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),
• glossary.

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

Transferable securities and shareholder rights means securities or equity issued by corporate bodies under public law (for short-term securities) or private law.

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 incorporeal rights is governed by articles 59 and 60 of the Act of 9 July 1991 and by articles 178 to 193 of the Decree of 31 July 1992.

In accordance with article 59 of the act of 9 July 1991, "any creditor possessing a writ of execution confirming an established due and payable debt may arrange for seizure and sale of the incorporeal rights, other than receivable sums of money vested in his debtor".

The attachment operations

In this case, attachment is made of assets in third party custody.

Shareholder rights and short-term investments held by the debtor are attached at the company or corporate body issuing them (article 178 of the decree of 31 July 1992).

In the event of an attachment of a company's shares, the third party attached is the company concerned. In the event of an attachment of transferable securities, the third party attached is the organisation that holds the asset account.

The attachment is made by service of an instrument on the third party attached, providing the information required under article 182 of the decree of 31 July 1992 (the name and address of the debtor, an indication of the writ of execution under which the attachment is made, an order to reveal the existence of any pledges or attachments, etc.) and is otherwise void.

The debtor is advised of the attachment by process-server's writ within an 8-day time limit, the attachment being otherwise void. This process-server's writ will include the information required by article 183 of the decree of 31 July 1992, the writ being otherwise void.

The writ of attachment renders the incorporeal assets non-transferrable. They cannot therefore be disposed of nor be the subject of an attachment.

However, the debtor is allowed a period of one month to proceed with the sale of the attached assets.

A debtor who deposits a sufficient sum of money to satisfy the creditor can have the measure lifted.

The sale operations

In accordance with article 185 of the decree of 31 July 1992, "compulsory sale is undertaken at the request of the creditor on production of a certificate issued by the clerk of the court or drawn up by the process-server proceeding with the attachment, confirming that no objection has been lodged within the month following announcement of the attachment or, where applicable, of the court order rejecting the objection raised by the debtor".

A distinction must be made between the sale of listed transferable securities and the sale of unlisted shares and transferable securities:

• listed transferable securities: the debtor has one month as from receipt of service to proceed with amicable sale of the transferable securities. The proceeds of this sale will be used to satisfy the creditor. The proceeds of the sale cannot be disposed of while held by the authorised intermediary in order to be specially used to pay the creditor. If the sums are sufficient to satisfy the creditor(s), the surplus of the transferable securities attached will no longer be blocked (article 187 of the decree of 31 July 1992). Until the compulsory sale is completed, the debtor may indicate to the third party attached the order in which the transferable securities must be sold.

• shareholder rights and unlisted transferable securities: Amicable sale can be arranged. Otherwise, the sale will be made by adjudication. A specification is drawn up for the purpose of the sale. It will contain a summary of the past procedure, but also the details laid down by article 190 of the decree of 31 July 1992 (the company's Articles of Association, etc.).

A copy of the specification will be served on the company. Any interested person may submit comments to the person entrusted with the sale as to the contents of the specification for a period of two months as from service. Prior notice must be given of the sale in the press and, if necessary, by poster. This must be done not more than a month and at least a fortnight before the date fixed for the sale.

Only opposing or attaching creditors who have identified themselves before the sale will be allowed to enforce their rights against the sale price obtained (article 60 of the Act of 9 July 1991).

If there is more than one attachment, the proceeds of the sale will be distributed amongst the creditors who made an attachment before the 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.

This attachment procedure is laid down by articles 42 to 47 of the act of 9 July 1991 and 55 to 59 of the decree of 31 July 1992.

2. Attachment of funds held by third parties under ordinary law

Conditions

The attaching creditor must hold a writ of execution confirming an established matured debt.

The attached debtor must be the creditor of a third party (the attached third party).

The attached third party must be the debtor of the attached debtor. He must be bound by an obligation relating to a sum of money towards the attached debtor and hold the sums due to the attached debtor by virtue of proper, independent powers (banks, legal representatives of adults or minors lacking legal capacity, a notary or a lawyer).

