When a creditor is concerned about recovering its debt, inaction can be costly when faced with a debtor likely to organise its insolvency. Precautionary measures are preventive legal tools designed to secure and preserve the creditor's rights pending a final court decision. They make it possible to "freeze" part of the debtor's assets in order to guarantee his future solvency. Taking precautionary measures is a technical process that requires the expertise of a lawyer to ensure its validity and effectiveness. The aim of this article is to provide an overview of these essential enforcement mechanisms, covering those aspects that are dealt with in depth in our dedicated books.
Introduction to precautionary measures: purpose and general framework
The primary purpose of a precautionary measure is to ward off a debtor's potential insolvency. It is a preventive measure designed to guarantee the effectiveness of any future enforcement action. In practical terms, it makes certain assets of the debtor unavailable, preventing them from being sold, given away or concealed. The plaintiff who initiates such a measure is seeking to safeguard his right of general pledge, i.e. the right of any creditor to seize his debtor's assets to obtain payment of his claim. These procedures act as a genuine judicial guarantee, assuring the pursuer that the assets will remain in the debtor's estate until the debt is settled.
Fundamental distinction: precautionary seizures and judicial sureties
The Code of Civil Enforcement Procedures distinguishes between two main families of protective measures, which share common provisions but have different mechanisms and purposes. On the one hand, protective attachments aim to make movable property belonging to the debtor unavailable. This may involve tangible assets (a vehicle, furniture) or intangible assets. The most common type of attachment is undoubtedly attachment of receivablesThis allows funds held by a third party, such as a bank, to be blocked. On the other hand judicial sureties are intended to charge an asset with a guarantee for the benefit of the creditor. They take the form of provisional registrations of mortgage on a building or pledge on a business. This registration gives the beneficiary a preferential right over the asset, ensuring that it is paid first in the event of a sale.
General conditions for implementing precautionary measures
The use of precautionary measures is not trivial and is subject to precise conditions, whether or not judicial authorisation is required. This matter is governed by strict legislation to protect everyone involved.
Requirement of a claim founded in principle and a threat of recovery
Article L. 511-1 of the Code of Civil Enforcement Procedures sets out two conditions. Firstly, the creditor must justify a claim that "appears to be founded in principle". An appearance of right is sufficient at this stage. Secondly, the creditor must prove the existence of "circumstances likely to threaten recovery". This threat is not simply the risk of insolvency, but may be characterised by specific behaviour on the part of the debtor: the practice of dissipating his assets, suspicious donations to close relations, or his manifest bad faith in the face of attempts at amicable recovery, which may cause irreversible damage.
Prior judicial authorisation or exemption
In principle, all protective measures must be authorised by a judge. However, article L. 511-2 of the same code provides for a number of important exemptions. The creditor does not need judicial authorisation if he is already in possession :
- a writ of execution, even if not final;
- a court decision that is not yet enforceable;
- an accepted bill of exchange, promissory note or unpaid cheque;
- a written property rental contract, for unpaid rent.
In these situations, the claimant's right is sufficiently established to enable him to act directly, on his own responsibility. The application of this exemption must be rigorous.
The central role of the enforcement judge and the president of the commercial court
The introduction and contestation of precautionary measures are subject to the control of specialised magistrates, who guarantee a balance between the rights of the creditor and the protection of the debtor, in accordance with the principles of civil procedure.
Jurisdiction and territory of the jex for protective measures
The enforcement judge (JEX) is the natural judge for protective measures. It is the judge of the court in the place where the debtor lives who has jurisdiction to authorise the measure. By way of exception, where the claim is commercial in nature and no proceedings have yet been commenced, authorisation may be sought from the President of the Commercial Court, pursuant to the Commercial Code. The JEX has exclusive jurisdiction to rule on difficulties relating to the enforcement of these measures, as its powers enable it to assess the validity of the instrument, the appearance of the claim and the reality of the threat.
Release and dispute procedure
A debtor who believes that a protective measure has been wrongly applied may apply to have it withdrawn. The competent judge varies: if the measure has been authorised by a judge, the application must be made to him or her. If it has been applied without prior agreement, the dispute is brought before the JEX of the place where the debtor lives. The debtor may contest the measure and make representations to the court. release requestsFor example, by providing sufficient security to cover the amount of the debt. All other disputes, particularly those relating to the actual execution of the seizure, come under the jurisdiction of the JEX of the place of execution.
Imperative deadlines and the risk of precautionary measures lapsing
The validity of precautionary measures is conditional on compliance with strict time limits, failure to comply with which results in their retroactive disappearance. This rule is designed to avoid leaving the debtor in a situation of uncertainty.
