Methods of execution

The law of guarantees, securities and civil enforcement procedures is a branch of civil law devoted to securing transactions and enforcing obligations.

The distinction between guarantees and securities

The terms "guarantee" and "security" are often used interchangeably, but they have distinct meanings in law. Understanding this distinction is crucial to understanding creditor protection mechanisms.

Definition of guarantees

A guarantee is a general means by which an obligation is secured. It includes not only security interests, but also other forms of creditor protection that do not necessarily qualify as security interests in the strict sense of civil law.

Guarantees may be contractual (such as a retention of title clause) or legal (such as certain forms of lien).

Definition of security interests

Securities are specific legal mechanisms that protect a creditor against the risk of non-payment of a debt. They allow one or more assets to be assigned as security for the debt.

Securities may be personal or real. Securities are personal where a person other than the principal debtor undertakes to perform the obligation. Securities are real where an asset is used to secure the debt.

Key differences

Scope: Guarantees encompass all forms of securing receivables, including collateral. Collateral, on the other hand, is a specific category of guarantee.
Nature : security interests are characterised by their assignment to an asset or to the personal liability of a third party, whereas guarantees may include more varied contractual or legal arrangements.
Advertising : security interests, unlike certain guarantees, often require publication in order to be enforceable against third parties.
Execution: security interests generally offer a preferential right over an asset or the possibility of recourse against a third party, whereas guarantees can offer more diversified enforcement mechanisms.

Securities

Securities play an essential role in civil law, providing creditors with effective means of securing their claims. They are divided into two main categories personal sureties and security interests.

The definition and importance of security interests

Securities provide creditors with protection against the risk of non-payment. They provide the creditor with a means of repayment in the event of the debtor's default.

The importance of collateral lies in its ability to secure economic transactions. By giving creditors the assurance that they will be able to recover their debt, they enable them to lend money. This makes commercial and financial exchanges more fluid.

Personal sureties

Personal sureties involve an undertaking by a person other than the principal debtor to perform the obligation in the event of the latter's default. The main personal sureties are :

Le surety bond Guarantee: this is an undertaking by a person (the guarantor) to pay the principal debtor's debt if the latter defaults. The guarantee may be simple or joint and several. If the guarantee is simple, the creditor must first sue the debtor. If the guarantee is joint and several, the creditor can sue the guarantor at the same time as the principal debtor.
La stand-alone guarantee First demand guarantee: also known as a first demand guarantee. It obliges the guarantor to pay a sum of money to the creditor on first demand. The creditor does not have to prove that the principal debtor has defaulted.

Security interests

Collateral security gives the creditor a direct right over a specific asset belonging to the debtor or a third party. The main types of security are :

The mortgage : This is a guarantee taken out on a property. It enables the creditor to sell the property if the debtor defaults, in order to be reimbursed from the sale price. A conventional mortgage requires a notarial deed and an entry in the mortgage register.
The pledge : This is a security interest in tangible personal property, such as a vehicle or jewellery. The asset may be handed over to the creditor (possessory pledge) or left in the possession of the debtor (non-possessory pledge).
Collateral : This security relates to intangible personal property, such as a business, company shares or receivables. Pledging can also involve tangible assets without dispossession, such as stocks of goods.
The privilege: This is a right granted by law to certain creditors because of the nature of their claim. The lien gives them priority of payment over other creditors. For example, the Treasury's lien or the employee's lien for payment of wages.

Civil enforcement procedures

Civil enforcement procedures cover all the legal means that enable a creditor to force a debtor to fulfil his obligations, mainly the payment of sums of money. These procedures generally take place after a court decision has been made in favour of the creditor.

The definition

Civil enforcement procedures are the legal means available to creditors to force debtors to fulfil their obligations.

The main enforcement measures concern the payment of debts.

They are governed by the Code of Civil Enforcement Procedures and require a writ of execution, such as a court order, authenticated deed, etc.

Precautionary measures

Conservatory measures are provisional measures designed to preserve the creditor's rights even before an enforceable title is obtained. They are crucial in preventing the risk of dissipation of the debtor's assets.

Attachment of tangible movable property

Attachment allows the debtor's tangible assets to be seized in order to guarantee future payment of the debt. This measure must be authorised by the judge and is followed by definitive enforcement procedures once the writ of execution has been obtained.

Attachment of receivables

The seizure of debts enables the debtor's sums of money or debts held by a third party to be blocked. For example, the creditor can freeze the sums in the debtor's bank account to guarantee payment of his claim.

Attachment of shareholder rights and securities

This measure makes it possible to seize shareholders' rights or securities held by the debtor, thereby guaranteeing future payment of the debt. This seizure also requires the authorisation of the judge.

Seizure of assets placed in a safe deposit box

This measure allows the debtor's assets placed in a safe to be seized. It is particularly used for valuable items such as jewellery.

Provisional judicial mortgage

A provisional judicial mortgage allows a debtor's property to be encumbered as security for a debt before a writ of execution has been obtained. It is authorised by the judge and guarantees payment of the debt in the event of successful legal action.

Movable property enforcement measures

Movable assets can be seized and sold to pay off the creditor.

Seizure and sale

Seizure and sale involves seizing the debtor's tangible assets and selling them at public auction. The proceeds of the sale are used to repay the creditor.

Attachment

Attachment allows debts held by the debtor, such as sums of money in a bank account, to be seized directly. The creditor becomes the owner of the seized debt and can pay himself directly from it.

Attachment of earnings

Attachment of earnings allows part of the debtor's salary to be seized. The creditor must obtain the judge's authorisation. Attachment is limited to a certain percentage of the salary, to ensure that the debtor has enough to meet his or her basic needs.

Foreclosure

The seizure of real estate concerns the debtor's property and enables the creditor to recover its debt by selling the property.

The procedure begins with the service of a summons to pay equivalent to a seizure. The case is then dealt with under the supervision of the enforcement judge, who may authorise an out-of-court sale or order an auction.

The proceeds of the sale are then distributed to preferential and hypothecary creditors according to their ranking.

Enforcement actors

Several players are involved in civil enforcement procedures, each playing a specific role in ensuring the effectiveness and legality of enforcement measures.

The enforcement judge

The enforcement judge is responsible for authorising and supervising enforcement measures. He intervenes to ensure that the rights of the parties are respected and that the procedures are legal.

The judicial officer (commissaire de justice)

Judicial officers, now known as commissioners, are responsible for implementing enforcement measures. He serves documents and carries out seizures and sales.

The lawyer

Lawyers represent and advise parties in enforcement proceedings. He defends his client's interests, prepares applications and pleads before the enforcement judge.

Conclusion

The law of guarantees, sureties and civil enforcement procedures is a complex and fundamental area of civil law. Guarantees and securities offer a variety of mechanisms for securing claims and protecting creditors against the risk of non-payment. Civil enforcement procedures make it possible to implement these guarantees and securities, thereby ensuring the efficiency and security of economic transactions. Mastery of these legal tools is essential for legal professionals and economic players, guaranteeing the fluidity and security of commercial and financial exchanges.