Attachment of receivables is an essential legal procedure for creditors seeking to secure the recovery of their debt. It makes a sum of money owed to your debtor by a third party, such as a bank or a customer, unavailable even before a final court decision. However, this preventive measure is subject to precise formalities, from the moment it is triggered to its conversion into a definitive seizure, known as attachment for payment. The complexity of these stages and the strict deadlines to be met make it essential to master the procedure perfectly. When faced with a debtor who is planning to become insolvent, protective attachment is often the most effective way of safeguarding your rights while you wait to obtain a writ of execution. The assistance of a professional is crucial to the success of this procedure; support from a lawyer with expertise in enforcement procedures and protective attachments ensures that your interests are safeguarded.
What is preventive attachment of debts?
Definition and fundamental principles
Attachment of receivables is a preventive measure that allows a creditor to "freeze" a sum of money held by a third party on behalf of the debtor. The aim is to prevent the debtor from making the sum disappear while the creditor takes steps to obtain a judgment. Unlike compulsory enforcement measures, it can be implemented without first obtaining an enforcement order. A simple authorisation from the judge, obtained on application, or the possession of a document such as an unpaid bill of exchange or a written lease contract, may be enough to trigger it.
This procedure is a form of judicial securityThis is because it gives the creditor a preferential right over the sum seized. If successful, it results in the seizing creditor being awarded the claim exclusively, giving him priority over other creditors of the same debtor.
Distinction from other types of seizure and particularities of claims
The seizure of receivables is fundamentally different from other seizure procedures. Unlike seizure for sale, which concerns tangible movable property with a view to selling it at auction, the protective seizure of debts concerns intangible property: a sum of money owed to the debtor. Its purpose is not sale, but direct payment to the creditor after conversion.
It must also be distinguished from attachment for payment, which is its purpose. Attachment is an enforcement measure that presupposes the existence of a writ of execution. It effects the definitive transfer of ownership of the debt to the creditor. The protective attachment is therefore only a preliminary step, a temporary guarantee, which does not in itself transfer ownership but simply makes the sum unavailable.
International and European legal framework
The rules governing the precautionary seizure of debts apply mainly under domestic law. For debt recovery within the European Union, specific instruments have been put in place. The most notable is Regulation (EU) No 655/2014, which created a European order for the precautionary seizure of bank accounts (ECSO) procedure. This mechanism, which came into force in 2017, greatly facilitates cross-border debt collection by making it possible to block a debtor's bank accounts in another Member State on the basis of a single decision, without going through each country's national procedures. Without this regulation, a French judge would not be able to authorise a measure on an account held in Germany, for example.
In the international context, particularly in common law countries, we also come across "Mareva" injunctions. These measures, which originated in English case law, are designed to prevent a debtor from disposing of his assets in order to organise his insolvency. They do not result in the legal unavailability of assets like a French seizure, but in a personal prohibition on the debtor, subject to penalties. The French Court of Cassation has ruled that these injunctions and French attachment orders are not incompatible and may be combined, as they do not have the same purpose.
Operations for the implementation of the precautionary seizure of debts
Service of the document on the garnishee
The procedure begins with a court order served directly on the garnishee, i.e. the person or entity that owes money to your debtor (e.g. the debtor's bank). This deed must contain certain information that is mandatory under penalty of nullity, such as identification of the debtor, the title or judicial authorisation on which the seizure is based, and a precise breakdown of the sums claimed. It is crucial to note that it is not necessary to attach a copy of the deed to the garnishee; the latter does not have to judge its validity. The deed also serves as a summons: the garnishee must immediately declare to the court commissioner the extent of his obligations towards the debtor and hand over the supporting documents. In particular, the garnishee must point out the existence of any other seizures or prior assignments of claims. Failure to comply with this reporting obligation, in the absence of a legitimate reason, exposes the third party to severe penalties, including being ordered to pay the creditor's debt himself.
Disputes about the third party's declaration are possible, but must be raised before the act of conversion into an attachment for payment. After this stage, the declaration is deemed to be accurate. This initial phase is comparable to other measures such as the protective pledge of shares and securitieswhere a third party (the company) is also notified.
Informing the debtor of the seizure
Once the seizure has been effected with the third party, the creditor has a mandatory period of eight days in which to notify the debtor. This notification, made by a court commissioner, is an essential formality, and failure to do so renders the seizure null and void, i.e. retroactively cancelled. Once again, the notice of seizure must contain compulsory information to inform the debtor of his rights. It must include a copy of the title or order authorising the seizure, a copy of the seizure report, and inform the debtor, in very clear characters, of his right to contest the measure before the enforcement judge of his place of residence. In the case of a bank account seizure, the document must specify the amount of the maintenance sum (equivalent to the RSA) that must be left at the debtor's disposal. In the case of a joint account, the notice of seizure must be sent to each joint account holder to enable them to assert their rights to the funds.
