Lawyer - Seizure of property

Faced with a defaulting debtor or one whose solvency appears uncertain, speed of action is often decisive for a creditor. Attachment is an essential preventive measure, enabling you to secure your rights by making your debtor's assets unavailable even before obtaining a final court decision. Our Marseille law firm, Solent Avocats, assists businesses and individuals in implementing these complex procedures, aimed at effectively protecting their financial interests before any debt collection action is taken.

Our firm, which has a recognised practice in commercial law, insolvency proceedings and enforcement, adopts a pragmatic and rigorous approach to protective measures. We are aware that each situation is unique and that an appropriate strategy is the key to preserving your assets. While we prefer to seek amicable solutions whenever possible, in line with our philosophy that "a bad agreement is better than a long trial", we do not hesitate to take the necessary precautionary measures with speed and determination when circumstances require. The complexity of protective seizures, the conditions under which they can be carried out and the strict deadlines require expertise that our firm can offer you. Our commitment is to provide you with a comprehensive overview of the stages of the procedure and the issues at stake.

Understanding protective attachment: a preventive measure to protect your debts

What is a protective attachment and when is it used?

Attachment is a legal procedure that allows a creditor to have certain assets belonging to the debtor placed under legal control. The aim is to prevent the debtor from selling, giving away or concealing the assets - in other words, to organise his insolvency - before the creditor has obtained a writ of execution, i.e. a court decision ordering payment. This intervention is therefore preventive in nature and is designed to guarantee effective recovery of the debt in the future. It is often an effective way of freezing a debtor's assets.

When should a precautionary seizure be considered?

Two main conditions, defined by the Code of Civil Enforcement Procedures, must generally be met before a protective measure can be taken:

• A claim that appears to be well-founded in principle: It is not necessary for the claim to be certain, liquid (accurately quantified) and due at the time the application for protective attachment is made. A mere appearance of right, a likelihood of the debt, may be enough for the judge, often the enforcement judge of the judicial court, to authorise the measure. The creditor then has a means of taking action, even before the case is heard on the merits.
• Circumstances likely to jeopardise recovery: The creditor must demonstrate and justify circumstances indicating a risk that his claim may not be recovered at a later date if the measure is not taken. This may result from the debtor's apparent insolvency, his behaviour (for example, if he starts to sell his assets to reduce the value of the seizable assets), or any other situation that threatens the recovery of the debt. Failure to respond to a formal notice may be an indication of this.

Warning signs justifying a seizure: when to react?

• Your debtor suddenly stops communicating with you despite your reminders.
• You learn that other creditors are experiencing payment difficulties with the same debtor.
• Credible information indicates a rapid deterioration in your debtor's financial situation (major losses, unannounced closure of business).
• Your debtor is starting to sell off major assets for no clear economic reason. In the face of such signals, a rapid legal analysis by an enforcement lawyer is recommended to assess the appropriateness of a protective measure.

What assets can be subject to seizure?

A preventive attachment may relate to a wide variety of movable property belonging to the debtor, whether tangible (material) or intangible (immaterial):

• Tangible assets: These may include furniture, vehicles (in this case, vehicles are seized), stocks of goods, business equipment or even cash.
• Claims: These are sums of money that third parties (called garnishees) owe your debtor. The most common example is the seizure of a bank account, but this can also involve rent that your debtor has to collect, or other sums owed to him.
• Shareholder rights and securities: company shares, stocks and bonds can also be made unavailable through this legal procedure.

It is important to note that immovable property (buildings, land) is not subject to seizure in the strict sense of the term. Instead, the recovery of a debt on such property is achieved by registering a judicial security (such as a provisional judicial mortgage), which is another form of protective measure. Seizure of property is a separate enforcement procedure that takes place after an enforceable title has been obtained. The debtor's property rights are directly affected.

The protective attachment procedure: the key stages with Solent Avocats

Judicial authorisation: when is it required?

In principle, in order to take protective measures, an authorisation to do so issued by the judge is required. The creditor must apply to the enforcement judge (JEX) for this order. The judge in the place where the debtor lives generally has jurisdiction. If the claim falls within the jurisdiction of the commercial court and no proceedings (or litigation) have yet been commenced, the president of that court may also grant this authorisation by means of an application to the judge.

However, the Code of Civil Enforcement Procedures exempts the creditor from this judicial authorisation in several situations:

• If you already have a writ of execution, even if it is not yet final (for example, a first instance judgment with provisional enforcement).
• If he is relying on a court decision that is not yet enforceable.
• In the event of non-payment of an accepted bill of exchange, promissory note or cheque returned unpaid.
• For unpaid rent resulting from a written property rental contract.

Our law firm analyses your situation to determine the most effective and safest course of action, and prepares the application to the judge if necessary, ensuring that the Code of Civil Procedure and the Code of Civil Enforcement Procedures are correctly applied.

The intervention of the court commissioner and seizures

A conservatory seizure is physically implemented by a judicial commissioner (formerly a bailiff) by means of a bailiff's deed. The procedure varies slightly depending on whether the assets are held by the debtor himself or by a third party:

• Service of the writ of seizure: If the seizure relates to receivables (e.g. a bank account) or movable property held by a third party (e.g. goods in a warehouse), the writ of seizure is first served on the seized third party. This document must contain compulsory information, on pain of nullity, such as precise identification of the debtor, the title or authorisation under which the seizure is being carried out, a breakdown of the sums claimed, and a prohibition on the third party disposing of the sums or property concerned.
• Notification to the debtor: Once the writ of attachment has been served on the third party (or the writ of attachment drawn up if the assets are with the debtor), the measure must be notified to the debtor himself. This notification to the debtor must be made by a court commissioner within a strict period of eight days, failing which the seizure will lapse (be cancelled). The notice of seizure must also include mandatory information, in particular informing the debtor of his right to contest the seizure.

