An attachment procedure is often a dreaded ordeal, perceived as a total loss of control over one's assets. However, debtors are not helpless, and the law provides them with mechanisms to regain the initiative and protect their interests. Far from the image of a systematic public auction, French law favours, where possible, a more humane and often more profitable solution: the amicable sale of seized assets. This little-known alternative allows the debtor to sell the assets in question himself in order to repay his creditors. It is part of a wider framework of protection of the debtor during seizure proceedings and offers a way of controlling the timing and price of the sale, whether of movable property or real estate, including the entire foreclosure process can be complex. This article explains the conditions and advantages of this strategic option.
The advantages of the amicable sale of seized assets for the debtor
Opting for an amicable sale has two advantages for the debtor. On the one hand, it aims to maximise the proceeds of the sale and, on the other, it is a more dignified solution that avoids the often stigmatising nature of a forced sale.
Getting the best price and preserving the debtor's dignity
Forced sales at public auction take place within a restricted framework and a limited timeframe, which frequently leads to sale prices that are lower than the real market value. By allowing the debtor to look for a buyer himself, the amicable sale opens the door to traditional negotiation. The debtor can take the time to find a fair offer, increase the value of the property and sell it under much more favourable economic conditions. In this way, they can hope to obtain a price sufficient to pay off all their creditors, and potentially retain a residual amount. In addition to the purely financial aspect, this approach avoids the publicity and sometimes infamous nature of an auction, thereby preserving the debtor's reputation and goodwill.
The legal basis and the legislative will to avoid forced sales
The possibility of resorting to out-of-court sales is firmly anchored in the Code of Civil Enforcement Procedures. The legislature has clearly demonstrated its desire to make enforcement procedures more humane and to use forced sales only as a last resort. This approach applies equally to the seizure of movable and immovable property. The aim is to strike a balance between the creditor's legitimate right to obtain payment of his claim and the need to protect the debtor from proceedings that would be excessively prejudicial. By offering this way out, the law gives debtors an active role in resolving their own indebtedness, transforming them from passive subjects of the procedure into active participants in its outcome.
Out-of-court sales in cases of seizure and sale of movable property
Seizure and sale involves the debtor's movable assets (vehicles, equipment, furniture, etc.). In this context, out-of-court sales are governed by precise deadlines and procedures designed to reconcile speed and the protection of everyone's rights. To fully understand this mechanism, it is useful to place it in the broader context of fundamental principles of seizure and sale.
The procedure and deadlines granted to the debtor (one-month deadline, information to creditors)
The right to sell seized assets voluntarily is formalised by article L. 221-3 of the Code of Civil Enforcement Procedures. As soon as the debtor is notified of the seizure, he has one month to find a buyer and propose an amicable sale. This is a crucial period during which the debtor must act quickly.
In practical terms, the debtor must inform the enforcement agent in writing of the offers he has received. This information must include the identity of the potential buyer, his address and the proposed price. The bailiff then forwards these details to the distraining creditor and any other creditors who may have come forward (the opposing creditors). The latter have fifteen days to accept or reject the proposal. If they do not respond, this constitutes tacit acceptance. This is an important point, as it prevents a creditor from blocking the sale simply through inertia.
Deposit of the price and transfer of ownership
An out-of-court sale only becomes final once the purchase price has been paid. To secure the transaction for the benefit of creditors, the law requires the sale price to be deposited with the bailiff. Until this deposit is made, the seized property remains unavailable and in the custody of the debtor or the third party designated in the seizure deed. The transfer of ownership to the buyer and the delivery of the goods are therefore directly subject to this deposit. This step guarantees that the proceeds of the sale will be used to repay the debt. If the buyer does not deposit the price within the agreed time, the amicable sale fails and the compulsory sale procedure can then be initiated.
The importance of informing the debtor in the act of seizure
To ensure that this option of amicable sale is effective, the law requires that the debtor be clearly informed. The seizure and sale deed (the inventory report) must mention, on pain of nullity, that the debtor has a period of one month in which to proceed with the amicable sale of his assets. Articles R. 221-30 to R. 221-32 of the Code des procédures civiles d'exécution, which detail this procedure, must even be reproduced. This obligation to provide information is a fundamental guarantee. A debtor who is not properly informed cannot exercise this right, which would render the provisions meaningless. The validity of the entire attachment procedure therefore depends on compliance with this formal requirement.