Attachment of funds held by third parties can therefore apply to two different kinds of receivable:

• the debt giving rise to the attachment: this is the receivable of the attaching creditor against the attached debtor. It is therefore the sum that the debtor owes to the creditor. This is the debt that must be confirmed by writ of execution. It must, on the one hand, be established, i.e. stated in cash or appearing in a negotiable containing all the information for calculation (cf. File No. 1) and, furthermore, be due (cf. file No. 1).
• the debt concerned in the attachment: this is the receivable of the attached debtor against the attached third party. It is therefore the sum that the attached third party owes to the attached debtor. The debt concerned in the attachment is necessarily a receivable in cash (which should not be remuneration for work, which is subject to specific attachment). It need not be confirmed by writ of execution. Besides, the debt need not be established or matured.

The debt must exist at the attachment date. It must remain within the estate of the attached debtor. The debt must be attachable. Certain debts in the nature of subsistence cannot be attached (social security payments and social benefits generally, retirement pensions, etc.)

Mention should also be made of the existence of an attachment of funds against oneself which allows the attaching creditor to obtain personal custody of sums that he owes to the attached debtor.

Procedure

The attachment document 

The attachment document is a process-server's writ served on the third party and containing the information required under article 56 of the decree of 31 July 1992 (notification of writ of execution by virtue of which the attachment is made, an indication that the attached third party is personally bound towards the attaching creditor and that he is prohibited from disposing of the sums claimed up to the amount that he owes to the debtor, etc.) and is otherwise void.

This writ of attachment suspends prescription of the debt concerned in the attachment.

Under the terms of article 43 of the act, "The action of attachment implies immediate allocation, up to the amount of the sums for which it is issued, for the benefit of the person attaching the attached debt held in the custody of the attached third party and all accessory action. It renders the third party personally the debtor for the purposes of the attachment, within the limits of his obligation".

Consequently, if the amount of the debt concerned in the attachment exceeds the sums in respect of which the attachment is made, only the part corresponding to the amounts due is allocated.

The effect of immediate allocation has important consequences. In fact, it allows the attaching creditor to evade pro rata participation by any other creditors.

Under article 43 of the Act of 9 July 1991: "subsequent service of other attachments or of any other collection measure, even if made by privileged creditors, and the unexpected issue of a judgement giving rise to the opening of recovery or compulsory winding up proceedings will not jeopardise such allocation".

However, one exception exists: "writs of attachment served on the same day on the same custodial third party are held to be made simultaneously. If the available funds do not allow the entirety of the creditors thus attaching to be satisfied, they will be satisfied pro rata". (Article 43 of the said act).

Service of the writ of attachment results in non-transferability of the attached debt. Consequently, no payment can be made from the funds seized. In principle, despite the effect of immediate allocation, payment of the debt is deferred to the outcome of the attachment, unless the debtor agrees in writing to immediate payment to the attaching creditor.

Besides, non-transferability of this kind prevents payment to the attached debtor by the attached third party from the allocated sums attached. Consequently, a third party who fails to observe this prohibition will have to make a further payment, in this case for the benefit of the attaching creditor.

If the attached third party wishes to proceed with payment of what he owes and thereby to settle the debt, he will be able to require the sums to be deposited with a custodian appointed either by joint agreement or by the court.

Declaration by the attached third party

The attached third party is required on the spot to provide the process-server with the information laid down in article 44 of the Act of 9 July 1991 and to furnish him with supporting documents (article 59 of the decree of 31 July 1992).

Article 44 of the Act of 9 July 1991 provides that: "the attached third party is obliged to declare to the creditor the extent of his obligations towards the debtor and the circumstances that may affect them and, if applicable, transfers of debts, third parties instructed to pay his debt or previous attachments".

In the event of unlawful refusal by the attached third party, the latter will be ordered to pay the creditor the sums he is owed, on request and without prejudice to his recourse against the debtor.

The attached third party may therefore be forced to pay more than he owes if the debt is for a sum in excess of his own debt.

It should also be stressed that a third party attached in bad faith (incorrect or untrue declaration) is liable to have an order in damages made against him.

Notification of the attachment to the debtor

Such notification is intended to advise the debtor of the measure in order to permit him to put up a defence.

The attachment must be notified to the debtor within a time limit of 8 days by process-server's deed which will provide the information laid down by article 58 of the decree of 31 July 1992, being otherwise void. This eight-day time limit is mandatory, the attachment being otherwise null and void.

It is made on the initiative of the creditor.

The debtor is reminded in the same instrument that he can authorise the creditor in writing to obtain the sums owed to him by the attached third party without delay.

Payment by the attached third party

At this point, there is a difference according to whether objection is raised or not.