Our law firm works in close collaboration with a network of competent judicial commissioners in Marseille and the surrounding area, ensuring that authorised or initiated protective measures are rigorously enforced.

Effects of seizure: unavailability of assets

The main and immediate effect of a protective attachment is to render the seized assets unavailable. This means that the debtor can no longer dispose of them freely: they cannot sell them, give them away or move them without authorisation, under penalty of criminal sanctions. The debtor's assets are thus partly frozen.

• For claims (protective attachment of claims): The act of seizure makes the claim unavailable in the hands of the seized third party (for example, the bank for a bank account) up to the amount for which the seizure is made. A particularly important effect is that the seizure of receivables confers on the seizing creditor a special lien on the sums seized, comparable to a right of pledge. This gives it priority over other unsecured creditors. However, this privilege may disappear if collective proceedings are opened against the debtor before the attachment has been converted into a final enforcement measure.

Attachment of a bank account: what are your rights and those of the debtor (unattachable bank balance)?

When a protective attachment is made on a bank account, the bank must declare the extent of its obligations towards the debtor. The account is blocked to the extent of the sums owed. However, the Code of Civil Enforcement Procedures protects the individual debtor by leaving a sum of money available for maintenance purposes, equivalent to the lump sum of the RSA for a single person (Solde Bancaire Insaisissable - SBI). This sum remains available on the account despite the seizure. The burden of proving that the funds belong to you can sometimes give rise to disputes. Our law firm can provide you with legal assistance in navigating these aspects.

From protective attachment to enforcement: converting the measure

Attachment is only a first step. Its purpose is to pave the way for compulsory enforcement, once the creditor has obtained a final court decision condemning the debtor.

Obtaining a writ of execution: an essential step

Unless the creditor was already in possession of a writ of execution (such as a judgement, even if it is not final, or one of the titles dispensing with the need for authorisation), it is imperative that, within one month of the execution of a protective attachment with the authorisation of the judge, the creditor initiates proceedings or completes the necessary formalities to obtain a writ of execution against the debtor. If this deadline is not met, the protective attachment becomes null and void, i.e. it loses all its effects retroactively. This is a separate legal action.

Our law firm, Solent Avocats, closely monitors these crucial deadlines and takes the appropriate action on the merits (summons for payment, provisional injunction if the conditions are met) to obtain the enforcement order needed to continue debt recovery.

The act of conversion: transforming the protective measure

Once the enforcement order has been obtained and served, the creditor can convert the protective attachment into a final enforcement order. This conversion transforms the protective attachment into an enforceable attachment.

• For a precautionary attachment of receivables: The conversion is made into an attachment for payment. The creditor serves a conversion deed on the garnishee (the bank, for example). This deed immediately allocates the seized debt to the creditor, up to the amount of the judgment.
• For a protective attachment of tangible movables : The conversion is made into an attachment for sale. The creditor serves the debtor with a conversion deed containing, in particular, an order to pay within eight days, failing which the seized goods will be sold.

The debtor's challenge to the conversion

Once the debtor has been served with the conversion deed, he has fifteen days to contest it before the enforcement judge in his place of residence. This challenge must be made on the same day by registered letter with acknowledgement of receipt to the court commissioner who carried out the seizure. If there is no objection within this time limit (or if the objection is rejected), the creditor can request payment from the garnishee (in the case of seizure of receivables) or continue with the sale (in the case of seizure of movables). This is a possible recourse.

Our law firm will represent you in the event of a dispute to assert your rights and pursue recovery.

Risks and points to watch out for in a protective attachment procedure

While seizure is a powerful tool, there are a number of points to bear in mind when implementing it, as well as the risks of seizure, which need to be kept under control.

Seizure of property not belonging to the debtor

It is imperative that the protective seizure relates only to assets that actually belong to the debtor in question. A seizure carried out on assets that do not belong to the debtor is null and void, as are any subsequent conversion measures. This underlines the importance of accurately identifying the debtor's assets before initiating the measure. Our law firm carries out the necessary checks to minimise this risk.

Impact of collective proceedings (safeguard, receivership, compulsory liquidation)

The opening of collective proceedings (safeguard, reorganisation or judicial liquidation) against the debtor has major consequences for ongoing protective attachments. In the case of seizures of receivables, if the garnishee has not been notified of the conversion to an attachment for payment before the opening judgment, the special assignment privilege conferred on the creditor by the protective seizure disappears. The protective attachment is therefore deprived of its main effectiveness. Similarly, a protective attachment of tangible movables can no longer be converted into an attachment for sale after the opening judgment if the goods have not yet been sold. This type of dispute requires specialised expertise.

Our expertise in insolvency proceedings, an area that often touches on business law, is an asset when it comes to anticipating these situations and advising you on the best strategy if your debtor is in difficulty.

Penalties for abusive or unjustified seizures

A creditor who implements a protective attachment improperly, or if the conditions for validity are not (or are no longer) met, is liable to have the debtor apply to the court for the attachment to be lifted. This is the debtor's right to contest the seizure. What's more, if the seizure is deemed to be unjustified and has caused harm to the debtor (damage to reputation, unjustified freezing of funds, etc.), the creditor may be ordered to pay damages. An attachment that is disproportionate to the debt may also be contested.