Property seizure is often seen as the inevitable outcome of an unpaid debt. However, this enforcement procedure is not an absolute right for creditors. Legislation and case law have erected numerous ramparts to protect the debtor's assets, transforming a seemingly linear path into one strewn with legal obstacles. When faced with a property seizure, it is vital to be aware of your rights and legal protections. As a’expert in property seizures, Our firm helps debtors defend their assets by exploring all the possible loopholes and strategies on this page.
General principles governing the seizability and unseizability of immovable property
French law lays down a clear principle: any creditor with a writ of execution for seizure of property The debtor's assets may be seized if the debtor has a claim that is due and payable. However, this general right of lien, which is the basis for debt recovery, is not without limits. Important note: before examining the obstacles that can hinder a seizure, it is essential to understand the whole system. the foreclosure procedure, This is because it is at the heart of these mechanisms that many defence strategies lie. The law and agreements can exempt certain assets from creditor action, creating patrimonial sanctuaries that it is essential to identify. There is a fundamental distinction with the seizure of movables, where a precise list of assets necessary for the debtor's daily life and work (clothing, foodstuffs, professional tools) is protected.
Definition of seizable real estate by nature, purpose and object
A wide range of rights and assets can be subject to seizure. Firstly, it applies to immovable property by nature, i.e. the ground and everything anchored to it: land, buildings and constructions. Next comes immovable property by destination. These are objects or property that are initially movable, or even tangible, that the owner has attached to his or her land for service or operation, such as agricultural machinery or livestock on a farm, or industrial equipment in a factory. These assets cannot be seized separately from the main building.
Finally, seizure may involve rights in rem in immovable property, which are dismemberments of the right of ownership. A creditor can have a usufruct, which confers the right to use the property and receive income from it, or bare ownership seized. Other more complex rights, such as a building lease or co-ownership lots, also fall within the scope of seizable assets.
Buildings that are legally exempt from seizure: general framework and exceptions
The law itself sets out a list of assets that, by their nature or purpose, cannot be seized. The public domain of the State and local authorities cannot, as a matter of principle, be seized. Similarly, certain rights that are strictly personal and non-transferable by nature cannot be seized. This is the case with the right of use and habitation, which is granted to a person for his or her needs and those of his or her family, or the legal usufruct that parents enjoy over the property of their minor children. Buildings required for the activities of professional trade unions (meeting rooms, libraries, vocational training premises) are also protected by a specific legal exemption from seizure.
Unseizability of a sole trader's principal residence
The protection of the assets of sole traders, as individuals, has been a particular focus of the legislator, who is well aware of the risks that business activity poses to personal assets. The system for protecting the principal residence is a major step forward, creating a de facto separation between the entrepreneur's assets and those of his business. Information on this new status is crucial for entrepreneurs.
Automatic unseizability: mechanisms and effects
Since the «Macron» law of 6 August 2015, the principal residence of any sole trader is automatically exempt from seizure by professional creditors. This protection is automatic and does not require any special steps or the completion of a form. It applies to debts arising from the business activity after publication of the law. In practical terms, a supplier or bank whose debt is linked to the business activity cannot seize the house or flat where the entrepreneur lives in order to obtain payment. On the other hand, creditors with personal debts (consumer credit, family debts) retain their right to seize the property. If part of the residence is used for business purposes, only the part dedicated to the home and living quarters benefits from this protection.
The distinction between the personal and professional assets of the sole trader
To strengthen this protection, a single status for sole traders came into force in 2022, automatically separating their business assets from their personal assets. Business assets comprise all the assets, rights and obligations «useful» to the business. Anything that does not fall within this scope constitutes personal assets. Only business assets can be seized by business creditors. However, entrepreneurs can waive this protection for a specific commitment, for example to obtain bank credit. This waiver must be express, formalised in writing for a specific amount and after a period of reflection, offering a protective framework against hasty decisions. This practice is becoming more widespread.