• If objection is raised within the time limit laid down, payment can be made only after the objection has been settled since the attached third party will proceed with payment only after being presented with a decision rejecting his objection. However the attached third party can proceed with payment if authorised to do so by the execution court for the sum that it will indicate.
• If no objection is raised, the attached third party may proceed with payment on production of a certificate issued by the clerk of the court or drawn up by the process-server who has made the attachment.

This certificate will guarantee the absence of objection within a month following notification of the attachment.

If the third party refuses payment of the sum required of him, the execution court will be competent to decide on the objection.

The objection may also be raised by the debtor, the attaching creditor, the attached third party or another third party (seeking, for example, transfer of the debt).

Objections

The execution court at the place where the debtor resides has jurisdiction in the point raised by the attached debtor or by the attached third party.

The objection must be lodged within a period of one month as from notification of the attachment to the debtor. It will be notified on the same day by registered letter with advice of delivery to the process server who made the attachment, being otherwise void.

The attached third party will be advised by ordinary letter.

3. 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

Recovery of subsistence pensions refers to the procedures allowing a creditor under a maintenance pension (a pension providing for sustenance) to have the sums owed to him paid.

Recovery may be direct (payment direct of the maintenance pension - A) or made through a public accountant (public recovery of maintenance pensions - B).

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.

Application of this procedure is laid down by Act No. 73-5 of 2 January 1973, as amended by an act of 11 July 1975 (concerning recovery of the contribution towards marriage expenses for which article 214 of the Civil Code provides) and decree 73-216 of 1 March 1973.

In fact, third party debtors for due and payable sums towards a subsistence pension debtor may pay the creditor of the said pension direct by means of the direct payment procedure.

The creditor may implement this procedure towards any third party debtor for wages, the proceeds from work (e.g. his debtor's employer) or other income, and also towards any depositary of funds.

Since a subsistence pension will not have been paid at the due date, the request for direct payment, backed up by a final decision of a court, is admissible.

This procedure applies to future instalments (i.e. the sums payable in advance) of the subsistence pension and to past instalments (i.e. sums to be settled at the start of the next month) for the last six months passing before the demand for direct payment is notified.

The scope of this procedure is fairly wide. In fact, it covers both cases where a divorced or separated spouse is the creditor of a service in the form of an annuity referred to in Article 276 of the Civil Code (article 7.1 of the act of 1973). Besides, the decree of 1 March 1973 and especially article 7 thereof applies to recovery of the contribution towards marriage expenses laid down by Article 214 of the Civil Code.

Procedure

The creditor for a subsistence pension may instruct any process-server at the place where he resides to serve the demand for direct third party payment on third party debtors for due and payable sums towards the debtor of the pension (Article 1 of Act No. 73-5 of 2 January 1973).

To do so, the creditor will produce all documents attesting that a court by final decision has ordered the debtor to pay a pension and that the pension has not been paid when due.

The process-server will make service on the third party debtor by registered letter, with advice of delivery, within the next eight days. In accordance with Article 1 of the decree of 1 March 1973, the third party debtor will confirm receipt within 8 days following service, indicating whether or not he is in a position to deal with it.

In addition, the process server so advises the debtor "simultaneously" by registered letter.

This request implies gradual allocation to the creditor of the sums concerned, as they become payable.

The third party debtor must pay the sum directly to the creditor's official or residential address, doing so at the due dates laid down by the court. On default, the third party debtor may be ordered to pay a penalty that can be doubled if the offence is repeated.

In addition, it should be noted that the debtor may before a court approached with a request for a subsistence pension agree to the pension being paid direct. In those circumstances, it will indicate the third party debtor charged with payment.

The excerpt from the judgement confirming agreement between the parties will then be notified to the third party debtor in accordance with the rules laid down in article 1 (1) and (2) of the decree of 1973.

The charges for direct payment of a subsistence pension will be borne by the debtor.

Incidental points

In the event of objections concerning the direct payment procedure, the competent court is the District Court at the place where the debtor for the pension is domiciled, without prejudice to any action aimed at reviewing the subsistence pension.

The obligation on the third party to pay the sums due to the creditor direct is not suspended by confirmation of the direct payment procedure.

The request for direct payment will be amended ipso jure by a new decision altering the amount of the subsistence pension or the basis for executing the obligation, this applying as from notification to the third party of the amending decision.

