Part Two of Act LIII of 1994 on Judicial Execution deals with the execution of claims for money. Chapter IV of Part Two regulates the garnishment of wages and other emoluments, Chapter V applies to the attachment of sums administered by financial institutions, Chapter VI covers the attachment of movable property while Chapter VII contains the regulations on the attachment of real property.

The attachment of movable property is one of the most frequently applied methods of judicial execution as execution for property (execution intended for the collection of claims for money), in addition to the attachment of sums administered by financial institutions, the garnishment of wages and the attachment of real property. Such division is based upon the differentiation of properties which can be attached.

The principle of gradualness must be respected during execution. Accordingly, if it is anticipated that the claim cannot be collected within a relatively short period of time by means of the attachment of wages or funds administered by payment service providers, any attachable property of the debtor can be attached. Attached real property can only be sold if the claim is not fully covered by the other property of the debtor or can only be satisfied after the lapse of a disproportionately long period.

Summary:

• General Rules on the Attachment of Movable Property
• Attachable Movable Property
• Attachment Protocol
• Property Exempt from Enforcement
• Appraisal
• Special Rules for the Seizure of Certain Objects
• Impoundment
• Seizure at a third party
• Seizure of claims
• Notification of lien holder
• The sale of seized movable property

General Rules on the Attachment of Movable Property

Attachment represents a special right for the judgement creditor, facilitating the satisfaction of his claim through the subsequent sale of the attached movable property.

The attachment of movable property allows the judgement creditor to collect his claim from the purchase price received for the subsequent sale of the attached movable property.

If the debtor has not voluntarily paid the debt indicated in the enforcement order, the bailiff shall record the movable property of the debtor in the attachment protocol and, thus attach them.

Movable property is to be attached within 30 days of the day on which the costs of execution were advanced. If serving the enforcement order on the debtor in person, the bailiff shall immediately effect the seizure of movable property in the absence of voluntary action from the debtor.

If the enforcement order was served by mail, the attachment of the movable property must be effected within 45 days of service.

At the request of the judgement creditor, the bailiff shall, by inspecting the pledge registry administered by the Hungarian National Chamber of Notaries Public, ascertain whether the judgement debtor appears in the registry as a mortgagor or if his assets or certain of his assets are encumbered by a lien and, if necessary, contact the notary public to this end. In case of the attachment of assets defined by law as movable assets that can be identified beyond doubt, the bailiff must ascertain by inspecting the pledge registry ex officio whether the attached movable property is encumbered by a lien.

When making the attachment, the bailiff shall invite the debtor to declare on site which of his assets is encumbered by a lien. If the enforcement order was served by post, the bailiff shall invite the debtor at the same time to make his declaration regarding the lien encumbering his property within 15 days of receipt of the enforcement order.

If possible, the attachment must be effected in the presence of the debtor or his representative or, in their absence, an adult family member living together with the debtor.

Movable property may be attached if the debtor has not voluntarily fulfilled his obligation set out in the enforcement order. In practice, the bailiff serves and delivers the enforcement order to the debtor in person on site within 30 days of the date when the costs of execution have been advanced, and orders him to make immediate (voluntary) settlement.

At the request of the judgement creditor, the enforcement order can be served by post as well. (Subsection (2) of Section 36, Execution Act)In this case, voluntary fulfilment is permitted within 45 days of service, while the legal consequences of failure to do so are the same as when the order is made on site. In such a case, the movable property is attached within 45 days.

The execution of attachment may not be prevented by the fact that the enforcement order cannot be served on site due to the absence of the judgement debtor. In such a case, the protocol made at the enforcement shall be served by post to the judgement debtor, together with the enforcement order. If the judgement debtor is absent, the attachment must be effected, if possible, in the presence of an adult family member of the debtor as laid down in Section 85 of the Execution Act. According to court practice, any distant relative can also be considered an adult family member as the only condition is that he/she must live in the same household as the judgement debtor.

It often happens during the on-site procedure that the debtor's residence, other place of dwelling or other premises are locked. Sections 43 to 45 of the Execution Act detail the acts of coercion at the site of enforcement. Accordingly, in the course of enforcement, the bailiff may inspect and search the judgement debtor's residence and other premises, any property and assets, documents on his business activities. At the same time, the bailiff may not inspect or attach movable property located in the clothes or on the body of the judgement debtor, e.g. jewels, cash, objects held in his hand, as this would qualify as a body search which is not permitted.

The bailiff may open the judgement debtor's locked residence, other place of dwelling, etc. as well as his furniture or other movable property. At least one official witness must be present if neither the judgement debtor nor any adult witness is present.

As the debtor's resistance is not unusual in the case of on-site actions, the bailiff may seek the support of the police if necessary.

