Order for payment and debt purchase

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An injunction to pay is an order to pay a debt. simplified debt recovery procedure. In some cases, these orders can be challenged at a very late stage. What happens if, between the time the order is made and the time it is contested, a claim is assigned?

Late opposition to an order for payment

La payment order procedure is a simplified debt recovery procedure. It involves obtaining an order for payment. This order has specific dispute procedures.

It can be contested within one month of service. However, if service is not made personally, it may be contested:

- within one month of the first personal service,
- or the first enforcement measure (seizure of accounts, furniture, etc.)

In practice, it is common for the first personal service to take place several years after the order was obtained. The oldest case we handled involved an order that was 28 years old at the time of the opposition!

See also : Order for payment procedure

This may seem surprising at first, but it is quite common. It is generally the result of one or more assignments of receivables.

See also : Litigious withdrawal and assignment of debt: how will it work in 2024?

Assignment of receivables is a mechanism whereby a credit institution assigns a portfolio of receivables. These receivables are generally sold to a collection agency or a securitisation fund. These funds are stock market investments that allow investors to speculate on debt recovery.

When these mechanisms are implemented, claims that have been lying dormant for years can be collection discounts by the organisations that bought them.

This begs the question: what interference is there with the disputed right of withdrawal ?

Opposition and contentious withdrawal rights

Article 1699 of the Civil Code states:

"The person against whom a litigious right has been assigned may be held harmless by the assignee, by reimbursing him for the actual price of the assignment together with the expenses and fair costs, and with interest from the day on which the assignee has paid the price of the assignment made to him.

The claim that was disputed at the time of its assignment may be repurchased from the assignee at its repurchase price. This repurchase price represents only a fraction of the amount of the claim.

A claim is disputed when it is the subject of legal proceedings at the time of its assignment.

Where an order for payment is concerned, it is quite common for the debtor to be completely unaware of the existence of the order. If the order has not been served personally and has never been enforced, the debtor has every reason to be unaware of it.

This means that, technically, he could not have contested it at the time of the transfer.

Is this a valid reason to deprive him of the right to buy back this debt?

The Court of Cassation's unambiguous answer is yes. Its First Civil Chamber, in a decision dated 6 September 2017 (no. 15-23.722), tells us in effect that:

"Whereas, in order to recognise Mrs X's right to withdraw on the basis of article 1699 of the Civil Code, the judgment held that, as it had not been served on anyone before the assignment of the claim, the order for payment could subsequently be opposed, so that it did not constitute a title definitively fixing the claim and that, on the date of the assignment, the company's right was in dispute;

 In so ruling, even though, according to its own findings, the assigned right had not been the subject of any substantive dispute prior to the assignment, the Court of Appeal violated the aforementioned text;".

The Court of Cassation interpreted articles 1699 to 1701 of the Civil Code strictly. On the merits, it considers that the right of withdrawal at issue is a derogatory right that can only be applied on an exceptional basis.

We can only regret it: over the years, debt collection has become a speculative business. This is particularly true of securitisation funds, whose sole rationale is yield. The result is that debt collection techniques have been hijacked for purely commercial and economic purposes. If you have any questions about these complex procedures and the protection of your rights as a debtor, do not hesitate to consult a lawyer specialising in debt collection.

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