The appointment and role of the receiver
The unavailability of funds can be detrimental to the garnishee, particularly if its debt to the debtor earns interest. To avoid bearing this burden, article R. 523-2 of the Code of Civil Enforcement Procedures allows any interested party (most often the garnishee) to request that the sums seized be deposited in the hands of a receiver. In the absence of an amicable agreement, the receiver is appointed by the enforcement judge on simple request. The main effect of this deposit is to stop the interest owed by the third party. In principle, the actual payment of funds to the receiver remains voluntary at this stage; compulsory execution against the third party to compel it to do so could only take place after the seizure has been converted. In theory, therefore, the judge cannot refuse to appoint a receiver if the request is justified.
The legal effects of the precautionary seizure of debts: the special assignment privilege
Nature and scope of the special allocation
The main effect of the protective attachment of receivables, as defined by article L. 523-1 of the Code of Civil Enforcement Procedures, is to confer on the attaching creditor a specific lien on the sum made unavailable. This privilege, referred to as a special assignment, is treated by law as having the same effects as a pledge. In practical terms, the sum seized is isolated and secured for the exclusive benefit of the seizing creditor, pending conversion of the measure. The funds are considered to be consigned ipso jure, which ensures that this judicial "pledge" is enforceable. This protection continues until the act of conversion, at which point the preferential right is transformed into a right of ownership over the claim.
Enforceability of the lien against other creditors
This special assignment privilege plays a decisive role in the event of competition with other creditors of the same debtor. With regard to unsecured creditors (those who have no special security), the distrainor's preferential right is total. If an unsecured creditor attempts a distraint on the same claim, his distraint will only relate to a claim that is already subject to a pledge, and he cannot be paid until the first distrainor has been fully paid.
The situation is more complex in the case of creditors with a higher-ranking lien, such as certain tax liens (direct taxation, VAT, etc.). In theory, a conflict of liens could allow a higher-ranking creditor to take precedence over the seizing creditor. However, converting a protective attachment into an attachment for payment transfers ownership of the claim, which, if done in good time, can purge the claim of these potential conflicts. The anteriority of the seizure, established by the date of service on the garnishee, is therefore a key factor.
Enforceability against assignees of the seized claim
The seized debtor remains the owner of his claim as long as the conversion into an attachment for payment has not taken place. In theory, therefore, he can assign it to a third party. However, the special assignment privilege may be enforced against the assignee, provided that the seizure predates the assignment. The date on which this occurs depends on the formalities of the assignment. For a standard assignment of a civil or commercial claim (subject to article 1690 of the Civil Code), it is the date of notification of the assignment to the debtor (the garnishee) that is compared with the date of the seizure. If the seizure was served on the third party before notification of the assignment, the creditor's lien prevails. Specific rules apply to other mechanisms such as Dailly assignment or factoring, where the date of perfection may be different.
Impact and fate of protective attachment in the event of receivership or compulsory liquidation proceedings
This is where the main vulnerability of the protective attachment lies. The Court of Cassation has consistently ruled that the occurrence of a judgement opening receivership or liquidation proceedings against the debtor puts an end to the protective attachment and retroactively annuls the special assignment privilege attached to it. In other words, if the seizure has not been converted into an attachment for payment before the opening judgment, the seizing creditor loses his preferential right and reverts to being a simple unsecured creditor, obliged to declare his claim to the insolvency proceedings. The sums, even if they have been segregated in a special account by the garnishee, are reintegrated into the debtor's assets. This rule illustrates the fragility of the measure and the importance of swift action to obtain a writ of execution and carry out the conversion. The link with the effectiveness of securities in insolvency proceedings is direct and crucial here.
Conversion of a protective attachment into an attachment for payment
Terms and conditions of conversion
Once the creditor has obtained a writ of execution recording his claim, he can convert the protective attachment into a definitive enforcement measure: attachment for payment. This is done by means of a conversion deed served by a court commissioner. The law imposes no time limit for this conversion, but it is in the creditor's interest to act as quickly as possible, in particular to avoid the consequences of any insolvency proceedings. The conversion deed is first served on the garnishee. This document must contain mandatory information, such as a reference to the report of the protective attachment, a statement of the enforcement order obtained, the final statement of the sums due and a request for payment. Above all, it must state that this request results in the immediate allocation of the seized debt to the creditor. A copy of this conversion deed must then be served on the debtor, without any time limit imposed by law, but this notification is essential as it starts the period for contesting the deed.
The procedure for contesting the conversion deed by the debtor
From the date of service of the conversion deed, the debtor has fifteen days in which to contest it. This challenge must be brought before the enforcement judge in the debtor's place of residence. The challenge is made by writ of summons, which must be served on the same day on the court commissioner who carried out the seizure. This final recourse allows the debtor to contest the legality of the conversion procedure, as well as the final statement of the sums owed (interest, costs, advance payments, etc.). Once this fifteen-day period has elapsed without any dispute, or if the debtor declares in writing that he does not wish to dispute, the creditor may demand payment.