In the absence of voluntary fulfilment, the attachment of movable property must be effected without delay, namely immediately on site. The disciplinary or material (financial) liability of the bailiff can be established if he omits the attachment without due cause.

Attachment is effected by the bailiff listing the movable property of the judgement debtor in the attachment protocol and attachment is thus realised in this manner. Attachment may not be conducted without preparing an attachment protocol as this is the only evidence and, at the same time, the condition of validity of the attachment of the movable property which cannot be replaced by anything else. Attachment is accompanied by the legal effect that the attached movable property is subject to the prohibition of alienation and encumbrance as of the time of the attachment.

Otherwise, the Execution Act does not define the concept of 'movable property'. In general, all property, i.e. physically existing things that have financial value, as well as receivables, claims or rights representing financial value, can be attached.

The Civil Code only defines the concept of 'real property' and, therefore, defining 'movable property' based on negation, we can say that everything which is not real property is movable property. For the purposes of enforcement, movable property thus includes receivables, securities, business shares, copyright, etc.

Bailiffs do not inspect the pledge registry administered by the Hungarian National Chamber of Notaries Public in all cases where movable property is attached. This can take place at the request of the judgement creditor with the aim of determining whether the judgement debtor appears on the pledge registry and whether his property is encumbered by a lien. In addition, when making the attachment, the bailiff must invite the debtor to declare which of his property is encumbered by a lien.

Attachable Movable Property

As a general rule, only movable property that is owned by the judgement debtor may be attached.

Movable property in the possession or custody of the judgement debtor as well as movable property that can be assumed to be owned by the judgement debtor may be attached.

Movable property in the possession or custody of the judgement debtor may not be attached if, based on the mark thereon or from any other circumstance, it can be established beyond doubt that the movable property is not the property of the judgement debtor.

Whilst married, the property of the spouses or of either spouse can also be attached in enforcement conducted against one of the spouses only. The attachment may not be effected if the spouse against whom the enforcement is not being conducted can prove beyond doubt that the property concerned is not part of the joint property but is his/her private property.

In case there are multiple assets, the order of their attachment is determined by the bailiff

The bailiff continues the attachment for as long as the claim, including the related costs including the execution costs expected to arise until the end of the procedure, are fully covered. It is necessary to take into account the fact that the claim should be covered even if the debtor's spouse has a claim on the joint property or any other stated claims are involved.

Pursuant to Subsection (1) of Section 86 of the Execution Act, movable property in the possession or custody of the judgement debtor as well as movable property which can be assumed to be owned by the judgement debtor may be attached. The fact that the movable property is in the possession of the judgement debtor presumes that it is also owned by him, thus this is an assumption.

This assumption, however, does not apply in cases where it can be verified based on the mark on the movable property, that it is not owned by the judgement debtor. The third party concerned is required to prove his ownership title contrary to the assumption. Such evidencing is rather limited as it must take place upon the attachment and the bailiff is not required to conduct a proof procedure and is only obliged to inspect documents. If the third party is not present at the attachment and the judgement debtor cannot present the documents either, the ownership title can only be proven in an action for replevin to be initiated by the third party.

According to the Execution Act, whilst married, the property of the spouses or of either spouse can also be attached in enforcement conducted against one of the spouses only. On the other hand, the property which is part of the private property of the other spouse who is not the judgement debtor cannot be attached solely if the party concerned proves the same beyond doubt to the bailiff immediately on site. Otherwise, the fact that the property is part of the private property must be proven in an action for replevin. Section 4 of Act XXIX of 2009 states that the provisions applicable to marriage and spouses must be applied in the act with respect to registered civil partnership and registered civil partners as well.

The bailiff continues the attachment for as long as the claim, including the related costs and the execution costs expected to arise until the end of the procedure, is fully covered. The collection commission due to the bailiff for the successful enforcement must also be taken into account.

When effecting the attachment, the price which can be received for the sale of the movable property as well as the fact that the assessed value can be reduced to one-fourth during the sale of the movable property at auction must be taken into account.

Neither the judgement creditor nor the debtor are authorised to select the objects to be attached by the bailiff during attachment.

Attachment Protocol

The attachment protocol is the only evidence of the performance of the attachment, as well as being the condition of its validity.

The attachment protocol must state the number of persons in the judgement debtor's household and the list of property exempted from attachment, as well as whether any vehicle was attached in accordance with Subsection (5) of Section 103. Listing the exempted property may be omitted if the property attached is expected to cover the claim to be enforced and the costs of the procedure.

When making the attachment, the bailiff delivers a copy of the attachment protocol to the parties present. This is particularly important as an action for replevin with suspending effect may be initiated within 8 days of the attachment.

