An incorporeal movable is an asset that has no material existence. It is an intangible property (e.g. a sum of money, the shares in a company).

Incorporeal movables can be attached in various ways in France. The choice of the measure will in particular depend on the subject matter of the attachment (shareholder rights, pay, etc.).

The present file will deal with the attachment of funds held by third parties:

• the attachment of securities and short-term investments (I),
• the attachment of funds held by third partie (II),
• the recovery of subsistence pensions (III),
• the attachment of pay (IV),
• the notice to third party holders (V).

Apart from the conditions specific to each of the civil-law procedures for attachment of incorporeal movables, which will be described in the present file, the conditions common to all the attachment measures described in File No. 1 must be met. A creditor must, therefore, hold a writ of execution, on the one hand, confirming an established due and payable debt and, on the other, indicating authority to execute.

Attachment of transferable securities and shareholder rights

1. in short

Attachment of transferable securities and shareholder rights is the procedure that allows the creditor to have transferable securities and shareholder rights belonging to his debtor seized and sold and to recover the sum due to him from the proceeds of the sale.

2. in practice

Attachment of transferable securities and shareholder rights is a procedure allowing a creditor to have his debtor's incorporeal rights seized and sold in order to recover the sum due to him from the price.

Attachment

Within the framework of this procedure, attachment is made of assets in the custody of a third party, namely the issuing corporate body (e.g. a business).

Attachment is made by serving an attachment document on the third party attached (the issuing corporate body), the debtor being subsequently advised.

Service of the attachment document renders the transferable securities and partnership rights untransferable, and they cannot then be disposed of nor be the subject of third party attachment.

Consequences of attachment

In the absence of amicable sale, these incorporeal rights will be the subject of compulsory sale.

Attachment of funds held by third parties

Attachment of funds held by third parties is a civil-law enforcement procedure which can be applied only to sums of money owed. It allows a creditor (the attaching creditor) holding writ of execution confirming a due and payable debt to attach receivables relating to sums of money held by a third party attached who will be the debtor of his debtor (the attached debtor).

In other words, it allows the creditor to acquire the receivable (relating to a sum of money) that his debtor (the attached debtor) holds against his own debtor (the attached third party).

1. in short

Attachment of funds held by third parties is the procedure allowing a creditor (the attaching creditor) to acquire the receivable that his debtor (the attached debtor) holds against his own debtor (the third parties attached).

Conditions

An attachment of funds held by third parties can be made only if the following conditions are met:

• The creditor must possess writ of execution confirming an established due and payable debt. Such debt will be the receivable underlying the attachment (the receivable giving rise to the attachment).
• The creditor's debtor (the attached debtor) must hold a receivable against a third party (the attached third party).
• The debtor of the debtor (the third party attached) must owe a sum of money by virtue of established, independent authority.

The attachment

The attachment is made by serving an attachment order on the third party attached, who is then required to declare to the process-server the extent of his obligations towards the debtor attached.

The attachment is then notified to the attached debtor in order, in particular, to enable him to put up a defence. Once these formalities have been completed, the attached third party will proceed with payment. Such payment will differ according to whether objection is lodged or not.

The effects

The attachment has immediate effect allocating the attaching creditor, thereby avoiding possible pro rata participation by creditors. Besides, attachment will render the attached sums non-transferable and they cannot be used for payment of any kind.

2. Attachment of funds in third party custody on a bank account

In short

Principle

Attachment of funds in third party custody in bank accounts is an attachment with the particular feature that it is made in respect of a bank and not the debtor (the attached third party) of the creditor's debtor.

The purpose of this attachment is to attach sums existing on the debtor's account. This procedure applies to both deposit accounts and all accounts showing sums of money opened at an establishment authorised by law to keep deposit accounts. It may be made on all cash accounts, current accounts and deposit accounts, whether interest-bearing or not.

Attachment

Attachment is made by serving a writ of attachment on the debtor's bank, which must then indicate to the process-server the balance on the debtor' account. The process-server will then proceed to attach the debtor's account, depending on the debit or credit balance on it. If the account shows a credit balance, the attachment will be made subject to a sum corresponding to the non-disposable bank balance (SBI) being left on it.