Impact of insolvency proceedings on the unseizability of the principal residence
What happens to this protection when the entrepreneur goes into receivership? The Court of Cassation has ruled that the unseizability of the principal residence is enforceable against the liquidator. This means that the liquidator cannot sell the property to pay off the company's creditors. The opening of safeguard, reorganisation or judicial liquidation proceedings raises complex questions as to the enforceability of this protection, profoundly modifying the principle of protection against seizure of the principal residence.’impact of insolvency proceedings on enforcement. There is one important exception: if all the creditors in the proceedings have claims that arose before the Protection Act came into force, the liquidator can take action and request the sale of the property.
Specific legal obstacles to the seizure of immovable property through the will of the parties
In addition to legal protection, contractual mechanisms or voluntary declarations can prevent the seizure of a property. These strategies, which are based on the will of the owners, make it possible to organise in advance the non-seizability of certain elements of the estate. Good information on this type of approach is essential.
Notarised declaration of unseizability for property other than the main residence
Sole traders can extend the protection of their assets beyond their main residence. They can declare any other property, whether built or not, that is not used for business purposes to be exempt from seizure. This declaration must be made in a notarial deed and published in the land registry and the relevant legal register to be enforceable against creditors. As with the main residence, this protection only applies to business debts arising after publication of the declaration. Case law has confirmed that this exemption from seizure continues even after the cessation of professional activity, as long as the professional debts concerned have not been extinguished.
Effects of inalienability clauses in deeds of gift on seizability
Deeds of gift or wills may contain a clause prohibiting the beneficiary from selling the property received. Historically, case law has held that such a clause also renders the property exempt from seizure. The idea is simple: if the donee cannot sell the property of his own free will, his creditors cannot force him to sell it either. To be valid, this clause must be temporary and justified by a serious and legitimate interest (for example, ensuring that the property remains in the family until the donor's death). Nor can the creditor act on the debtor's behalf to apply to the courts for the clause to be lifted, as this action is strictly personal to the donee.
The tontines agreement: a brake on property seizures
The tontine agreement, or clause d'accroissement, is a mechanism for the acquisition of a property by several people, under which the last survivor is deemed to have been the sole owner from the outset. Throughout the term of the agreement, the purchasers only have a right of ownership subject to a double condition: their survival and the predecease of their co-purchasers. This complex legal situation is a major obstacle to seizure. The personal creditors of one of the purchasers cannot seize the property, as their debtor is not yet the full and final owner. Nor is it possible to seize the purchaser's undivided share, as the tontine excludes the undivided ownership regime. It is also impossible to seize the entire property, as it does not belong exclusively to the debtor.
Specific protections and immunities in property seizures
Certain legal situations, linked to the nature of the property right or the status of the debtor, create procedural obstacles or immunities that paralyse the action of the debtor. These protections require a detailed analysis of the rights involved and good information from the lawyer.
Undivided rights: seizure by personal and joint creditors
When a property is jointly owned, i.e. it belongs to several people without their respective shares being materially divided, the rules for seizure are specific. Creditors of the joint ownership (for example, for debts relating to the upkeep of the property) can seize the joint property and have it sold. However, the personal creditors of a single joint owner cannot seize their debtor's share. They do have another option, under article 815-17 of the Civil Code, which is to bring about partition in the name of their debtor. In this way, they force the exit of the joint ownership so that, once the lots have been distributed, they can seize the assets allocated to their debtor.
Immunity from execution of public property and foreign States
The non-seizability of property belonging to the State and local authorities is a fundamental principle of public law. It is therefore impossible for a creditor to have an administrative building or a school seized. Immunity from execution also protects foreign states, but it is not absolute. It only applies to property used for non-commercial public service purposes (embassies, consulates, including access to their telephone service). Goods used for commercial or private activities may, under certain conditions and with judicial authorisation, be subject to seizure. The purpose of this distinction is to avoid paralysing the sovereignty of a State, while enabling debt collectors to recover their debts when the State is acting as a mere economic player.
