An intangible asset is an asset that does not have any material existence. It is an indefinable item of property (e.g. a sum of money).

In Luxembourg, there are two ways in which intangible assets can be seized.

• (I) Garnishment under ordinary law
• (II) Attachment of earnings (wages, rent, pensions)

Garnishment under ordinary law

Garnishment is an action by which a creditor (the garnishment creditor) freezes money which belongs to the debtor (the garnishment debtor), and which is held by a third party (the garnishee). The creditor then takes delivery of these sums up to the amount the debtor owes.

In other words, the action makes it possible for the obligation (concerning a sum of money), which the debtor (garnishment debtor) has over another debtor (the garnishee), to be assigned to the creditor.

1. Definition

Garnishment is an action by which a creditor (the garnishment creditor) freezes money which belongs to the debtor (the garnishment debtor), and which is held by a third party (the garnishee). The creditor then takes delivery of these sums up to the amount the debtor owes.

2. Conditions

An application for a garnishment must meet the following conditions:

• the creditor must hold a public or private document of entitlement or an authorisation to seize assets granted by way of an ex parte order; and
• the creditor's debtor (the garnishment debtor) must be a creditor of a third party (the garnishee).

3. The seizure

The seizure takes place by serving a garnishee nisi on the garnishee who is then bound not to dispose of any sums owed or which will be owed to the garnishment debtor.

The debtor is then given formal notice of the garnishment, specifically to enable the debtor to defend the action. This document will also contain a declaration of validation of the garnishment.

This notice of a garnishment will then be served on the garnishee (third party notice).

Once these formalities have been complied with, the garnishee will make the payment. How the payment is made will depend on whether or not an objection is made.

4. The effects

The garnishment has the effect of immediately allocating the sum to the garnishment creditor who therefore takes precedence over any future creditors' arrangement.

Furthermore, the garnishment means that the sums seized cannot be disposed of, and they cannot be used to make any other payment.

Attachment of earnings

Attachment of earnings is a procedure that enables the creditor to seize "at source" the sums owed to the debtor.

1. Definition

This procedure enables the creditor to seize sums of money owed by the debtor directly from the debtor's employer.

2. The seizure

This procedure only applies to wages. It only applies to the attachable portion of the wages.

The court manager will notify the employer of the attachment. The debtor then receives of copy of this notice.

The employer is then obliged to pay the deductions covered by the attachment every month. These sums are paid directly to the creditor.