Enforcement proceedings

What are enforcement proceedings?

Enforcement proceedings are a legal process that allows creditors to collect debts from a debtor who refuses to pay voluntarily. They use court-authorized measures to seize and liquidate the debtor's assets.

Steps in enforcement proceedings

1. Filing an application

The creditor submits an application to the competent court to initiate enforcement proceedings. For enforcement orders involving a court bailiff, the application is filed with the bailiff distribution office at the district court responsible for the debtor's residence. The application must include necessary documents, such as the enforceable title (e.g., enforcement notice) and, if applicable, a garnishment and transfer order.

2. Court bailiff

The court assigns a bailiff to carry out enforcement actions. The bailiff can seize and auction movable assets belonging to the debtor, such as valuables or property, to fulfill the creditor’s claim.

3. Garnishment and transfer order

For seizing the debtor’s financial claims, such as wages or bank balances, the creditor must apply for a garnishment and transfer order. This allows direct access to the debtor's assets:

• Wage garnishment: A portion of the debtor’s income is withheld and transferred to the creditor.

• Bank account garnishment: Funds in the debtor’s account are frozen and used to settle the debt.

4. Requirements for claims exceeding €5,000

For claims over €5,000, the creditor must present the original enforceable title. Without the original document, enforcement actions cannot proceed.

5. Execution of enforcement measures

Once all necessary documents and approvals are in place, the bailiff implements the enforcement measures. These actions depend on the type of assets available, such as movable property, financial claims, or real estate.

6. Conclusion of enforcement proceedings

Enforcement proceedings end when the creditor’s claim is fully satisfied or when no further recoverable assets are identified. If new assets are discovered later, the creditor can request additional enforcement measures.

Prerequisites for enforcement proceedings

1. Enforceable title:
   A legal document confirming the creditor's claim, such as a court judgment, enforcement notice, or notarized debt agreement.

2. Enforcement clause:
   This clause confirms that the title is enforceable and is typically issued by a court or notary. It often reads: “This is the enforceable copy.”

3. Proper delivery of the title:
   The enforceable title must have been formally served to the debtor by a court or bailiff before enforcement measures can begin.

4. Application to the court:
   The creditor must submit an application, including the enforceable title, enforcement clause, and proof of service to the debtor.

5. Garnishment and transfer order:
   Required to seize financial claims, such as wages or bank balances.

6. Bailiff assignment:
   The court appoints a bailiff to execute measures such as seizing assets or garnishing accounts.

7. Original title for claims over €5,000:
   The original enforceable title must be presented for claims exceeding €5,000.

Types of enforcement measures

1. Enforcement on movable property

The bailiff seizes and auctions items like furniture, electronics, vehicles, or jewelry to satisfy the debt.

2. Enforcement on real estate

This involves actions related to the debtor’s real property:

• Secured mortgage: A lien is registered in the land register, giving the creditor a legal claim on the property.

• Foreclosure: The property is auctioned publicly, and the proceeds are used to pay the debt.

• Seizure of an existing lien: The creditor can take over an existing property lien listed in the land register.

3. Enforcement on financial claims

The creditor targets the debtor’s financial resources, such as:

• Bank accounts: Funds are frozen and transferred to the creditor.

• Tax refunds: Claims against tax authorities, such as tax refunds, can be garnished.

• Wages: A portion of the debtor's salary is garnished and sent directly to the creditor.

Costs of enforcement proceedings

1. Bailiff fees

Bailiffs charge fees based on the type and scope of enforcement actions:

• Seizure fees: Fixed fees for seizing movable property.

• Auction fees: Costs for auctioning seized assets.

• Delivery fees: Costs for delivering documents like garnishment orders.

2. Court fees

Fees apply to garnishment orders, foreclosure procedures, or registering a secured mortgage.

3. Attorney fees

If the creditor hires an attorney, costs are based on the German Attorneys’ Fees Act (RVG) and the claim amount. Services may include preparing applications or representing the creditor in court.

4. Additional costs

• Address tracing fees: Costs for locating the debtor through agencies or private investigators.

• Appraisal fees: For evaluating property during foreclosure.

Who pays for enforcement proceedings?

• Debtor: All enforcement costs are added to the debt and charged to the debtor upon recovery.

• Creditor: Must advance the costs but can reclaim them if enforcement is successful.

Success factors for enforcement proceedings

1. Debtor’s financial situation:
   Success is higher if the debtor owns recoverable assets, such as property, bank accounts, or steady income.

2. Type of claim:
   Monetary claims (e.g., wages or bank balances) are often easier to recover than physical assets.

3. Debtor cooperation:
   A cooperative debtor simplifies and accelerates enforcement.

4. Economic conditions:
   The debtor’s financial stability and broader economic factors influence outcomes.

5. Thorough preparation:
   Detailed research into the debtor’s assets and a strategic approach to enforcement measures increase success rates.