The impact of matrimonial property regimes on the seizure of joint assets for own debts
Under a joint property regime, the payment of each spouse's debts may in principle be pursued out of the joint assets. However, article 1415 of the Civil Code introduces an important safeguard. In the case of a debt arising from a guarantee or loan taken out by only one spouse, joint property may only be seized if the spouse has given his or her express consent to the act. Without this consent, only the debtor spouse's own property and income may be seized. This rule protects the family assets against commitments made unilaterally by one of the spouses that could prove risky.
Strategies for defending debtors against seizure of property
Faced with a property seizure, the debtor is not helpless and has several defence strategies at his disposal, all of which will be arbitrated by a key figure: it is therefore essential to understand how the debtor's rights are protected. central role of the enforcement judge (JEX). These mechanisms make it possible either to limit the scope of the seizure or to suspend its effects, offering valuable respite for finding solutions. Each page of our site explores a different facet of these strategies.
Limiting the scope of property seizures
When a pursuing creditor has seized several properties belonging to the debtor, the debtor may ask the enforcement judge to limit the seizure. This involves limiting the proceedings to one or more properties whose value is deemed sufficient to pay off the pursuing creditor and the other registered creditors. Proceedings are then temporarily suspended against the other properties. Act no. 2019-222 of 23 March 2019 amended article L. 311-5 of the Code of Civil Enforcement Procedures, now requiring the pursuing creditor to prove that the seizure of a single property is insufficient. This reform has created legal uncertainty by contradicting the mechanism of "cantonnement", which historically placed the burden of proof on the debtor. In practice, this is a procedural point that can be raised to challenge a seizure that is deemed excessive.
Partial conversion of the seizure into a mortgage: a procedural alternative
Following the same logic as the "cantonnement", a debtor whose several properties have been seized simultaneously may request partial conversion of the seizure into a mortgage. This strategy involves obtaining a release from the seizure of certain assets in exchange for the registration of a judicial mortgage on them in favour of the debtor. This mortgage will rank on the date of publication of the summons to pay validating the seizure, thus providing a strong guarantee for the creditor, while freeing part of the debtor's assets from the enforcement procedure. The attachment procedure then continues only on the unconverted assets.
Grace periods and contesting abusive or unnecessary seizures
The debtor may apply to the enforcement judge for a period of grace, on the basis of article 1343-5 of the Civil Code. The judge may thus defer or stagger payment of the sums due, up to a maximum of two years, taking into account the debtor's situation and the creditor's needs. In addition, any enforcement measure must comply with the principle of proportionality. A seizure may be deemed abusive if it exceeds what is necessary to obtain payment of the debt. The fact that the debt is small is not in itself a sufficient reason, but if the debtor can show that there are less restrictive means (such as a seizure on a bank account that respects the unseizable bank balance) to pay off the debtor, he can contest the usefulness of the seizure. In addition to requests for time limits, an effective defence can be based on an analysis of the time limits for prescription in foreclosure, The creditor's right to take legal action may be extinguished.
The impact of over-indebtedness and collective proceedings on property seizures
The opening of a procedure to deal with the excessive debt of an individual or a collective procedure (safeguard, reorganisation or judicial liquidation) for a company has a radical effect: it suspends or prohibits any property seizure procedure in progress. The suspension of individual proceedings is one of the pillars of debtor protection, a rule that is part of the broader framework of civil enforcement procedures and their interaction with overindebtedness. This suspension is automatic as soon as the over-indebtedness application is accepted or the collective proceedings are opened. It gives the debtor time to restructure his debts under the aegis of the court, protected from individual action by his creditors.
The complexity of the obstacles to property seizure and the possible defence strategies often make it essential to be accompanied by an expert. expert in property seizures. Our team is at your disposal to devise the best defence strategy and protect your assets effectively.
Sources
- Code of civil enforcement procedures (in particular articles L. 111-7, L. 311-5, L. 311-6, L. 321-6)
- Civil Code (in particular Art. 815-17, 900-1, 1415, 2284)
- French Commercial Code (in particular Art. L. 526-1 to L. 526-22)
- Consumer Code (in particular Art. L. 722-2)
- Code général de la propriété des personnes publiques (article L. 2311-1) (French General Code of Public Ownership)
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