Attachment of a bank account is an enforcement measure that is often brutal. This blocking seizure puts you in a tricky situation, by freezing your funds beyond the unseizable bank balance (UBS). However, what happens when the judgment that allowed the seizure is itself subsequently set aside? This situation, far from being a textbook case, reverses the roles and gives the original debtor a right to restitution. However, recovery of sums wrongly paid is not automatic. It requires knowledge of specific procedural mechanisms, including counter-seizure-attribution, to restore the balance and ensure that the debtor is reimbursed. recover his money.
Cancellation of the enforcement order: the trigger for restitution proceedings
To initiate a compulsory enforcement measure such as an account seizure, a creditor must hold an enforceable title, usually a court order. However, this document is not always final. Before looking at the mechanisms of restitution, it is essential to understand how attachment works which initially allowed the funds to be frozen. Destroying this initial title is the cornerstone of any repayment process.
Grounds for and forms of cancellation of an enforcement order
An enforceable title can lose its validity for a number of reasons, usually as a result of an appeal. Cancellation of an enforcement order is often the result of a successful challenge, so it is useful to be aware of the main reasons for this. grounds for contesting an attachment order. The most common scenarios are as follows :
- Reversal on appeal : a first instance judgment, even if provisionally enforceable, can be completely overturned by a court of appeal. If the initial judgment ordered the debtor to pay, the appeal judgment can overturn this order.
- Cassation : an appeal decision may be quashed by the Cour de cassation. The effect of cassation is to remove the contested decision, and consequently the title on which the seizure was based.
- Opposition to an order for payment : an order for payment may become enforceable if the debtor does not lodge an objection within one month of service. However, if the order has not been served personally, opposition is still possible and, if successful, the order is cancelled.
In all cases, the disappearance of the writ of execution deprives the seizure-attribution of its legal basis, which triggers the obligation to put things right.
Principles of restoration of the debtor (art. L. 111-10 cpce)
Enforcement law is governed by a principle of balance. If a creditor can enforce even a provisional decision, he does so at his own risk. This is what thearticle L. 111-10 of the Code of Civil Enforcement Procedures. This text stipulates that if the title is subsequently amended, the original creditor "shall restore the debtor's rights in kind or by equivalent". The principle of restoring the debtor's rights is particularly essential in cases where the measure is a wrongful levy of executionThis means that the creditor is liable. In practical terms, this means that all the consequences of enforcement must be wiped out. How this restitution is implemented depends on one simple factor: have the seized funds already been paid to the creditor?
Voluntary or judicial discharge: when funds have not yet been paid out
The simplest scenario is where the enforcement order is cancelled before the garnishee, i.e. the bank, has paid the creditor. In this situation, the restitution procedure involves releasing the seizure, theact which puts an end to the freezing of funds in the bank account.
Effects of release and validation of prior acts
If release is granted, the seizure is deemed never to have existed ("non avenue"). The claim is deemed never to have left the debtor's assets. This retroactive effect has an important practical consequence: if other creditors had attempted to seize the same sums after the first seizure, or if the debtor had assigned his claim, these acts, which were initially ineffective, become valid. Discharge releases the claim and restores the chronological order of the rights of third parties.
Recourse to the enforcement judge in the event of non-compliance by the creditor
Following the cancellation of his title, the creditor is obliged to release the seizure. If he refuses to proceed with a release amicable or delays in doing so, the debtor is not helpless. They can refer the matter to the judge (JEX) to obtain a judicial release. It is important to note that this application is not subject to the one-month time limit for contesting the seizure itself. Case law considers that the cancellation of the title automatically entails release and recourse to the JEX, judge from judicial tribunal is only intended to formalise this consequence.
Counter-attachment: procedure for recovering unduly paid funds
The situation becomes more complicated when the garnishee has already paid the funds to the creditor. Simple release is no longer possible. The debtor, whose title has been cancelled, must then take the initiative to recover his money. The most direct and effective mechanism is "counter-seizure-attribution".
Conditions of exercise and nature of the debtor's enforcement order
The concept is simple: the roles are reversed. The original debtor becomes the restitution creditor. The former creditor becomes the debtor. To carry out a seizure, you need a writ of execution. What is it in this case? It is precisely the judgment or ruling that annulled the first writ of execution (the reversal of an appeal ruling, the cassation ruling, etc.). This new decision constitutes the legal basis that enables the original debtor to initiate enforcement proceedings to recover the sums owed to him.
Precision imperative: refer to the exact annulment decision
This is a fundamental point of procedure, and the source of many disputes. For the counter-attachment to be valid, the procès-verbal of seizure must refer to the exact court decision on which the right to restitution is based. An error, punishable in penalty of nullitycan be fatal to the proceedings. Case law is strict on this point. For example, if an appeal judgment ordering payment is overturned by the Court of Cassation, the enforceable title for restitution is the judgment of the Court of Cassation itself. It would be wrong to refer to the judgment of the referring Court of Appeal if it merely dismisses the creditor's initial claim without explicitly ordering restitution. Only the decision that annuls the initial title and creates the obligation to make restitution can validly form the basis of the counter-attachment. A irregularity on this point could invalidate the measure and waste precious time.