End of the procedure

The direct payment procedure ends:

• on notification by the creditor's process server by registered letter to the third party of lifting [of the attachment];
• at the debtor's request on production of a certificate issued by a process-server confirming that a new judgement has terminated the subsistence pension or confirming that by virtue of the legal provisions the pension has ceased to be payable.

The third party debtor is required to advise the creditor of the subsistence pension within eight days of termination or of suspension of the payment and of closure of the debtor's account or the inadequacy of funds on this account.

On failure of the direct payment procedure, the creditor may have recourse to public recovery of the subsistence pensions in accordance with the act of 1975.

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.

Under Act No. 75-618 of 11 July 1975 and the Decree No. 75-1339 of 31 December 1975, public recovery of subsistence pensions is possible only if the methods of execution under private law have failed.

The procedure

The procedure is brought by an application by the creditor for recovery, sent to the Public Prosecutor at the District Court in the district in which he is officially resident.

The creditor must show proof that exercise of a method of execution under private law has produced no result.

This application will in particular include confirmation from the clerk of the competent court or by a process-server certifying that no means of execution under private law has enabled the subsistence pension to be recovered.

Once the application has been lodged, the creditor may no longer bring other proceedings aimed at recovering the sums to which the application refers.

Furthermore, the Public Prosecutor will by ordinary letter advise the creditor of the subsistence pension that the application has been made.

Should the Public Prosecutor accept the request, he will by registered letter with advice of delivery, confirmed on the same day by ordinary letter, advise the debtor that he is granting the creditor's request for public recovery and will advise him that he can further discharge the debt only with the public accountant, by the arrangements for payment of which he will be notified in due course.

The Paymaster-General will receive an enforcement statement issued by the Public Prosecutor. The Paymaster-General will then pass it to the Public Accountant for the official or residential address of the debtor, for recovery.

The departments or services of the State and public authorities, the social security bodies and the organisations undertaking management of social services must obtain the information that they hold or may hold to the accountant at the Public Treasury, which will subsequently be useful in implementing the public recovery procedure.

Incidental points

The Presiding Judge at the Regional Court has jurisdiction in disputes submitted to him by the Public Prosecutor.

The procedure is free of charge and exempt from stamp and registration duty but the dispute will not suspend public recovery.

End of the procedure

Should it prove impossible to recover the debt confirmed by the public accountant or if the debtor dies, the Treasury Accountant will send the writ of execution to the Public Prosecutor who, on the one hand, will terminate the public recovery procedure and, on the other, grant the public accountant discharge. The creditor for the subsistence pension will be entitled to waive the public recovery procedure. To do so, he will send his application to the Public Prosecutor who, on the one hand, will terminate the public recovery procedure and, on the other, grant the public accountant discharge.

Further default by the debtor

If the delay in payment exceeds one month and the debtor ceases to pay the subsistence pension within a period of two years from suspension of recovery, the creditor may again ask the Public Prosecutor to implement the public recovery procedure, doing so without again resorting to a means of execution.

Should this new request be upheld, recovery of all sums will be undertaken as from the suspension of public recovery.

Creditor's liability

The Presiding Judge at the District Court may impose a civil penalty on the subsistence creditor if he has acted in bad faith and repay certain sums to the debtor, without prejudice in damages.

The order imposing a civil penalty on the subsistence creditor or for repayment of increases and expenses may be appealed within fifteen days following notification. The appeal must be lodged by registered letter with advice of delivery, addressed to the Public Prosecutor and will otherwise be void.

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.

Definition

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

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.

The procedure for attaching pay is governed by articles L.3252-1 to L.3252-13 of the Labour Code and articles R.3252-1 to R.32252-49 of the said Code.

1. Scope of the procedure for attaching pay

By virtue of article L. 3252-1 of the Labour Code, this attachment applies "to sums due by way of pay to all wage-paid persons or those working in any respect whatever and wherever that may be, for one or more than one employer, whatever the amount and the nature of their pay or the form and nature of their contract".

Pay for all persons pursuing a liberal profession or receiving copyright is therefore excluded.

Within the framework of this procedure, sums attached must be in the nature of pay. Salaries and wages strictly speaking and accessory income (benefits in kind, overtime, etc.) can therefore be attached.

Following a decision given by the Plenary Assembly on 9 July 2004, it has been established that the attachment of pay applies "whether or not the contract of employment is in the progress of execution", which means that the attachment must, in particular, be able to include holiday pay and payments made in lieu of notice.