If the bailiff effected the attachment in the absence of the judgement debtor, the protocol must be served to the judgement debtor.

If the bailiff effected the attachment in the absence of the judgement creditor, a copy of the attachment protocol must be served to the judgement creditor.

The attachment protocol (for which bailiffs use printed forms) must include the name of the bailiff, the parties and any other stakeholders present, the place and time of the action, the legal title and amount (related costs, expenses) of the claim to be enforced, the number and date of issue of the enforceable documents and the description of the enforcement action itself (attachment of movable property and each item of attached movable property, including its estimated value).

The attachment protocol must also include a warning to the judgement debtor that the inclusion or removal from enforcement of the attached property or the removal or damaging, etc. of the stamp used for sequestration or seizure will lead to detrimental legal consequences for him (the crime of breaking a seal pursuant to Section 249 of the Criminal Code).

It must also be apparent from the protocol that the bailiff handed over the attachment protocol to the judgement debtor on site or left it there, and that the bailiff, the witness, the judgement creditor and the judgement debtor signed the protocol after familiarising themselves with the contents thereof. The commencement and end date of the attachment must be clearly stated in the protocol.

In general, the attachment protocol must be prepared immediately at the site of the attachment, but exceptions can be made, for instance in case the judgement debtor resists or puts the bailiff at risk of harm.

Depending on the case, it may be expedient to make video and audio recordings of the attachment in addition to the protocol. The recordings must be stored separately from the written documents, for a period of five years from the date of filing, after which they must be destroyed by the bailiff.

Property Exempt from Enforcement

Property which is exempt from enforcement by law shall not be seized even if the judgement debtor consents to the seizure of such.

When effecting enforcement against a natural person, care must be taken to ensure that the judgement debtor and his family can carry on with their lives and that the judgement debtor may continue exercising his profession.

Where the law specifies the scope of property exempt from enforcement in an alternative manner, the exemption applies to the property selected by the judgement debtor that is present at the attachment.

The Execution Act lists the property exempt from enforcement. Exemption means that the exempted property cannot be attached even if the judgement debtor consents to the seizure of such. Where the law specifies the scope of property exempt from enforcement in an alternative manner, the exemption applies to the property selected by the judgement debtor that is present at the attachment. A judgement debtor who is not present at the attachment may not subsequently exercise the right of selection.

Sections 90 to 96 of the Execution Act list the property exempt from enforcement:

Section 90 (1) The following movable property shall be exempt from enforcement:

a) the means which are essential for the judgement debtor to be able to exercise his occupation (profession), thus in particular vital tools, instruments, technical, military and other equipment and accessories, uniforms, self-defence weapons, transportation equipment, apart from motor vehicles

b) means indispensable for pursuing regular studies, thus in particular textbooks, educational materials, musical instruments

c) essential articles of clothing, three sets of outer garments, one winter coat, one overcoat, three pairs of shoes

d) necessary bed linen: one set per person, complete with two sets of covers

e) furniture as is sufficient to accommodate the number of persons living in the judgement debtor's household, no more than three tables and three cabinets or other furniture serving the same purpose, one bed or other place to sleep and one chair or other form of seating per person;

f) means of heating and lighting as necessary

g) kitchen and household appliances indispensable for the judgement debtor's household, as well as a refrigerator or freezer and a washing machine

h) any decoration (order of merit, medal, badge, plaque), awarded to the judgement debtor, as certified by an official document

i) medicine, medical and technical aids prescribed for an ailment or disability of the judgement debtor, the judgement debtor's car if physically handicapped

j) objects used by a child living in the judgement debtor's household, if designed for children only

k) one month's supply of foodstuffs and three months' supply of heating fuel for the judgement debtor and the persons living in his household

l) crops and fruits not yet harvested

m) items which cannot be considered in liquidation proceedings as being the judgement debtor's property

(2) If seizure is carried out at more than one real property, the exemption defined under Points e)-g) and k) of Subsection (1) shall apply to the seizure process at one of such properties designated in the judgement debtor's statement.

(3) The property referred to in Subsection (1) shall not be exempt from enforcement, with the exceptions set forth in Paragraph a) and in Paragraphs h) and i), if is made of precious metal or some other material of the like, and as such is of high value compared to standard utility objects.

Section 91 In respect of a judgement debtor engaged in agricultural cultivation as a profession, the following shall be exempt from enforcement above and beyond the items listed in Section 90:

a) sowing seeds, agricultural equipment and machinery, work animal and fodder necessary for the cultivation of the judgement debtor's land;

b) one cow or other farm animal, along with three months' supply of fodder.

