Seizure and sale is a compulsory enforcement procedure enabling a creditor to sell the debtor's movable property in order to obtain repayment. As part of this procedure, an amicable sale is a compulsory preliminary stage, favoured by the legislator to avoid the depreciation of assets often seen at public auction. This phase gives debtors a chance to control the sale of their seized assets. This approach, although specific, is part of the general framework for the seizure and sale of movable propertyThis measure is subject to strict conditions and procedures. It is essential to understand that this procedure, which focuses on movable property, is fundamentally different from the seizure of propertyThe procedure and rules are specific to each building.
Introduction to out-of-court sales in attachment of movable property: principles and essential distinctions
The seizure and sale procedure, traditionally perceived as a threat to the debtor, has evolved to incorporate a more pragmatic approach that is less damaging for both parties. The amicable sale, which can be seen as a request for an amicable sale with implicit judicial authorisation, was introduced as an alternative to the forced sale by auction, which was often unprofitable for the creditor and frustrating for the debtor, who saw the proceeds of the sale of his assets set at derisory prices.
History and foundations of out-of-court sales in foreclosures
Inspired by the practice of encouraging debtors to find buyers themselves, this approach was formalised to give debtors a sense of responsibility and enable them to play an active part in resolving their difficulties. The legislator, aware of the better financial results obtained by these voluntary sales, has made this phase an essential one, relegating the forced auction sale to the rank of last resort. The aim is twofold: to obtain a better sum for the assets and to offer a less traumatic solution for the debtor, an approach confirmed by consistent case law.
The central role of the court commissioner in enforcement
The key player in this procedure is the judicial commissioner (formerly a bailiff), whose status has been reformed to bring together the skills of bailiffs and auctioneers. It is the commissioner who, mandated by the creditor with an enforceable title, implements the seizure. Their role is not limited to mere execution: they are the guarantors of compliance with deadlines and formalities, and an essential intermediary between the debtor, the creditor and potential buyers. They are responsible for every stage of the process, from the service of documents to the final distribution of funds. The involvement of this ministerial department is therefore a key issue.
Implementation of the out-of-court sale: deadlines set for the debtor and management of seized assets
The out-of-court sale phase cannot begin until the debtor has been served with a order to pay prior to seizure and saleThis is the founding document whose formalities and potential nullities determine the entire procedure. Once the writ of seizure has been served, the debtor has a strict framework within which to attempt to sell each item of seized furniture himself, while having to respect the fact that it is unavailable.
One-month period for the debtor: calculation and irreducible nature
In accordance with article L. 221-3 of the French Code of Civil Enforcement Procedures, the debtor has one month to find one or more buyers. This period runs from the date of service of the writ of seizure. This period cannot be suspended or interrupted, even if negotiations are underway. The well-established case law of the Court of Cassation confirms that even a rapid refusal of an initial proposal by the creditor does not immediately open the way to a forced sale; the debtor retains the right to make other offers until the month has expired in full.
Conditions and formalities for debtor's proposals for sale
The debtor must actively seek out serious offers. Although the law does not impose any rigid formalities on the agreement between the debtor and a potential buyer, a written document is strongly recommended to avoid any disputes. At the very least, the agreement should specify the purpose of the sale, the amount offered and the period within which the buyer undertakes to pay the price. The debtor must then communicate these proposals in writing to the court commissioner, mentioning the name and address of the buyer and the agreed payment deadline (art. R. 221-31 of the Code of Civil Enforcement Procedures), an operation that requires great precision.
Unavailability of seized assets: scope and exceptions
During the entire one-month period, and until the sale proceeds have been paid, the seized assets remain unavailable. The debtor, who is usually the custodian of the assets, is responsible for them and cannot move or dispose of them. This unavailability guarantees the creditor that the assets will remain available for sale. There are exceptions, in particular if a move is made necessary for a legitimate reason, provided the creditor is informed in advance. The enforcement judge may also, on application, order that the items be deposited with a receiver appointed by the judge.
Informing creditors and the role of the commissaire de justice: the challenge of 'silence means acceptance
Once the debtor's proposals have been received, the judicial commissioner plays a crucial role in communicating and informing the creditors. This is a delicate stage, governed by strict deadlines and marked by a legal principle with important consequences: jurisprudence considers that the silence of creditors is tantamount to acceptance.
Obligation and methods of communication by the bailiff to creditors
Article R. 221-31 of the Code of Civil Enforcement Procedures, in its current version, requires the court commissioner to communicate the debtor's proposals to the pursuing creditor and to all opposing creditors. This communication must be made by registered letter with acknowledgement of receipt. Although no time limit is imposed on the judicial officer for this communication, he may be held liable if he fails in his duty to inform and advise, in particular by failing to indicate to the creditors the time limit for responding and the consequences of failing to respond, a question often debated in case law.
The principle of 'silence is equivalent to acceptance' by creditors: analysis and risks
Creditors have fifteen days from receipt of the liquidator's letter to make their decision. Article R. 221-31 of the Code of Civil Enforcement Procedures is clear: "In the absence of a response, the creditor is deemed to have accepted". This principle of "silence equals acceptance" has far-reaching consequences. A case law decision by the Paris Tribunal de Grande Instance even held that creditors were deemed to have accepted an offer of amicable sale even though they had not been informed of it due to an omission by the bailiff (TGI Paris, JEX, 9 Feb 1995). This highlights the risk of a negligent creditor being forced into a sale they did not want. A lawyer can help make this phase more secure.
