Seizure and enforcement

Legislation concerning seizure and enforcement is laid down in seizure and enforcement law. Seizing a debtor’s assets is fairly simple and quick in the Netherlands. In the event of an unpaid claim, the creditor may consider seizing bank accounts, inventory, stock or even the debtor’s customers.

There are legally established procedures in force regarding seizure and enforcement. For a number of (possible) steps, it is necessary to engage a solicitor.

Unpaid bill

If a debtor fails to pay and the creditor wishes to take action, the claim can be submitted to the court. Prior to such legal proceedings, it is possible to seize the debtor’s assets. Seizure is part of attachment law. A solicitor must submit the request to the court. The court assesses the request and may then grant leave (permission) to seize the assets. Only when legal proceedings have taken place and the debtor still refuses to pay will the enforcement seizure commence.

Prejudgment attachment

In the case of prejudgment attachment, assets are “frozen” until the court has ruled on the collection of the claim. If the prejudgment attachment is successful, the creditor is assured that there are still recourse options available from the debtor if a favourable judgment is handed down. The bank balances, immovable assets and movable property subject to the prejudgment attachment remain available to the creditor. This ensures that the claim can actually be collected after the court has ruled in favour of the creditor. This attachment can be imposed on the debtor’s entire assets.

An additional advantage of imposing a prejudgment attachment is that the debtor immediately loses access to the attached property. For example, if bank accounts are attached, the debtor can no longer access their money, and if movable property is seized, the debtor can no longer access this property. In some cases, this alone will prompt the debtor to pay. In that case, the attachment more or less forces the debtor to proceed with full payment, which immediately resolves the dispute.

The procedure

To impose a prejudgment attachment, a petition must be submitted to the court in the district where one or more of the items that the creditor wishes to attach are located or where one of the persons subject to the attachment resides. Such a petition can only be submitted by a solicitor.

The court will decide whether or not to grant leave to seize on the basis of the petition. A bailiff must be engaged to carry out the seizure itself. The bailiff performs a number of formal acts, after which he notifies the debtor in writing of the seizure. This written notification must be accompanied by the authorisation issued by the court, the petition and the writ of attachment.

What can be seized?

In principle, all of the debtor’s assets can be seized as a precautionary measure. For example, a house, car or bank account, but shares can also be seized. All of a debtor’s assets are subject to seizure. The claims that a debtor has against others also fall under the debtor’s assets. These others are also referred to as third parties.

Third-party attachment

Third-party attachment is also referred to as third-party seizure. This refers to all seizures that a bailiff imposes on a third party. Seizure is therefore imposed on someone who is not actually involved in the dispute between the creditor and the debtor. Nevertheless, this third party will have to comply with the bailiff’s instructions.

In the case of bank attachment, attachment is imposed on the claims that the debtor has with a bank. For example, if the debtor has an account with that bank with a positive balance. Attachment of someone’s bank account or other bank balances is therefore a form of third-party attachment. This is because the bank is not involved in the dispute between the creditor and the debtor.

Seizure of someone’s wages or benefits is also considered third-party seizure. This is referred to as wage garnishment. A debtor in paid employment is entitled to periodic wages from their employer on the basis of their employment contract. Because this claim also forms part of the debtor’s assets, a debtor can also seize it. The attachment is then made with the employer. As a result, the employer is not allowed to simply transfer the wages to his employee (taking into account, among other things, the attachment-free threshold).

Lifting the attachment

No appeal can be lodged against a seizure order issued by the preliminary relief judge. However, there are other options available to the debtor to have the attachment lifted. The debtor can initiate summary proceedings in which he requests the lifting of the attachment. Such proceedings can only be initiated by a solicitor.

Summary evidence of invalidity

In order to lift the attachment, the invalidity of the claim must be summarily proven. The person who, by means of summary proceedings, demands that the attachment be lifted must (briefly) demonstrate that the claim that the attaching party claims to have does not (or no longer) exist or, for example, has become time-barred.

Provision of security

Another method that is frequently used in practice is the provision of security. If security is provided for the creditor’s claim, for example by means of a bank guarantee, the court will rule that the attachment must be lifted. In that case, the security provided will replace the prejudgment attachment.

Creditor ruled against

If the attaching party (creditor) is ultimately ruled against by the court, the prejudgment attachment will be lifted. The goods that were attached will then be returned to the alleged debtor. In some cases, the damage suffered by the alleged debtor as a result of the wrongful attachment can be recovered from the attaching party.