Section 92 The following shall be exempt from enforcement:

a) sums received with decorations, honorary titles, prizes, badges, diplomas

b) insurance money, not including the portion payable for seized property

c) money deposited in the strike fund of a trade union

Section 93 (1) The copyright of an author or his legal successor shall be exempt from enforcement.

(2) Fifty per cent of royalties shall be exempt from enforcement.

(3) Only works already published (made public) or copies of such may be subjected to enforcement.

Section 94 The following shall be exempt from enforcement:

a) business shares of cooperative members

b) compensation coupons received based on entitlement whilst retained by the person entitled

Section 95 Money and other consignments posted, as well as items deposited with a public carrier for carriage shall be exempt from enforcement until such are delivered by the postal service or by the carrier to the consignee.

Section 96 (1) Items deposited at a public warehouse shall be exempt from enforcement.

(2) The rights relating to objects deposited at public warehouses, as well as the documents thereof (docket and lien warrant) may be subject to enforcement.

Section 96/A If requested by the judgement debtor or by the holder of security deposit, the bailiff shall exempt the money provided as security deposit, savings account book or securities, until such time as the deposit is to be refunded. The exemption may be granted if the applicant is able to prove that the transaction secured with caution money was not concluded with a relative or with a legal entity in which he is involved by means of majority influence, nor between the company and one of its members.

Section 96/B The assets and property listed under Sections 90 and 91, with the exception of those referred to in Points h), l) and m) of Section 90, shall be deemed to be exempt only if the judgement debtor is a natural person.

Appraisal

For the purposes of seizure, the bailiff establishes the value of the seized movable property by means of appraisal.

For the purposes of seizure, the bailiff establishes the value of seized movable property by means of appraisal.

The bailiff appraises the value of property based on its market value. If the parties have agreed upon the appraised value, such value is authoritative.

At the request of either party, the bailiff employs an expert appraiser during seizure. Following the conclusion of the seizure, the bailiff may alter the appraised value with the expert appraiser also participating if so requested by either party within eight days of delivery of the attachment protocol.

At the seizure, the bailiff establishes the value of the seized movable property by means of appraisal. The appraised value must be determined in relation to the market price. In practice, the bailiff establishes the appraised value in relation to the market price, whilst also taking supply and demand and the degree of wear into account, and records this value in the protocol.

The parties may agree upon the appraised value. In such case, this value is authoritative. The appraised value is often disputed. At the request of either party, the bailiff can make use of an expert appraiser already during the seizure. Following the conclusion of the seizure, either party may request that the bailiff modifies the appraised value within eight days of delivery of the attachment protocol. In such case, the bailiff must involve an expert appraiser. Pursuant to Subsection (2) of Section 34, the costs of the expert appraiser must by advanced by the person who requested his involvement.

Special Rules for the Seizure of Certain Objects

The Execution Act includes rules deviating from the general rules for the seizure of certain movable property which, due to its nature, is not standard (e.g. motor vehicle, vessel or aircraft, business share, etc.).

In respect of the seizure of gold, platinum, silver or currency, the bailiff collects the assets and places the foreign monies seized on the following working day on the bailiff's escrow account. The same procedure applies when the judgement debtor pays the debt to the bailiff in a foreign currency.

In respect of the seizure of cash, the bailiff collects the cash seized and deposits it on the following working day on the bailiff's escrow account.

In respect of the seizure of the judgement debtor's property or business share from the assets of a company, the bailiff notifies the company in question and the county court acting as the court of registry by sending a copy of the attachment protocol.

The seizure of business shares must be registered in the company records and in the company register by the company affected and by the court of registry, respectively.

In respect of the seizure of gold, platinum, silver or currency, the bailiff collects the assets and places the foreign monies seized on the following working day on the bailiff's escrow account, where it must be kept separate in the currency concerned. It can also happen that the judgement debtor pays his debt in foreign currency. The foreign sum thus paid must also be placed on the escrow account. Accordingly, the bailiff is obliged to place on the escrow account only the money seized while he is obliged to collect the gold, platinum and silver for custody but is not obliged to place them in judicial deposit.

In respect of the seizure of articles made using gold, platinum, etc. or of precious stones and printed securities, the bailiff collects the assets seized and deposits them into court deposit within 24 hours.

In respect of the seizure of cash, the bailiff collects the cash seized and deposits it on the bailiff's escrow account within 24 hours.

In the case of the seizure of the judgement debtor's property or business share from the assets of a company, the bailiff notifies the company in question and the county court acting as the court of registry by sending a copy of the attachment protocol. The seizure must be registered in the company records and in the company register by the company affected and by the court of registry, respectively.

The provisions on enforcement for movable property apply to the seizure of the business share of the judgement debtor.