Out-of-court sales in property seizures
When property seizure proceedings are initiated, an out-of-court sale remains an option, but its implementation is subject to the judge's control. This solution, described in detail in our article on out-of-court sales in foreclosure proceedingsis governed by articles L. 322-1 et seq. of the French Code of Civil Enforcement Procedures. It is designed to avoid the compulsory auction of the property, which is often synonymous with a significant loss of value.
Judicial authorisation of the out-of-court sale and setting the minimum price
Unlike a seizure of movable property, a property cannot be sold out of court without the intervention of an enforcement judge. It is the debtor who must make the request. If the judge grants the request, he or she sets two essential points: the minimum amount of the sale price and the date of the hearing at which the case will be recalled to check whether the sale has been concluded. The minimum price is determined on the basis of market conditions and the specific features of the property. The purpose of the judge setting the minimum price is to protect the interests of the creditors by ensuring that the property is not sold off, while providing the debtor with a realistic negotiating framework.
The amicable property sale procedure and its effects (purging of guarantees)
Once authorisation has been granted, the debtor looks for a buyer. The sale is concluded by notarial deed, like any conventional property sale. One of the most important effects of this procedure is the purging of registrations. When the buyer deposits the purchase price with the notary and pays the costs of the sale, all mortgages and liens against the debtor are removed from the property. In practical terms, the buyer receives a property that has been "cleaned" of all the seller's previous debts, which provides considerable security and a strong selling point. The price is then divided between the creditors according to their rank.
The role of the enforcement judge and possible challenges to the hammer price
The enforcement judge plays a central role as supervisor and guarantor of the balance of the procedure. In addition to his initial authorisation, he intervenes in the event of disagreement. In particular, the debtor has the right to challenge the price set by the creditor as part of the compulsory sale procedure if it appears to be manifestly insufficient. Under article L. 322-6 of the Code of Civil Enforcement Procedures, the debtor may apply to the court for a fairer price to be set, in line with the real value of the property. This option provides essential protection against creditors who might be tempted to set a very low bid to speed up the auction, sometimes to their own advantage. In such cases, the involvement of a lawyer is crucial in arguing and justifying the request for revaluation.
Guarantees offered to debtors and legal support
The amicable sale mechanism is backed up by safeguards to ensure that the debtor is not exposed to the arbitrariness of a creditor or is left powerless in the event of failure. The assistance of a lawyer ensures that these guarantees are fully respected.
Protection against abusive refusals by creditors
Can a creditor refuse a serious offer of amicable sale without a valid reason? The law provides a framework for this possibility. The distraining creditor has the right to refuse a proposal if he can establish that it is insufficient and that it jeopardises the recovery of his debt. However, the refusal must not be unreasonable. If the creditor's refusal is motivated solely by an intention to harm the debtor, the creditor could be held liable. Although it is difficult to prove such an intention, this limit prevents purely malicious behaviour and encourages creditors to assess the offers made objectively.
Consequences of a failed out-of-court sale
If the out-of-court sale is not completed within the allotted time, either due to a lack of offers, refusal by creditors for a legitimate reason, or failure by the purchaser to deposit the price, the compulsory execution procedure will resume. In the case of movable property, the bailiff may then organise the sale by public auction. In the case of real estate, the procedure will continue towards the auction hearing. The failure of the out-of-court sale does not, therefore, terminate the seizure proceedings; it simply marks the end of a period during which a negotiated solution can be found. It is in the debtor's best interests to use this time effectively.
Amicable sale is a strategic alternative to forced sale, but its implementation requires a good knowledge of the procedural rules and a high level of responsiveness. To help you make the most of these procedures and ensure that your rights are protected, we analyse and advise you on the best way to proceed. advice from an expert in enforcement procedures are essential. If you are faced with a foreclosure procedure, our firm can help you assess the advisability of an amicable sale and secure its completion.
Sources
- Code of civil enforcement procedures
- Commercial code
- Civil Code
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