The debtor's salary and wages cannot be attached in their entirety. In fact, article R.3252-2 of the Labour Code provides for attachable portions of income. These thresholds are reviewed each year in relation to the trend in the prices index. Increases in the thresholds are available to persons with social commitments. To permit the debtor to meet his fundamental requirements, the Labour Code states that in all cases a sum equal to the monthly amount of monthly income from active working for a single person (i.e. € 466.99 in 2011), will remain at his disposal. This sum is non-attachable, even in order to recover a subsistence pension.

2. Procedure

Conciliation: a mandatory prior step

The procedure for attaching pay takes place before the district court.

The procedure is preceded by attempted conciliation, being otherwise void.

A creditor holding a writ of execution establishing a due and payable debt will approach the district court with an application lodged with or addressed to the clerk. This application will include the information laid down by article 58 of the Code of Civil Procedure, being otherwise void.

A copy of the writ of execution is appended to it.

The clerk advises the claimant of the place, day and time of the attempted conciliation, either orally against issue of notice of receipt, or by ordinary letter. The debtor is similarly called.

The parties must be called at least a fortnight before the date of the conciliation hearing, in order to leave sufficient time to ensure a defence.

At the hearing, the court attempts to conciliate between the parties. A composition terminating the attachment procedure may be agreed.

Except where there is good reason for referring the matter to a subsequent hearing, the court may ex officio declare the convening notice lapsed if the creditor fails to appear.

Failure by the debtor to appear does not affect the attachment. Attachment will continue unless the court feels that the debtor requires a new hearing.

On failure of conciliation between the parties, the court will verify the amount of the debt, including principal, interest and expenses, so that attachment can be proceeded with.

It will settle any objections raised by the debtor.

Attachment procedure

The chief clerk will proceed with the attachment within eight days, issuing an attachment order.

If the conciliation hearing has resulted in a judgement, the eight-day period will start to run on expiry of the time limits for an appeal against the judgement.

The attachment document issued by the clerk includes:

• identification of the debtor and creditor;
• an individual account for the sums for which the attachment is made, including matured principal, expenses and interest, and indicating the interest rate;
• the method for calculating the non-attachable portion and the basis on which it is applied;
• an order to the clerk to make the declaration laid down by article L. 3252-9 of the Labour Code within a fortnight.
• a recital of articles L.3252-9 and L.3252-10 of the Labour Code.

The attachment order is served on the employer by registered letter with advice of delivery. The attached debtor will receive a copy by ordinary letter, indicating that on a change of employer the attachment will continue with the new employer.

Within a fortnight at the latest as from service of the attachment order, the employer must submit the following information to the clerk:

• the legal status existing between itself and the attached debtor,
• the transfers, attachments, notice to third party holders or direct payment of subsistence due during execution.

On failure to pay, the district court may on the one hand order the attached third party (the employer) to pay a civil fine without prejudice to an order in damages and, on the other, declare it debtor for the withholdings that should have been made, and the court will come to a decision on the information at its disposal.

Provided that the contract of employment between itself and the attached debtor is maintained, the employer (the attached third party) is required to pay the withholdings every month for which the attachment is made. These sums are paid to the clerk. They correspond to the attachable portion of income.

Payment is made by cheque in favour of the attaching creditor, as instructed by the latter. The clerk will send the cheque to the creditor or its agent as soon as it is received, noting it on the file.

On failure to act, the employer will be declared personally liable by order made by the district court.

If no objection is lodged within a fortnight following notification, the order becomes final and is enforced by the first mover.

The attachment will be lifted either by agreement with the creditor or when the court ascertains settlement of the debt. Whatever the circumstances, the employer will be notified within eight days.

Following lifting of the attachment, the employer will have a right of recourse to obtain a refund of the sums paid.

It should also be noted that where there is more than one employer, the district court must decide which of the employers is required to make the withholdings. If one of them is able to pay the full amount of the attachable portion, the attachment may be made against it alone.

More than one creditor

Provided that they hold writ of execution, all creditors may participate in the procedure in progress to attach pay. This possibility enables them to participate in the distribution of the sums attached without having to proceed with a prior conciliation attempt.