The final effects of conversion
The main effect of the act of conversion is the immediate attribution of the claim to the seizing creditor. This is no longer a simple preferential right, but a genuine transfer of ownership: the claim is transferred from the debtor's assets to the creditor's assets. This attributive effect takes effect on the day the conversion deed is served on the garnishee. Actual payment, however, is deferred. The garnishee will only pay the creditor on presentation of a certificate of non-contestation issued by the registry after expiry of the fifteen-day period, or after the judgment rejecting the debtor's contestation. If the garnishee refuses to comply, the creditor can then obtain an enforcement order directly from the enforcement judge to force the garnishee to pay.
Jurisdiction of the enforcement judge and litigation issues
The role of the JEX in disputes relating to seizure and its conversion
The enforcement judge (JEX) is at the heart of the protective attachment procedure. He is competent to authorise the measure beforehand, when the creditor does not have a title exempting him from doing so. He is also the judge for all disputes that may arise during the procedure. This includes applications by the debtor for the seizure to be lifted if the conditions for validity are not met, disputes over the declaration of the garnishee, and disputes over the disproportionate nature of the measure. The JEX has extensive powers, being able to examine the merits of the law for the purposes of the seizure, for example by ruling on whether a claim is time-barred or whether a commitment is null and void. The court also rules on challenges to the conversion deed and, if the garnishee refuses to pay after conversion, may issue an enforcement order against the garnishee.
Penalties in the event of default and the liability of the garnishee
Failure to comply with the strict formalities of a protective attachment is severely penalised. Failure to notify the debtor of the seizure within the eight-day period renders the measure null and void, with retroactive effect. Similarly, the omission of compulsory information from seizure or notification documents may render them null and void, provided that the party invoking the omission proves the existence of a grievance. The garnishee is liable if it fails to fulfil its obligation to provide information. A failure to make a declaration or an inaccurate or untruthful declaration may result in the garnishee being ordered to pay the sums for which the seizure was carried out, or to pay damages to the creditor. However, this penalty cannot be imposed if the seizure itself is declared null and void or lapsed, as the third party cannot be held to an obligation arising from an invalid procedure.
Frequently asked questions about the attachment of receivables
What is the difference between a protective attachment and an attachment for payment?
Attachment is a preventive and temporary measure. It enables a creditor, often before obtaining a judgment, to make a debtor's claim unavailable to prevent the debtor from disposing of it. It "preserves" the assets. Attachment is a final enforcement measure that requires a writ of execution. It transfers ownership of the debt from the debtor to the creditor. It "allocates" the claim.
What documents are required for a protective attachment?
To carry out a precautionary seizure, a creditor must be in possession of either an authorisation from the enforcement judge or one of the documents that dispenses with this requirement. These documents are listed exhaustively in article L. 511-2 of the Code of Civil Enforcement Procedures and include: a writ of execution (even if not final), a court order that is not yet enforceable, an accepted and unpaid bill of exchange, a promissory note, an unpaid cheque, or a written lease for unpaid rent.
What happens if the garnishee does not respond to the request for information?
The garnishee is obliged to declare the extent of his debt to the debtor to the court commissioner immediately. If they fail to do so without a legitimate reason, or if they make a false declaration, they are liable to penalties. The enforcement judge may order the debtor to pay the sums owed to the distraining creditor, without prejudice to any subsequent recourse against the debtor. They may also be ordered to pay damages.
Does attachment apply to joint accounts?
Yes, a creditor can seize the entire credit balance of a joint account, even if the debt concerns only one of the joint account holders. However, the procedure requires the seizure to be notified to each account holder. The non-debtor co-holder can then contest the seizure before the enforcement judge to assert his or her rights to the funds and, if he or she can prove that all or part of the sums belong to him or her, obtain release of the seizure on his or her share.
What recourse does the debtor have after a protective attachment?
The debtor has a number of remedies. First of all, they can challenge the validity of the protective attachment itself by applying to the enforcement judge for it to be lifted, if they consider that the legal conditions (claim appearing to be well-founded, threat of recovery, etc.) have not been met. Later, after receiving notification of the conversion deed, the debtor has a period of fifteen days in which to contest the deed, particularly with regard to the final amount of the debt.
Does the opening of insolvency proceedings invalidate a protective attachment?
Yes, this is one of the major risks for the creditor. If safeguard, reorganisation or liquidation proceedings are opened against the debtor before the protective attachment has been converted into an attachment for payment, the attachment becomes null and void. The creditor then loses the privilege conferred by the attachment and must declare his claim to the proceedings as a simple unsecured creditor.
Attachment and conversion are powerful but technical tools, and their success depends on scrupulous compliance with a timetable and precise procedures. A mistake can wipe out the creditor's efforts and deprive him of his security. To secure your debt recovery and navigate these procedures effectively, our team is at your disposal for tailor-made support.
Sources
- Code of civil enforcement procedures
- Commercial code
- Civil Code
- Code of judicial organisation
- Regulation (EU) No 655/2014 of 15 May 2014 creating a European order for the precautionary attachment of bank accounts
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