, which redefine the scope of assets that can be seized. For advice tailored to your situation, our firm is at your disposal.
Understanding protective attachment: an essential guarantee for creditors
Attachment is a judicial security measure that allows a creditor to make the debtor's tangible or intangible movable assets unavailable. Its purpose is not to secure immediate payment, but to guarantee future payment. It ensures that the debtor will not be able to organise his insolvency by dissipating his assets while the creditor takes steps to obtain a judgment against him. This procedure is common practice in debt collection.
In order to implement this procedure, the creditor must obtain the authorisation of the enforcement judge, unless he already has a writ of execution, even one that is not final (such as a summary order with provisional enforcement), or a specific document such as an accepted bill of exchange. The judge will only grant this authorisation if two cumulative conditions are met, as set out in article L. 511-1 of the Code of Civil Enforcement Procedures (CPC): a claim that appears to be well-founded in principle and in amount, and the existence of circumstances likely to threaten its recovery. The creditor does not have to prove his claim irrefutably at this stage, but only demonstrate that it is likely. The threat may arise from the debtor's precarious financial situation or from his behaviour (concealment of assets, for example).
The impact of a ruling opening collective proceedings on ongoing seizures
The decision to open safeguard, receivership or liquidation proceedings has a radical effect: it paralyses the prerogatives of previous creditors. This rule, dictated by the need to deal collectively with the company's liabilities and preserve its chances of survival, has direct and often dramatic consequences on the protective measures already in place.
The principle of a stay of individual proceedings (art. L. 622-21 C. com.)
Article L. 622-21 of the French Commercial Code stipulates that the opening of the insolvency proceedings suspends or prohibits all legal action by creditors whose claims arose prior to the opening. This principle of public policy puts an immediate end to all individual enforcement measures, whether against the debtor's movable or immovable property. As soon as the judgment is delivered, a creditor can no longer initiate a new seizure to obtain payment of his claim. Those initiated before the judgment are paralysed, their fate depending on their progress at that precise date.
What happens to a seizure that has not been converted before judgment: lapses and release
The tipping point is the conversion of the protective attachment into a final enforcement order. If a protective attachment levied prior to the opening of insolvency proceedings has not yet been converted into an attachment for payment by obtaining a final enforcement order, it becomes null and void. Case law is consistent on this point: the onset of the collective proceedings puts an end to the protective attachment and its special allocation effect. The funds that had been made unavailable revert to the debtor's assets and, consequently, to the common pledge of all creditors. The Commercial Chamber of the Court of Cassation has thus ruled that sums isolated in a special account by a bank following a protective attachment are deemed to appear in the debtor's overall account on the day of the liquidation judgment if the conversion has not taken place (Cass. com., 25 September 2019, no. 18-16.178). The distrainor then loses the privilege of his guarantee and reverts to being a simple unsecured creditor, obliged to declare his claim as a liability and wait for a possible distribution by the pound, after payment of the costs of the proceedings.
From protective attachment to attachment for payment: a decisive procedural conversion
To avoid lapsing, the creditor must convert his protective measure into a genuine enforcement measure: attachment for payment. This procedure, which transfers ownership of the seized claim to the seizing creditor, must be completed before the judgment opening the collective proceedings. For a full analysis enforcement mechanisms such as attachment for paymentOur dedicated guide provides detailed information. Its validity is based on strict formalities, each stage of which is punishable by nullity or lapse.
The seizure-attribution deed and its compulsory particulars on pain of nullity
Conversion is effected by serving a writ of attachment on the third party (for example, the debtor's bank). This document, drawn up by a judicial commissioner (formerly a bailiff), must contain a certain number of compulsory details listed in article R. 211-1 of the Code of Civil Enforcement Procedures, failing which it will be null and void. These include a statement of the enforceable title under which the seizure is made and a separate breakdown of the sums claimed in principal, interest and costs. The omission or inaccuracy of these details may be invoked by the debtor to request the annulment of the entire procedure.
Notification to the debtor: a deadline of 8 days on pain of nullity
Once the document has been served on the garnishee, the creditor has eight days to notify the debtor of the seizure. This notification, made by a court commissioner, informs the debtor of the measure and starts the one-month period within which the debtor may contest it. Compliance with this eight-day period is a fundamental condition of validity. Article R. 211-3 of the CPC is unambiguous: failure to comply will result in the seizure lapsing. An act of denunciation served on the ninth day retroactively annuls all the effects of the procedure, including the immediate allocation of the claim to the distrainor.
The new status of sole trader (EI): what impact on attachable assets?
The Act of 14 February 2022 radically reformed the status of sole trader by introducing an automatic separation between business assets and personal assets. This measure, which came into force on 15 May 2022, has a direct impact on the scope of assets that can be seized and redefines creditors' collection strategies.
From now on, the sole trader is the owner of two separate assets without the need for a declaration. Creditors' rights of lien are limited in nature: creditors whose claims arise from the business activity (an unpaid invoice, unpaid business rent) can in principle only pursue recovery against the business assets. On the other hand, personal creditors (debts unrelated to the business) can only seize personal assets. This duality of assets means that, before taking any protective measures, the debtor must identify the nature of the debt in order to target the right assets. This distinction lies at the heart of any potential dispute. The law provides for exceptions, in particular the possibility for the entrepreneur to waive this protection for a specific commitment (a bank loan, for example) or for personal creditors in the event of insufficient personal assets, who may then seize the business assets up to the limit of the profit for the last financial year for which the accounts have been closed.