1. Seizure of a motor vehicle

In respect of the seizure of a motor vehicle, the bailiff must also seize the registration papers and the title certificate of the vehicle.

The bailiff sends a copy of the seizure report along with the registration papers and the vehicle title certificate, if seized, to the relevant competent transport administration authority based on the home address or registered office (or failing this the branch office) of the owner of the vehicle, or the home address or registered office (or, failing this, the branch office) of the operator of the vehicle if the owner is a foreign national.

The bailiff may also effect seizure of a motor vehicle based on the data contained in the register of motor vehicles if the judgement debtor is the registered owner of the vehicle.

In the course of the seizure of a motor vehicle which is indispensable for the occupation of the judgement debtor, with the exception of impoundment, if it is a natural person, only the vehicle's title certificate shall be seized and sent together with the attachment protocol to the competent transport administration authority, or if unavailable, to the authority where the vehicle is registered. The judgement debtor is allowed to continue using the vehicle - with the exception of impoundment - until it has been sold.

In general, a vehicle is seized in such a way that the registration papers and the title certificate of the vehicle are also seized. The bailiff usually effects the seizure at the judgement debtor's place of residence or where the vehicle is located.

The bailiff sends a copy of the attachment protocol along with the registration papers and the vehicle title certificate to the transport administration authority competent for the home address or registered office of the owner of the vehicle, or the home address or registered office of the operator of the vehicle if the owner is a foreign national.

In the case of failure to seize the registration papers or the vehicle title certificate, the bailiff sends a copy of the attachment protocol to the transport administration authority as well as ordering it to impound the vehicle, which it is obliged to do.

The bailiff may not only effect the seizure of a motor vehicle on site but also based upon the data included in the register of motor vehicles. The purpose of the seizure of the registration papers is to be able to withdraw the licence to use the vehicle.

Based on legal practice, a motor vehicle is considered to be indispensable for the occupation of the judgement debtor if it is essential for exercising the occupation of the judgement debtor concerned as, in the absence thereof, he would not be able to exercise his occupation or it would impose an extraordinary burden upon him (e.g. GP, heating system fitter, plumber, etc.).

In this case, the registration papers must be seized. The judgement debtor can use the motor vehicle until it has been sold.

2. Seizure of a vessel or aircraft

In the case of the seizure of a vessel or aircraft, the bailiff must also seize the registration papers and send them along with a copy of the attachment protocol to the authority responsible for vessel and aircraft registration, which will then enter the seizure of the vehicle into the records.

The registration papers must also be seized in the case of the seizure of a vessel or aircraft and sent along with a copy of the attachment protocol to the authority responsible for vessel and aircraft registration, which will then enter the seizure of the vehicle into the records.

3. Seizure of property kept in a safe deposit box

The bailiff effects the seizure of movable property kept in a safe deposit box by affixing his seal to the safe and then notifying the service provider and the judgement debtor of the time of opening the box. At the time specified, the judgement debtor must open the safe deposit box in the presence of the bailiff and the service provider, and the bailiff shall prepare the detailed attachment protocol. If the judgement debtor fails to appear at the time specified, the box is opened by the service provider, or caused to be opened by the bailiff if the service provider does not have a key to the box.

If possible, the seized property must be re-deposited into the safe deposit box for storage until sold.

In case of the seizure of property kept in a safety deposit, the bailiff affixes his seal to the safe and makes a protocol thereof. He then sends a copy of the protocol to both the service provider and the judgement debtor, notifying them of the time of opening the box. The box is primarily to be opened by the judgement debtor, but, if he fails to appear on site at the time of opening or refuses to open the box, the box will be opened by the service provider. The bailiff attaches the movable property found in the box, listing them in the attachment protocol. If possible, the seized property must be re-deposited into the safe deposit box for storage until it is sold. If this is not possible, the bailiff must take measures to arrange the placing of the property in another location.

The judgement creditor shall be notified of the time of opening the safe if it was indicated in the enforcement order.

Property placed in a joint safety deposit box can be subject to enforcement for covering the claim against any of the owners.

Impoundment

Impoundment is a more severe method of the attachment of movable property: in this case, the right of the judgement debtor to dispose of the attached movable property ceases and he cannot use the movable property any more.

In general, the movable property attached in the attachment of movable property remain in the custody or management of the judgement debtor who can use them until the bailiff takes them away from him to be sold.

There are two forms of impoundment: through the locking up of movable property, with or without the appointment of an official receiver.

The fee and costs of the official receiver are set by the bailiff.

Opening the storage site or room and removing the seal are criminal acts.

