Enforcement and garnishment

• Garnishment of personal property: Execution of the debtor's personal movable property is possible. A bailiff is responsible to effect the garnishment and must be assigned by the creditor or his attorney.
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  In addition to the garnishment the debtor will be asked to give information on his income and property conditions. In case that the debtor refuses to give this information it is possible to induce an affirmation in lieu of an oath.
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• Execution of claims: Execution of claims and demands is also a possibility. .
  - Garnishment of wages
  - Garnishment of bank account
  - Garnishment of benefits
  - Garnishment of life insurance claims
  - Garnishment of tax refund claims
  - Garnishment of allowance claims 
  - Garnishment of shares in a company
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  The competent enforcement court is the local court where the debtor resides/where the company has its administrative centre. The creditor must state that he not only has an own claim but also another claim against a certain third party.
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• Execution of immovable property: It is also possible to execute immovable property (e.g. realties). A difference must be made between execution of private realties and business realties. Whether execution of property is efficient or not differs from case to case (determining factors are size, condition, possible existing mortgages and many more). It is mostly necessary to get legal assistance.

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By recording a judgment lien. This means that the creditor registers a mortgage in the land register for the realty in question. By this, the creditor obtains a certain rank. Sign up is thus done on a first come first served basis with regard to the settlement of claims.  

The conditions for recording a judgment lien are the following:  

• title, clause, delivery
• minimum amount of the claim: € 750 (including interest but not including costs)
• the application must be addressed to the land registry where the realty in question is located  
• Important: In case that the debtor has more than one realty it is not possible that the creditor records the full amount of the title on all of the realties. The creditor must either register the full amount on only one realty or distribute the amount over several realties. At this it is important that all of the realties are registered in the land register.

Application for compulsory auction of the realty. The creditor then obtains a certain rank through the confiscation. The conditions for a compulsory auction are the following:

• title, clause, delivery
• minimum amount of the claim: € 750 (including interest but not including costs)
• the application must be addressed to the land registry where the realty in question is located  
• an application for compulsory auction can be made for several realties at the same time, e.g. for realties that are registered on the same page of the land register. 

Application for forced administration. This means that the creditor enforces the delivery of the rents of the real estate (e.g. rent, crop yields of agricultural land). The conditions for forced administration are the following:  

• title, clause, delivery 
• minimum amount of the claim: € 750 (including interest but not including costs) 
• the application must be addressed to the land registry where the realty in question is located

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Important: In case that the creditor does not have any information over the debtor's assets (How to obtain information on the debtor's property), an application of enforcement is necessary because the  document certifying the exemption from seizure is a necessary precondition for an affirmation in lieu of an oath. Furthermore it must be kept in mind that mostly no substantial amounts can be expected from a garnishment of personal (movable) property.  If it concerns a large claim costs can be avoided through placing the order to enforce only with regard to a part of the claim amount (i.e. € 2500)

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The creditor should try to get as much information as possible on claims which the debtor might have. Therefore, it might be necessary to call the debtor or third party debtors before garnishment takes place (How to obtain information on the debtor's property).

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A judgment lien can be obtained in order to obtain the best rank on the property (in case that the first rank is still available).  In addition to obtaining a judgment lien another promising enforcement measure should be initiated, for example a garnishment of wages.

If the creditor (who already obtained a judgment lien) wants to act against the debtor, the title (on which there is a note that a judgment lien has been obtained) will form the basis of the application for compulsory auction. It is necessary to file this application. In case that the debtor owns two realties and does not know the property value it is advisable to apply for compulsory auction for only one of the realties (and thus to obtain a judgment lien for the other one).

To apply for forced administration is only advisable with regard to immovable property which produces substantial revenues. If the debtor lives in a one-family house or freehold flat forced administration is not rewarding since this belongs to the debtor's essential property.

However, forced administration can be profitable in case of dilapidation of the property even when no substantial revenues are produced. Forced administration would then prevent obsolescence or compensate for obsolescence and could serve as a preparation for a possible forced sale in which the property is sold for a reasonable price.

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If the debtor is not willing to give information on income- and property conditions during a garnishment of personal property, the debtor can be forced to provide information about income and property conditions through  an affirmation in lieu of oath (list of assets).The list of assets can possibly give information that makes it possible to take further enforcement measures (e.g. information on the debtor's employer, information on a life insurance, information on account balance).

The debtor is also registered into the list of insolvent debtors of the responsible local court within the scope of the affirmation. Other creditors do also have the right to inspection of the given affirmation in lieu of an oath. An affirmation officially affirms that the debtor is neither willing to pay nor credit-worthy.

The debtor has the chance to avoid giving the affirmation by paying the outstanding demand of the creditor who applied for the affirmation.

Conditions for the affirmation in lieu of oath:

• An enforcement order or other title must have been delivered to the debtor
• A garnishment did not lead to a full settlements of the creditor’s claims, or 
• The creditor can assert that the claim cannot be settled through garnishment, or
• The debtor refuses a searching of the residence, or
• The bailiff fails to find the debtor at his or her residence despite advance notice

If these preconditions are fulfilled, the creditor is able to apply for an affirmation in lieu of oath to find out about further assets. The (already delivered) title of execution, the clause of execution, documents for  execution-costs that have occurred and documents on exemption from seizure must be enclosed. The application is normally combined with an application for garnishment of personal property, because the bailiff is responsible for this application.

All information is presented to the best of our knowledge. We assume no responsibility for its correctness!

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