Enforceable attachment

If legal proceedings have already been conducted and the debtor has been ordered to pay, but this is not complied with voluntarily, the debtor has the option of applying for an executory attachment. This is referred to as the enforcement of the judgment, and the right of enforcement applies.

As with a protective attachment, only the bailiff can apply the attachment. However, unlike in the case of prejudgment attachment, enforcement attachment does not require prior authorisation from the court. Again, in principle, enforcement attachment can be imposed on all of the debtor’s assets. If prejudgment attachment has been imposed prior to the proceedings, this prejudgment attachment will automatically be converted into enforcement attachment.

If payment is not made, the bailiff will enforce the executory attachment. How this is done depends on what has been attached. In the case of a bank attachment, the bailiff will instruct the bank to pay him the money subject to the attachment. If the debtor’s home has been attached, the bailiff may, in consultation with the solicitor, sell the home at a public auction.

In the case of seizure of shares, the seizing party must request the court to set a term and conditions for the sale, after which the sale takes place publicly or privately. All enforcement measures can, of course, take place without the debtor’s consent.

International seizure: European Account Preservation Order

Nowadays, it is easier to seize foreign bank accounts within the European Union. This can be done by means of a European Account Preservation Order. The Account Preservation Order is an EU regulation, which all Member States – with the exception of Denmark and the United Kingdom – have had to adapt their legislation to.

The order applies if you want to seize, for example, the account or assets of a foreign customer (precautionary seizure). A creditor from the Netherlands can submit the request for a protective attachment to the preliminary relief judge in their own country. After the request has been assessed, the judge will determine the amount that may be attached. It is important to note that strict conditions apply to a European attachment order and that high standards are set for proving that the attachment is necessary.

This new regulation, which applies in addition to the procedures for seizure and enforcement in EU Member States, makes international seizure easier and less time-consuming and costly. In addition, Fruytier Lawyers in Business is part of Lawyers Associated Worldwide, an international network of law firms. With regard to international attachment, we can – if necessary – collect claims quickly and efficiently with the help of our LAW partners.

Frequently asked questions

What is the difference between prejudgment attachment and executory attachment?

In disputes over monetary claims, it is important to know which attachment measure you can use and when. Pre-judgment attachment is a provisional measure: it is imposed before a court ruling, to prevent a debtor from siphoning off their assets. Examples include freezing a bank account or blocking the sale of a property. Only after a positive judgment can this seizure be “converted” into an enforcement order. This is the moment when the sale or collection can actually take place. The latter is therefore the means of enforcement with which the bailiff executes the judgment.

Advice: are you considering seizure? Make sure you have a good assessment of the recovery options and coordinate your timing strategically with a solicitor. This will help you avoid unnecessary costs or procedural missteps.

What should I do if I want to apply for a European order for the attachment of assets?

Are you an entrepreneur who wants to secure a claim against a debtor in another EU Member State (except Denmark)? If so, you can use the European order for the attachment of assets (EBB). This is a powerful tool for freezing your foreign debtor’s bank accounts without prior warning. The procedure begins with the submission of a request to the competent court in your country (usually where the main proceedings are taking place). You must substantiate that your claim is urgent and sufficiently plausible. The EEB is intended for cross-border cases, so one of the parties must be established in a Member State other than the court where you are submitting the request.

Note 1: the preservation order is granted without the other party being heard, but you must commence the main proceedings within 14 days of the preservation order being granted.

Note 2: An important difference with Dutch prejudgment attachment is that, in the case of an EAPO, the creditor must provide security to prevent abuse of the procedure; for example, an amount equal to 10% of the claim is often required as security.

Consult a solicitor at an early stage, especially if you suspect that a foreign debtor is attempting to conceal assets. A well-founded request and strategic timing can make all the difference.

Specialised in attachment and enforcement law

The solicitors at Fruytier Lawyers in Business specialise in attachment and enforcement law. As your partner, we can use our knowledge and experience to advise you on the steps to take when your debtor fails to pay and you want to seize assets, or when your assets have been seized. Would you like to know more about your options regarding seizure and enforcement? Please feel free to contact our solicitors specialising in commercial law.

Authors: Corporate law lawyers Mignon de Vries and Myrddin van Westendorp