Time limit for implementing the measure and obtaining an enforcement order
Once the authorisation order has been obtained, the creditor has three months in which to have it enforced by a judicial commissioner (formerly a bailiff). Once this period has elapsed, the authorisation lapses. In addition, if the creditor does not already have a writ of execution, he must initiate proceedings to obtain one. This legal action must be brought within one month of the execution of the protective measure. If this time limit is not observed, the measure lapses and is deemed never to have existed.
The general effects of precautionary measures: unavailability of assets and the creditor's general right of lien
Once in place, the protective measure produces immediate and binding legal effects for the debtor, while conferring specific rights on the creditor to secure the value of its claim.
Consequences of the unavailability of seized assets
The main effect of a protective attachment is to make the seized goods unavailable. The debtor retains custody and use of the assets, but is formally prohibited from selling, giving or moving them. Any act of disposal carried out in breach of this prohibition would be unenforceable against the distrainor and would expose the debtor to criminal penalties to repair the damage. This unavailability guarantees that the assets will remain in the debtor's assets so that they can be seized at a later date.
The creditor's general right of lien and the protection of interests
Precautionary measures are one of the most concrete expressions of the general right of pledge granted to all creditors over their debtor's assets. They enable a theoretical right to be transformed into an effective guarantee. In the case of a precautionary seizure of debts, the measure even gives the seizing creditor a preferential right over the blocked sums. This means that it will be paid before the other unsecured creditors on the funds made unavailable, a constant legal development in business law.
Linking up with over-indebtedness procedures for private individuals
A debtor's situation can become more complex when a protective measure collides with over-indebtedness proceedings, an area where specific protective rules apply to prevent distress for a person, such as an employee.
Automatic suspension of legal proceedings and cancellation of debts
When an individual, such as an employee, files an application for overindebtedness and it is declared admissible, there are immediate consequences. Under article L. 722-2 of the French Consumer Code, the decision to accept an application entails the following legal and automatic suspension of enforcement proceedingsThis includes current protective measures. Creditors are prohibited from taking protective measures. The purpose of this suspension is to stabilise the debtor's financial resources. In the most serious cases, if a personal recovery procedure is ordered, it results in the cancellation of non-business debts, which definitively wipes out the claims and the measures that guaranteed them, particularly on property. This need to protect employees and their families is at the heart of the system.
The process of converting precautionary measures into enforcement measures
A precautionary measure is only a preliminary step. To obtain actual payment, the claimant must transform it into a compulsory enforcement measure once he has obtained a final court ruling.
Conversion of the seizure of tangible movable property into an attachment for sale
As soon as the creditor obtains a writ of execution, he can apply for the conversion into an attachment for sale. To do this, he must serve the debtor with a conversion deed giving him a final deadline for payment. If the debtor fails to comply, the commissioner of justice may then proceed to sell the assets. The debtor has one month in which to try to sell the assets out of court; failing this, a forced sale by public auction will be carried out.
Conversion of a protective attachment into an attachment for payment
For receivables, the conversion to attachment is a key step that immediately transfers ownership of the sum seized to the creditor. The act of conversion, served on the garnishee (usually the bank), is tantamount to immediate attribution. The debtor has fifteen days in which to contest the conversion. If there is no objection, the garnishee must pay the funds to the creditor. This procedure is particularly effective because it ensures rapid settlement.
Implementing a precautionary measure is a technical process that requires in-depth analysis and precise information to guarantee its validity and effectiveness. If your company is facing a risk of non-recovery of your receivables, do not hesitate to contact our firm for tailor-made advice.
Frequently asked questions
What is a precautionary measure?
A conservatory measure is an emergency procedure that allows a creditor to make a debtor's assets unavailable to secure future payment of a debt, even before obtaining a final judgment.
What is the difference between a protective attachment and a judicial surety?
Attachment of movable property (money, vehicle) to prevent it from disappearing. Judicial security (mortgage, pledge) attaches a guarantee to an asset, often a property asset, giving the creditor a preferential right in the event of sale, without making the asset physically unavailable.
Do I always need a judge's authorisation?
No, authorisation is not required if the applicant already has a writ of execution (even if it is not final), a court order, an unpaid cheque or a written tenancy agreement for unpaid rent.
How long is a precautionary measure valid?
After enforcement, if the creditor does not have a writ of execution, the law requires proceedings to be initiated to obtain one within one month. Otherwise, the measure lapses and is deemed never to have existed.
Can a precautionary measure be contested?
Yes, the debtor can apply to the judge who authorised the measure or, failing that, to the Enforcement Judge, for the measure to be lifted if he considers that the conditions have not been met (unfounded claim, no threat) or if he provides sufficient security.
What happens after you have obtained a final judgment?
The protective measure must be "converted" into a compulsory enforcement measure: an attachment for sale for movables or an attachment for payment for debts, so that the creditor can actually be paid.
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