How do I stop a property seizure? The tutorial

Many customers ask us how to stop a seizure of property. However, this is a difficult procedure to fight, and the answer to this question is not easy. There are a wide variety of situations, all of which call for different answers. There are, however, a few classics.

The benefits of a challenge

Debtors wishing to stop a property seizure should first ask themselves whether it is in their interest to do so. There are ways of remedying over-indebtedness. These include, of course, a referral to the Banque de France's over-indebtedness commission.

This is a key issue, as the over-indebtedness plan often includes an interest freeze. The seizure of property, on the other hand, does not freeze interest until 6 months after payment of the purchase price by the successful bidder (articles L. 334-1 and R. 334-3 of the Code of Civil Enforcement Procedures).

This means that blocking the seizure can delay the sale, and that this delay can considerably increase the amount of interest that will be due. This is why any dispute must be the subject of a careful risk analysis. The cost/benefit ratio must be analysed and, if it is unfavourable, it is often preferable to opt for an amicable sale.

How do I stop a foreclosure?

The foreclosure procedure can only be initiated if certain conditions are met. These conditions are listed in Article L. 311-2 of the Code of Civil Enforcement Procedures :

Any creditor in possession of a writ of execution evidencing a claim that is due and payable may proceed with a seizure of property under the conditions laid down by this Book and by the provisions of Book I that do not conflict with it.

The creditor must therefore have a writ of execution (1) establishing a claim that is liquid (2) and due (3). A debtor wishing to stop a seizure of property must therefore analyse these points in turn.

Each of these points would merit a study in its own right, but a few broad outlines can nevertheless be identified.

Enforcement order

The various enforceable titles are described at Article L. 111-3 of the Code of Civil Enforcement Procedures. The most common enforcement instruments are, of course, court judgments and notarial deeds.

Court rulings can be used to initiate a seizure. However, they must have become res judicata before the forced sale can take place. A decision that has become res judicata is a decision that can no longer be contested. Such a decision leaves the debtor virtually no room for manoeuvre.

• Read also : Enforceable titles for seizure of property

Notarial deeds, on the other hand, can be widely contested. They are enforceable only under certain conditions.

Firstly, they must include an executory clause. This sacramental formula will then enable the creditor to instruct the bailiff to proceed with the recovery. The bailiff can then call on the assistance of the police.

Secondly, they must contain the information needed to calculate the amount owed. Generally speaking, they provide the bank with a writ of execution without having to initiate proceedings. In most cases, this will be a mortgage loan, subject to the provisions of the Consumer Code.

Compliance with the provisions of the Consumer Code relating to the type of credit can then be checked. In addition, any unfair terms can be criticised. This can quickly, if not hinder, at least slow down collection.

• Read also : ABUSIVE CLAUSES & ENFORCEMENT: what if it wasn't all over?

Liquid claims

A receivable is liquid when it is valued or can be valued. Article L. 111-6 of the Code of Civil Enforcement Procedures states:

A claim is liquid when it is valued in money or when the security contains all the elements required for its valuation.

The liquid nature of a claim resulting from a court decision can rarely be contested in order to stop a seizure of property.

The decision will always set out the amount of the claim and how it is to be updated (interest, indexation, etc.). If the decision is unclear, it may be the subject of a request for interpretation or rectification of a material error, as appropriate.

A claim arising from a notarial deed containing a loan, on the other hand, may be more widely contested. The deed must enable the claim to be assessed. This valuation is the result of a process. This process breaks down into several stages, all of which can be a source of error.

The most common problems in the valuation of claims depend on the nature of the claim.

First of all, the parties to the contract may stipulate a wide range of penalties for late payment. However, it is difficult for the legal and accounting professions to communicate with each other. When these terms and conditions are too complex, errors can creep into the deeds. These errors can render the calculations unsolvable and prevent an accurate assessment of the debt.

In the case of credit governed by the provisions of the Consumer Code, the calculation methods are set out in the text. However, the practice of banks and credit institutions is not always in line with the legislation. This is particularly true of the very common anatocism clauses, which can seriously affect the calculation of the sums required.

Until the Court of Cassation intervened, these clauses were almost always included in mortgage contracts. It is therefore a common mistake, which often justifies our intervention.

• Read also : The anatocism clause, or capitalisation of interest

Current receivables

Finally, the debt must be due and payable.

Once again, the fact that a claim is due and payable can only rarely be challenged in the presence of a court order. Two observations, however:

• To be enforceable, a court order must be served (article 503 of the code of civil procedure). Only decisions that are enforceable on a minute's notice can be enforced without having been served. This applies, for example, to a decision to approve a memorandum of understanding.
• When a decision is appealed, it does not become res judicata until the appeal procedure has been completed. This means that it is rarely in a creditor's interest to ask for his opponent's appeal to be struck out if he wishes to initiate a seizure of property.
  Removal from the register sanctions the appellant's failure to pay the sums for which he is liable under the judgment. As long as the case is struck out, it is not heard. This paralysis can last a long time. When it blocks collection, it can be detrimental to the creditor and beneficial to the debtor.

As far as notarial deeds are concerned, the concept of payability brings us back to the issue of forfeiture of the term. And this problem leads us back to the issue of unfair terms. This is where the Court of Cassation recently criticised the practices of credit institutions in this area.

A good knowledge of consumer law is therefore essential.

This is all the more true as the Court of Cassation has just considerably tightened up the conditions for accelerated repayment (Cass. 1re civ., 22 March 2023, no. 21-16.044, published in the Bulletin). In particular, this must be preceded by a formal notice of default, and a reasonable repayment period must be set.

• See also : What is a forfeiture of term?