According to Subsection (1) of Section 105 of the Execution Act, if it can be presumed that the judgement debtor will not safeguard the movable property seized, the bailiff places such movable property in a secure place of storage (cabinet, chest, etc.) or in a separate room, and locks and affixes his seal upon it. Opening the storage place or room or damaging or removing the seal constitute criminal acts according to the Criminal Code.

The purpose of impoundment is to ensure the custody of the movable property for reasons relating to the person of the judgement debtor or the existence of any circumstance which jeopardises the guarding of the movable property.

Execution Act 106 (1):

The bailiff nominated an official receiver to take custody of the seized movable property if

• a) the judgement debtor has refused custody
• b) the judgement debtor is absent for an extended period
• c) so requested by the judgement creditor and such request is found to be justified by the bailiff in view of the circumstances of the case
• d) it is deemed necessary to ensure the success of the procedure and the judgement creditor has granted consent thereto

Any appropriate natural person or body can be appointed an official receiver, who will then be bound to safeguard and manage the attached property.

In return for performing his duties, the official receiver is due a fee and his costs must be paid as well. The fee and the costs are to be advanced by the judgement creditor.

Impoundment is not identical to sequestration which is regulated as a security measure. The latter can be ordered for any individually specified, movable or real property, as well. Sequestration is always an action of the bailiff, while impoundment is ordered by the court and effected by the bailiff.

Seizure at a third party

The bailiff may attach the movable property of the judgement debtor held by a third party.

If it can be presumed that any of the movable property of the judgement debtor is held by a third party, other than the parties, the bailiff shall order such third party to make a statement.

The third party must file a statement within 8 days of the service of notice to the bailiff in which he/she shall state as to whether a) the property indicated in the notice is in his/her possession, and if so, on what grounds, b) he/she acknowledges the right of ownership of the judgement debtor to the property in question, c) anybody has laid a claim to the property in question, and if so, on what grounds.

If the third party has acknowledged that the property in his/her possession is owned by the judgement debtor, the bailiff shall seize such movable property in line with the general rules.

If the third party fails to file the aforementioned statement or to acknowledge the right of ownership of the judgement debtor, the judgement creditor may file for legal action to order such third party to cease the hindrance of seizure.

If it can be presumed that any movable property of the judgement debtor is held by a third party, other than the parties, the bailiff shall order such third party to make a statement, warning him/her of the legal consequences set out in Section 109.

(2) The third party shall file a statement within 8 days of the service of notice to the bailiff in which he/she shall state as to whether

• a) the property indicated in the notice is in his/her possession, and if so, on what grounds
• b) he/she acknowledges the right of ownership of the judgement debtor to the property in question
• c) anybody has laid a claim to the property in question, and if so, on what grounds.

Section 108 If the third party has acknowledged that the property in his/her possession is owned by the judgement debtor, the bailiff shall seize such movable property where it is located.

Section 109 (1) If the third party has failed to file the aforementioned statement or to acknowledge the right of ownership of the judgement debtor, the judgement creditor may file for legal action to order such third party to cease the hindrance of seizure.

(2) The third party shall be liable to the judgement creditor according to civil law for the costs and damages caused by

• a) his failure to file the statement specified in Subsection (2) of Section 107, or by his refusal in bad faith to acknowledge the judgement debtor's right of ownership
• b) his failure to diligently safeguard the property after the service of the notice
• c) his obstruction of the seizure

Seizure of claims

The bailiff may seize the outstanding claim of the judgement debtor against a third party.

If a judgement debtor has an outstanding claim against a third party or if the judgement debtor has concluded a contract with a third party for a future claim, the bailiff shall seize such claim and order the third party to make a statement.

The third party must file a statement within 8 days of the service of notice to the bailiff in which he/she must state a) as to whether he/she acknowledges the claim or the contract for a future claim, b) the due date of the claim, c) as to whether anybody has a laid claim to the claim in question, and if so, on what grounds.

The third party may not settle the claim after the service of notice either to the judgement debtor or to any other person, but must pay the amount of the claim to the bailiff's escrow account on or before the due date or place the subject of the claim in court deposit.

The third party, after having fulfilled the claim to any party, is liable to the judgement creditor up to the amount (value) of the claim.

If the third party fails to acknowledge the claim or the contract concerned or to effect placing in deposit, the judgement creditor may file for legal action against the third party for the collection of such claim.

If the judgement debtor has an outstanding claim against a third party or if the judgement debtor has concluded a contract with a third party for a future claim, the bailiff shall seize such claim and order the third party to make a statement, warning him/her of the legal consequences under Sections 112 and 113.