The non-disposable bank balance corresponds to the amount of protected actual income (RSA).

in practice

This civil law enforcement procedure is governed in ordinary law by articles 55 to 68 of the decree and article 47 of the Act of 9 July 1991, but also by the special provisions made under articles 44 to 49 and articles 73 to 79 of the decree of 31 July 1992.

It concerns deposit accounts but also all accounts showing sums of money payable, opened at an establishment authorised by law to keep deposit accounts (banks, postal giro centres, and savings banks).

An attachment of funds held by third parties may be made on all cash accounts, current accounts, and deposit accounts, whether interest-bearing or not.

However, it cannot be made for the full amount of the sum shown on the debtor's account.

Non-attachability of the sums shown on the account

In practice, the creditor will through his process-server require the bank to proceed with attachment of the debtor's account.

The bank will then advise the creditor whether the account shows a debit or a credit balance; points that should be taken into account as from now:

in the case of a debit balance

The process-server will advise the creditor that he cannot proceed with the attachment as the debtor's account shows a debit balance. Notification of the writ of attachment will be followed by a 15 day time limit. This time limit is required to place the debtor's account in order following operations that may have been made before the attachment.

The process-server will indicate to the creditor that the account may show a surplus within 15 days. In that case, attachment may be contemplated. However, the process server will advise the creditor that whatever the circumstances he will have to leave a sum at the debtor's disposal equivalent to the protected actual income (RSA) amounting to € 466.99 for a beneficiary living on his own and not looking after a child in 2011.

in the case of a credit balance

The balance provided by article 47 of the decree of 1992, namely the protected actual income (RSA) cannot be attached.

A period of fifteen days (cf. supra) is allowed to pass so that all operations made before the attachment can be taken into account. Operations undertaken after the attachment are not taken into account.

A distinction must be made at this point between non-attachable debts of a periodic nature (e.g. salary, retirement pension, unemployment benefit, family allowances, etc.) and non-attachable debts of a non-periodical nature (e.g. repayment of medical expenses, etc.)

• Non-attachable debts of a periodic nature: the debtor may ask for these sums to be immediately placed at his disposal. More often than not, these debts concern alimony, which is why they are placed at immediate disposal and not at the end of the fifteen-day period.

Nonetheless, operations charged to the debtor's account as from the date of the last payment of the non-attachable sum will not be included amongst these non-attachable debts of a periodic nature. Whatever the circumstances, the amount of these sums will not be added to what is known as the non-attachable bank balance (SBI) which in practice is equal to the amount of protected actual income (namely € 466.99 in 2011).

• Non-attachable debts of a non-periodic nature: the debtor may require these sums to be placed at his disposal. However, in this case they are not made immediately available but deferred. The deferment is 15 days to allow operations undertaken before the attachment to be taken into account. Here, again, cumulation with the non-available bank balance (SBI) is not possible.

However, these rules are subject to exceptions. In other words, in certain circumstances the non-attachable debt may be attached (e.g. a subsistence creditor may attach the debtor's non-attachable receivables).

Notwithstanding these exceptions, the debtor will be left with the non-available bank balance (equal to the RSA), which is invariably non-attachable.

Basis

The establishment (head office or branch) holding the debtor's account is required to reveal the balance on the debtor's account(s) at attachment date.

The establishment must not only declare the balance on the debtor's account at attachment date but also the sums entered as at that date. These sums form the receivable under the attachment.

However, the bank need not reveal movements on the debtor's account occurring after the attachment.

Where there is more than one account, the bank must in principle declare the balance on each account separately. The third party need not restrict itself to the deposit account showing cash sums alone. It must provide statements of account of any kind to the debtor as at attachment date.

The balance shown on attachment date may be affected by subsequent adjustment of operations in progress.

The action of attachment in principle makes all accounts held by the debtor with the attached third party unavailable (article 74 of the decree). However, the attaching creditor may limit the non-availability to certain accounts, especially by setting up a guarantee.

Particular arrangements are made for joint accounts or accounts opened in the name of one spouse only:

under joint accounts

The joint account holder not involved in the attachment must prove its ownership of all or part of the sums paid into the account;

in the case of an account opened in the name of one spouse alone

The position varies according to the applicable matrimonial arrangement:

• System of joint holding of property: article 1402 of the Civil Code applies (article 1402 of the Civil Code: "Any property, movable or immovable, is regarded as a joint accrual unless it is proved to belong to one of the spouses by virtue of a provision of the law.