Operational procedures and deadlines for counter-seizure
Once the debtor has the right writ of execution, he or she appoints a judicial commissioner (formerly known as a "commissaire de justice"). bailiff) to initiate a counter-attachment. This takes place in the same way as a conventional attachment, but in favour of the original debtor. The court commissioner will serve a writ of attachment on the former creditor's bank in order to freeze the funds up to the amount to be returned, and will then send a copy of the writ of attachment to the debtor's bank.act of denunciation at seized debtor by registered letter with acknowledgement of receipt of receipt. With regard to time limits, the restitution action is not subject to the time limit for dispute the initial entry, either a months from of its whistleblowing. It is subject to the ten-year limitation period set out in article L. 111-4 of the French Code of Civil Enforcement Procedures for the enforcement of court-ordered enforceable titles, starting from the date on which the annulment decision became enforceable.
Comparison of remedies: counter-seizure vs. action for recovery of undue payments
While counter-attachment is the most direct tool, it is not the only one available. Action for recovery of undue payments also exists. Understanding the differences between them is essential if you are to choose the most appropriate strategy.
Recovery of undue payments: scope and conditions
The action for repayment of undue payment, based on the Civil Code, is a more general procedure that allows you to demand repayment of what has been paid without cause (an "undue payment"). When a seizure is cancelled, the payment made by the garnishee becomes retrospectively "undue". The debtor can therefore take conventional legal action to obtain a judgment ordering the former creditor to repay the sums. This action is, however, a procedure on the merits, a "legal action". legal potentially longer than an enforcement measure.
Selection criteria: which procedure to choose?
The choice between the two options depends on the situation:
- Counter-attachment is a means of enforcement. It is quick and effective because it is based on an existing enforcement order (the annulment decision). This is the preferred method when the aim is to obtain a cover where the former creditor's funds are located (for example, in a bank account). bank known).
- Action for recovery of undue payment is a legal action to obtain a new title. It is necessary if the annulment decision does not give a precise figure for the amount. liquid to be returned, or if complex questions of accounts between the parties need to be settled (end of a contract, etc.). solidarity from debtvalidity of a schedule of payment amicableetc.). This is a more cumbersome procedure, which can give rise to costs. costs and additional time, but sometimes essential to establish a clear restitution claim before it can be enforced.
In practice, the counter-seizure is often the solution the most direct, where the annulment decision is sufficient to establish a claim for restitution liquid and due.
Post-cancellation roles and responsibilities: debtor, bailiff and garnishee
The success of the handover depends on the diligence and thoroughness of everyone involved in the process. Each of them has specific obligations.
The debtor's and the bailiff's duty of care
The debtor who has obtained cancellation of the instrument must be proactive. It is up to the debtor to take the initiative in making restitution, by notifying the annulment decision and appointing a court-appointed representative if necessary. The main precaution is to ensure that the restitution order is valid. The court commissioner, for his part, has a duty to advise. He must check the formal validity of the title presented to him (the annulment decision) and ensure that the counter-seizure deed is drafted with the precision required to avoid any nullity.
The garnishee (bank) faced with the restitution claim
As a garnishee, the bank has an essential role to play. When it receives a release, it must release the funds to its customer. When it receives a counter-seizure deed, it must declare the assets of its customer (the original creditor) and freeze the sums requested. The bank is liable if it fails to comply with these obligations. For example, it must ensure that its customer has access to the unseizable bank balance (UBS)and not block funds by their very nature elusive like some benefitsa pension or a fraction of the salary. Similarly, if it pays the original creditor when it has been informed of the suspension or cancellation of the title, it could be forced to pay a second time, without prejudice to damages in the event of proven prejudice.
Tax and accounting implications of returning funds
The return of funds is not neutral from an accounting and tax point of view. For the debtor who recovers the sums, often by transferThe sum received is not taxable income. The sum received is not taxable income but the return of a capital sum. For the original creditor, who must repay, the transaction is analysed as the cancellation of previously recognised income. If the debt was written off, the repayment corrects the loss. For companies, these movements must be correctly recorded in the accounts, on the basis of the documents supporting documents (e.g: copy of the judgment, statement of account), to reflect the reality of the asset situation after the annulment of the judgment. debt.
Navigating the intricacies of restitution procedures following the cancellation of an enforcement order requires technical expertise. The complexity of the contesting the seizureof counter-seizure and restitution procedures often makes it essential to the assistance of a specialist lawyerexperienced in court competent (for example Paris), to secure your rights and guarantee the effective recovery of funds.
Sources
- Code of civil enforcement procedures
- Code of civil procedure
- Civil Code
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