The third party shall file a statement within 8 days of the service of notice to the bailiff in which he/she shall state as to whether

• a) as to whether he/she acknowledges the claim or the contract for a future claim
• b) the due date of the claim
• c) anybody has laid a claim to the claim in question, and if so, on what grounds

On the grounds of the legal consequences set out in Sections 112 and 113 of the Execution Act:

Section 112 (1) The third party may not settle the claim after the service of notice either to the judgement debtor or to any other person, but shall pay the amount of the claim to the bailiff's escrow account on or before the due date or place the subject of the claim in court deposit.

(2) The third party, after having fulfilled the claim to any party, shall be liable to the judgement creditor up to the amount (value) of the claim.

Section 113 If the third party fails to acknowledge the claim or the contract concerned, or to file the statement described in Section 111 or to effect payment (deposit) as described in Section 112, the judgement creditor may file for legal action against the third party for the collection of such claim.

Notification of lien holder

The bailiff notifies the person holding a lien on the seized property of the enforceability of his claim.

Upon conclusion of the seizure, the bailiff immediately notifies the person presumed to hold a lien on the seized property. The bailiff follows the same procedure following the receipt of information from the pledge registry.

The bailiff informs the lien holder of the possibility to enforce his claim secured by such lien during the enforcement procedure, and to submit a relevant application to the bailiff within 8 working days of receipt of notice. The bailiff must forward the application without delay, no later than by the next working day following receipt to the court implementing the enforcement.

The court implementing the enforcement must proceed without delay to declare the lien holder's claim as due and to permit the lien holder's direct involvement in the enforcement procedure if the legal grounds and the amount of the claim are not contested.

The court conveys the lien holder's request to the judgement debtor and to the judgement creditor by service of process, whereby to declare whether they acknowledge the legal grounds and the amount of the claim secured by the lien. If, however, either the judgement debtor or any judgement creditor disputes the above, the court rejects the request and the lien holder may file for legal action to enforce his claim arising from the lien.

The bailiff must immediately notify the lien holder of the seizure of the pledged property. The bailiff also informs the lien holder of the possibility to enforce his claim secured by such lien during the enforcement procedure, and to submit a relevant application to the bailiff within 8 working days of receipt of the notice. The bailiff must forward the application to the court implementing the enforcement within the next working day following receipt.

The court must judge the application out of turn, in non-litigious proceedings. The application is approved if the pledge property was seized in the case and the legal basis of the amount of the claim secured with the lien is not contested.

If there is no need to supplement the application, the first step is that the enforcement in regards to the pledged property must be suspended within three working days to prevent the sale of the pledged property before the ruling on the application has been adopted. The court sends the ruling on the suspension of enforcement to the bailiff and the parties.

The judgement debtor and the judgement creditor must declare within eight days of receipt of the court's notice whether they acknowledge the legal grounds or the amount of the claim secured by the lien. Neither the legal basis nor the amount can be contested in this procedure if they are incorporated in a public deed.

If either of the persons mentioned above contests the legal basis or amount of the above claim and substantiates his statement, the court shall reject the application for direct involvement by court order and the lien holder may file for legal action to enforce his claim once the court order has become final.

Pursuant to Subsection (6) of Section 114/A of the Execution Act, if the judgement debtor or a judgement creditor has acknowledged an amount other than what is indicated in the lien holder's claim, the court notifies the lien holder accordingly. The lien holder may request that the court adopt a court order approving his direct involvement in respect of such amount.

The sale of seized movable property

If the judgement debtor has not fulfilled his payment obligation even after the seizure, the seized movable property will be sold.

If the judgement debtor has not fulfilled his payment obligation even after the seizure, the next stage of financial force is when the seized movable property is sold.

The bailiff takes measures without delay for the sale of seized property 30 days after the date of seizure or of the date of receipt of information from the records of vessels and aircraft and from the pledge registry. The bailiff sets the date of sale for a time which is most practical given the local circumstances.

Perishable items must be sold immediately following seizure.

Pursuant to Subsection (1) of Section 115 of the Execution Act, the bailiff shall take measures without delay for the sale of seized property 30 days after the date of seizure or of the date of receipt of information from the records of vessels and aircraft and from the pledge registry.

If an action of replevin is lodged within eight days of the date of seizure, the sale of the property in question may not be effected until the definitive conclusion of such action.

The bailiff shall schedule the date of sale for a time which is most practical given the local circumstances.

According to Subsection (1) of Section 116 of the Execution Act, perishable items shall be sold immediately following seizure.

The bailiff shall proceed to sell perishable items without recourse to auction, but subject to the provisions of auction sale if expressly requested by the parties, and if the buyer and the purchase price are specified.