Reasoned refusal by creditors: criteria for inadequacy of the proposal
A creditor may refuse a proposal, but this refusal must be justified. The only legitimate ground for refusal provided by law is the inadequacy of the proposal (article L. 221-3 of the Code of Civil Enforcement Procedures). Inadequacy is generally assessed in relation to the amount offered, which may be deemed too low in relation to the value of the property or the amount of the claim. However, the assessment remains delicate, and judicial case law has clarified the contours of this concept. It would be difficult to refuse an amount deemed to be "serious" in relation to the market, even if it does not cover the entire debt, because an auction would not guarantee a better product. In case of doubt, the court commissioner can refer the matter to the enforcement judge, who will hold a hearing to rule on the legitimacy of the refusal, a decision that will be authoritative.
Completion of the out-of-court sale and its legal effects: payment, transfer of ownership and cancellation of securities
Once the creditors have accepted the sale proposal, either expressly or tacitly, the procedure enters its final phase. The payment of the amount is the central act that determines all the legal effects of the sale: the transfer of ownership, the delivery of the property and the discharge of registrations. Completing the sale is an essential operation.
Terms of payment of the price and suspensive effect on transfer of ownership
The sale price must be paid to the commissioner of the distraining creditor. Under article R. 221-32 of the French Code of Civil Enforcement Procedures, transfer of ownership and delivery of the property are subject to actual payment of the sum. This is a suspensive condition: as long as the buyer has not finished paying the price, the sale is not complete and the property remains the property of the debtor, but still subject to unavailability. If payment is not made within the agreed period, the amicable sale is deemed to have failed, paving the way for a judicial sale. Once the sum has been paid to the court-appointed receiver, the opposing creditors will be able to claim payment from the funds available, a logic that is similar to the direct payment offered by the attachment of the sale price.
Transfer of ownership, delivery and release of seizure
Once the amount has been paid in full to the judicial officer, ownership is transferred to the buyer. It is at this point that the judicial officer can release the seizure and sale, which removes the unavailability of the movable property. Caution should be exercised in the case of payment by cheque: the release can only be granted once the cheque has actually been cashed, because only cashing the cheque constitutes actual payment, as established case law states.
Impact of the reform of securities law on registrations
The reform of the securities law of 2021 modernised the rules relating to security interests such as pledges and collateral, which has a direct impact on the way in which each registered security interest is handled and written off after an amicable sale. Decree no. 2021-1888 of 29 December 2021, relating to this reform, has strengthened legal certainty for purchasers. Following the publication of this decree in the Journal Officiel, its entry into force on 1 January 2023 has changed practice. The court commissioner must now consult the register of movable sureties and serve the writ of seizure on the creditors holding a published surety. Once the amount has been paid, the security registrations are cancelled, guaranteeing the purchaser title to the property free of all rights.
Amicable sale of intangible movable property: the case of financial securities
The out-of-court sale procedure also applies to intangible movable property, such as securities and shareholder rights. These financial securities are seized by serving a writ on the third-party issuer (the company) or the financial intermediary holding the account. The attachment deed renders the pecuniary rights (dividends, interest) attached to these securities unavailable. The debtor can then look for a buyer within the same one-month period. If the amicable phase fails, the forced sale of these securities is carried out on the market if they are listed, or by auction for unlisted securities, following specific formalities. The case law on this point is particularly technical.
The failure of an amicable sale: analysis of the causes, consequences and recourse to forced sale
Despite its advantages, amicable sales frequently fail in practice, for reasons relating to both the debtor and the creditors. This failure then triggers a compulsory sale by public auction. The failure of an amicable sale, whether due to a lack of buyers or the refusal of creditors, often paves the way for a forced sale, which can generate a number of problems. incidents of seizure and saleThese may include objections or disputes over the ownership of property, which may require a hearing before a judge.
Recurring causes of failure and resistance from debtors and creditors
On the debtor's side, failure often stems from unfamiliarity with the procedure or a lack of diligence in finding buyers. The one-month deadline may prove too short, and the distraught debtor may prefer to use this time to negotiate a payment schedule with his creditor, an approach often advised by his lawyer. On the creditors' side, there is a strong temptation to refuse offers that are deemed insufficient, in the hope, often in vain, of obtaining a better result at a forced sale. This mistrust and strategic calculations contribute to the marginalisation of amicable sales, a fact documented by case law.
Switching to forced sales by public auction: procedures and preliminaries
If the amicable sale fails (no proposal, refusal by the creditors or non-payment of the amount), the procedure switches to compulsory sale. This sale cannot take place before the expiry of the one-month period, plus the creditors' two-week cooling-off period. It must be preceded by strict publicity formalities, in particular by posting notices at the town hall and at the place of sale, at least eight days before the date set. Publication in a legal gazette may also be required. The debtor must also be personally informed of the place, day and time of the sale. These steps ensure a degree of transparency before the final auction of each item of personal property.
Given the complexity of the timeframes and formalities involved in an out-of-court seizure-sale, the assistance of an lawyer specialising in enforcement procedures is crucial to securing the procedure, whether you are a debtor or a creditor. A lawyer will be able to analyse the applicable case law and defend your interests to the best of his ability at each hearing.
Sources
- Code des procédures civiles d'exécution, articles L. 221-1 et seq., R. 221-30 et seq.
- Decree no. 2021-1888 of 29 December 2021 on the reform of the law on securities.
- Order no. 2021-1192 of 15 September 2021 reforming the law on securities.
- Case law of the Court of Cassation, Civil Division.
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