If the property is of a kind not indicating proof or a mark of its origin, the spouse's personal property must, if disputed, be established in writing. In the absence of an inventory or other pre-existing proof, the court may take all documents into account, namely the family records, registers and domestic papers, as well as bank documents and invoices. It may even allow proof by testimony or presumption should it find that it was materially or morally impossible for a spouse to obtain a written document.")

Proof of ownership of the sums must be shown.

• System of separate ownership: article 1538 (3) of the Civil Code applies in this case. This paragraph provides that: "Property regarding which neither spouse can justify exclusive ownership is considered to belong to them indivisibly, half and half".

Consequently, if the ownership of funds is decided, attachment can be undertaken without difficulty. Otherwise, it will be up to the joint holder of the sums to prove that they belong to him.

Recovery of subsistence pensions

1. Direct payment of the subsistence pension

This procedure allows any creditor of a person receiving subsistence pension to obtain direct payment of the sum by third parties owing established, payable amounts to his debtor.

Definition

The procedure for direct payment of subsistence pensions allows a creditor of a subsistence pension to obtain direct payment of the sums owed to him.

The attachment

This procedure can be applied only with third party assistance: the third party debtor for the pay or other income (usually the employer).

The third party debtor can through the procedure directly transfer the sum owed by him to the attached debtor (the debtor of the creditor originally implementing the procedure) or the creditor.

It is undertaken by a process-server. The process-server concerned is that at the place where the creditor of the subsistence pension resides.

The third party debtor will then pay the sums directly to the creditor.

As with all procedures, certain points may arise. They fall within the jurisdiction of the district court at the place where the debtor for the subsistence pension resides.

Further procedure

Attachment procedure may end through lifting of the attachment or if the pension ceases to be payable.

2. Public recovery of subsistence pensions

This procedure allows the Public Treasury Accountants to proceed to recover any subsistence pension decided in final judgement to be recovered on the creditor' behalf.

Within the framework of this procedure, the Public Treasury will be subrogated to the subsistence creditor. It will then initiate its own recovery procedures.

Definition

This procedure allows the Public Treasury to recover the subsistence pensions decided by the Court in final judgement on the creditor's behalf.

The attachment

The Public Prosecutor plays an important role within the framework of this procedure. In this case, the creditor's application for recovery will be sent to the Public Prosecutor at the District Court for the district in which he resides.

Public recovery of subsistence pensions is subsidiary in nature. In effect, the creditor must prove that exercise of the execution procedures under private law has had no result.

The Public Prosecutor will advise the creditor whether or not he agrees to the request. If he does, he will so inform the debtor who can subsequently discharge the debt only through the Public Treasury Accountants.

Attachment of pay

Attachment of pay is a procedure that allows a creditor to attach "at source" the sums that are payable to him by his debtor.

1. Definition

This procedure allows a creditor directly to attach the sums due to him from his debtor through his employer.

2. The attachment

This procedure applies only to sums in the nature of pay. They apply only to the attachable proportion of salary or wages (cf. article R. 3252-2, Labour Code).

This procedure falls within the jurisdiction of the local court and not within that of the execution court.

That attachment of pay in the strict sense is preceded by a waiting period: conciliation. The Court attempts to reconcile the parties. If it fails, the court will check the amount of the debt, including principal, interest and expenses, for attachment to be proceeded with.

The chief clerk proceeds with attachment by issuing an attachment document served on the employer. The debtor receives a copy of it in due course. The employer is then required to pay every month the withholdings for which the attachment is made. These sums are paid to the clerk, who then passes them on to the creditor.

Third party holder notice

A third party notice is not a civil execution procedure as such. In fact, the procedure falls within tax law. It allows the Public Treasury to seize cash receivables that taxpayers possess against third parties.

1. Definition

A third party holder notice allows the Public Treasury to seize cash receivables that taxpayers possess against third parties.

2. Attachment

This procedure applies to any debt of a tax nature.

It is initiated on receipt by the attached third party of a registered letter with advice of receipt issued by the public accountant.

Within the framework of this procedure, all creditors of the debtor are in the same situation: none of them has the status of privileged creditor.

In the event of a dispute, the competent court is the execution court for disputes concerning the proper nature of the procedure. On the other hand, the administrative court has jurisdiction in disputes concerning the receivable underlying proceedings.