If a perishable item cannot be sold without auction, the bailiff shall sell it to a trader whose activities include the distribution of such items, or at the nearest marketplace, fair or other market hall designated by the local authorities, according to the regulations governing the sale of goods at markets and fairs, and in due observation of the provisions on the sale of movable property. In this case, the bailiff is not required to announce the sale, but shall publish it in a manner which is the most practical given the local circumstances.

1. Sale of movable property by auction

The sale of movable property is an important phase in enforcement for movable property. The primary method of sale is by auction, which is a forced sale.

Unless otherwise provided for by law, movable property must generally be sold by auction.

The Execution Act designates a number of possible auction venues. Of these venues, the one where the most buyers are expected, and does not render the enforcement more expensive should be chosen. The venue of the action is determined by the bailiff ex officio. Nevertheless, he may take into account the wishes of the parties.

The auction is conducted by the bailiff. Auctions are scheduled by the bailiff by way of an auction notice. The mandatory content of the auction notice includes the names of the parties; the place and date of the auction; the movable property to be sold at the auction and the appraised value of such; and the place and date where and when the movable property may be inspected prior to the auction. The absence of such entails the cancellation of the auction.

Notices of the traditional auctions of movable property must be published along with those for electronic auctions.

Any movable property which is not sold at the first auction must be sold at the second auction.

At the request of the judgement creditor, the bailiff shall sell any movable property with an estimated value of 100,000 forints or more by means of electronic auction. The electronic auction system is operated by the Hungarian Chamber of Judicial Bailiffs. Anyone who wishes to take part in an auction must register at the office of a judicial bailiff. Once he has received his username and password and paid the registration fee of HUF 6,000, he can log in the electronic auction system and start bidding. Obviously, the person bidding the highest price for the movable or real property concerned will win the auction.

According to Section 118 of the Execution Act, movable property shall generally be sold by auction unless otherwise provided for by law.

Auctions may be held in the following places:

• a) in court auction halls
• b) in court buildings
• c) in the buildings of the village, town, Budapest district local governments or in the premises designated by the notary of the aforementioned local governments
• d) at the judgement debtors' residence
• e) at the place of seizure
• f) at the place where the movable property is held in custody
• g) at other places designated by the bailiff

An auction is scheduled by the bailiff by means of an auction notice, in which the following is indicated:

• a) the names of the parties
• b) the place and time of the auction
• c) the movable property to be sold at the auction and the appraised value of such
• d) the place and date where and when the movable property may be inspected prior to the auction

Auction notices shall be delivered:

• a) to the parties, b) to the village, town, Budapest district clerk of competence based on the place of the auction.
• Auction notices shall be posted:
• a) on the court bulletin board
• b) on the bulletin board of court auction halls
• c) on the bulletin board of the village, town, Budapest district mayor's office competent for the place of the auction.

Auction notices shall be left posted on the bulletin board for at least 15 days before the auction and until at least the fifth day preceding the auction.

The bailiff shall publish the extract of the auction notice in the official journal of the Chamber. It shall contain the name and telephone number of the bailiff, the case number, description and appraised value of the movable property, and the place and date of the auction. The extract shall be published no later than on the fifth day preceding the auction.

The bailiff shall publish the auction notice in the register of electronic auction notices as well; the electronic auction system shall automatically remove such notice from the register of electronic auction notices on the day following the day of the auction.

If often happens that the movable property cannot be sold at the first auction. In such case, the bailiff schedules the second auction for a date within three months of the first auction.

Electronic auctions were introduced by Act XXXIX of 2008. The law restricts the range of movable property in respect of which electronic auctions can be used as the appraised value of the seized movable property must be at least HUF 100,000.

Operated by the Chamber, an IT framework system continuously accessible on the Internet is used for auctioning off movable and real property. Anybody who is registered in the system is authorised to take part in the auction. Registration can be made at any court bailiff. The registration fee for bidders is HUF 6,000, whilst deletion is free of charge. Obviously, the bidder who made the last published bid will be the winner of the auction.

2. The sale of movable property without auction

The bailiff may proceed to sell the seized movable property of the judgement debtor without auction.

At the parties' request, the bailiff sells the movable property without auction, but subject to the provisions of auction sale, to the buyer at the appraised value designated by the parties.

A sale without auction is possible until the start of the auction.

The Execution Act provides for the possibility of the bailiff selling the seized property without auction but subject to the provisions of auction sale. This can take place at the parties' request and to the buyer and for the appraised value designated by the parties. Accordingly, the bailiff does not choose this type of sale ex officio; instead, the parties exercise their right of disposal in regards to the sale. The bailiff may not deviate from the request presented by the parties.

In the case of traditional auctions, a sale without auction is possible until the start of the auction. In the event of an electronic auction, the movable property can be sold without auction until the automatic closure of the bidding log.