Attachment of remuneration: anticipating the 2025 reform and diversion of the courts
The attachment of earnings procedure, which allows part of a debtor's wages to be deducted directly from his employer, will undergo a major transformation from 1 July 2025. The Confidence in the Judiciary Act provides for the procedure to be diverted from the courts, transferring jurisdiction from the judge to the judicial officer. It is essential for creditors and employers to understand the latest developments in the attachment of earnings.
This reform abolishes the prior conciliation phase before the judge. The procedure will be managed entirely by the judicial commissioners, from the issue of the summons to pay to the distribution of the funds. All seizures will have to be entered in a national digital register, an innovation designed to centralise information, ensure the traceability of procedures and coordinate the distribution between creditors in the event of multiple seizures on the same debtor.
The central role of the judicial commissioner and the digital register
A court-appointed administrator, known as a "dispatcher", will be appointed for each procedure. He or she will be the sole contact for the employer (the garnishee), responsible for receiving the funds levied and paying them to the creditors. The digital register will play a key role in preventing competing seizures and ensuring fair distribution. For employers, this centralisation should simplify the management of seizures. For creditors, it promises a faster, paperless procedure, but one that will require a thorough understanding of the new procedural arrangements to remain effective.
Immunity from execution: when seizure becomes impossible
Immunity from execution is a principle that prevents any measure of forced execution against certain entities, because of their special status. It is an absolute obstacle that paralyses the creditor's prerogative, even if he is in possession of a final enforcement order. It is important to know the conditions of application of immunity from execution to avoid futile lawsuits.
Immunity of French public bodies and unseizability of their assets
Under French law, the State, local authorities and public establishments enjoy immunity based on the principle of continuity of public service. Their assets cannot be seized. This means that a debt collector cannot seize the bank accounts of a local authority, for example. They must use specific administrative law enforcement methods, such as the compulsory payment procedure, to obtain payment.
Foreign state immunity: the strict framework of waiver (Sapin 2 Act)
The immunity of foreign states is a principle of customary international law. However, the so-called "Sapin 2" law of 9 December 2016 has very strictly framed the conditions for circumventing it. Any enforcement measure against a foreign state requires prior authorisation from a judge. In addition, for assets used in the exercise of the diplomatic mission (embassy accounts, for example), Article L. 111-1-3 of the Code of Civil Enforcement Procedures requires a waiver from the State that must be both "express and special". A general waiver of immunity in a contract is no longer sufficient. Recent case law interprets this condition very rigorously, distinguishing, for example, between the functions of a diplomatic mission and the diplomatic activity of a Head of State (Civ. 1re, 13 March 2024), which makes it particularly difficult to seize these assets.
Strategies and reflexes for creditors faced with a debtor in difficulty
When faced with a debtor whose solvency is deteriorating, anticipation is the key to protecting the debtor's rights. Here is a list of essential reflexes:
- Act now : As soon as the first unpaid debts are identified, steps must be taken to obtain a writ of execution. Every day counts before collective proceedings are opened.
- Taking precautionary measures : As soon as a debt appears to be well-founded and its recovery is threatened, a protective attachment is the first line of defence. It establishes the date and makes the assets unavailable.
- Convert the entry as quickly as possible : Once the writ of execution has been obtained, it must be immediately followed by the act of conversion into an attachment order. The procedure must be carried out with absolute rigour, in particular compliance with the eight-day notice period, failing which the attachment will lapse or be lifted.
- In the event of open collective proceedings : If it has not been possible to finalise the conversion in time, it is imperative to apply to the court-appointed agent or liquidator for a declaration of claim within the legal timeframe (generally two months from publication of the opening judgment in the BODACC). Failure to make this declaration will extinguish the claim, even if it is the subject of ongoing litigation.
- Monitoring the suspect period: It is important to pay close attention to any actions taken by the debtor between the date of cessation of payments and the opening of the insolvency proceedings. Certain acts, such as abnormal payments or gifts, could be annulled by the Commercial Court, thereby reconstituting the debtor's assets for the benefit of the creditors.
The confrontation between a protective measure and collective proceedings is a real test of speed and legal technique. Precautionary attachment is a powerful tool, but its survival depends on the creditor's ability to finalise its conversion before the knife falls and individual proceedings are halted. In this context, mastering the subtleties of procedure and anticipating the debtor's difficulties are the best guarantees for recovery. To analyse your situation and find the best solution, we recommend that you consult a lawyer. Do not hesitate to request tailor-made legal support.
Sources
- French Commercial Code: Articles L. 622-21 (Stay of individual proceedings)
- Code des procédures civiles d'exécution: Articles L. 511-1 (Conditions of protective attachment), R. 211-1 (Particulars of the writ of attachment), R. 211-3 (Denunciation of attachment), L. 111-1-3 (Immunity of foreign States from execution)
- Law no. 2022-172 of 14 February 2022 to promote self-employed professional activity
- Law no. 2016-1691 of 9 December 2016 (Sapin 2 Law)
- Law no. 2023-1059 of 20 November 2023 on the orientation and programming of the Ministry of Justice 2023-2027 (Diversion of attachment of earnings)
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