Points arising

Notice to a third party holder

In accordance with the Procedural Book of the Tax Code, the attachment procedure is suspended on service on the employer of a third party holder notice (a procedure allowing the Public Treasury to seize cash receivables that taxpayers possess against third parties, up to settlement of the payor's obligation.

The attached debtor must as a priority settle its debt to the Public Treasury but it should be noted that direct payment procedures for subsistence pensions take precedence.

The employer will advise the public accountant of the attachment in progress. The latter will advise the clerk of the court of the date of the notice to the third party holder and that of notification to the payor.

The attachment operations will be resumed only after the payor's debt has been settled. On being informed by the public accountant, the clerk will advise creditors accordingly.

Direct payment demand for a subsistence receivable

On a direct payment demand for a subsistence debt being served on it, the employer must pay the debtor the portion of the salary corresponding to the fully non-attachable part of the salary or wage. The sums due will be paid to the subsistence creditor.

In addition, the employer will continue with payment to the clerk of the attachable portion of pay after setting off the sums paid to the subsistence creditor.

Termination of the contract of employment

When the contractual relationship between the debtor and employer comes to an end, the employer will advise the clerk accordingly as the withholdings can then no longer be made.

The funds held by the imprest holder will then be distributed.

As stated above, on a change of employer the attachment may be continued against the new employer. In that case, there is no need to proceed with prior conciliation.

However, the creditor must so request within a year following notice given by the former employer. Otherwise, the attachment will end and the funds will be distributed.

Change of address

The clerk must be informed of the creditor's change of address. However, if the creditor has acted through an agent (and the agent has therefore been chosen as the address for service), there is no need to advise the clerk.

If the debtor changes the place where it resides to outside the area of the district court where proceedings have been brought, without, however, a change of employer, the court concerned remains responsible for the procedure.

Third party holder notice

1. in short

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.

Definition

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

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.

The third party holder notice applies to any receivable of a tax nature (direct and indirect taxes, customs debts, etc.).

2. in practice

Proceedings

Within the framework of this procedure, the services of a process server are not required.

Receipt by the attached third party of a registered letter with advice of delivery issued by the public accountant suffices to initiate the procedure.

Implementation of the measure is then notified to the debtor, being otherwise void. The debtor will then benefit from a two-month period to lodge an objection.

The Public Treasury and private creditors are in the same situation; none of them is privileged. Consequently, the receivable is dealt with in ordinary course. The position where third party holder notice would be served on the attached third party on the same day as the attachment notice is the only case where private creditors can act jointly with the Public Treasury.

At the end of the two-month period offered to the debtor in which to object or after any objections had been rejected, the third party must pay the Public Treasury.

Competent court

The execution court must be approached with points concerning the proper nature of the execution procedure. On the other hand, where an objection concerns the receivable on which proceedings are based, the administrative court will have jurisdiction.

Effect

Notice to a third party holder has the immediate effect of transferring the receivable seized to the Public Treasury up to the amounts payable by the defaulting debtor.

Glossary

• Adjudication: an operation aimed at selling seized property by public auction to the highest bidder.
• Third party holder notice: a procedure allowing the Public Treasury to seize cash receivables that taxpayer possess against third parties
• Lapse: sanction concerning an action that was initially valid but the full effect of which depended on a subsequent event that has not come to pass
• Shareholder rights: shares issued by civil-law and commercial companies other than joint stock companies
• Assignment bill: a bill resulting in assignment, in particular of a right to a person
• Transferable bill: a bill that transfers a share from a holder to another holder
• Non-availability: a state where a person is unable to dispose of his assets or of a property
• Lifting: removal of a block or an obstacle to a right to undertake an action or to exercise a right
• Pledge: security based on property intended to guarantee an incorporeal right
• Notification: an action aimed at advising a person of a procedural action either through a process-server (service) or by post
• Avoidance: sanction of a legal document tainted with a defect of form (e.g. failure to discharge a formality) or an inherent defect (e.g. failure of capacity to proceed at law).
• Company share: share in the capital of an undertaking, acquisition of which confers shareholder status and therefore the right to participate in the life of the company and share in its profits
• Prescription: a means of acquiring or extinguishing a right after a certain period of time has lapsed
• Ordinary course: in this case it means the order in which attaching creditors apply ("first come, first served")
• Administrator: the person who administers or manages
• Sequester: deposit comprising the lodging with a third party and within its custody of a disputed article until a case has been settled
• Service: notification undertaken by a process server comprising the lodging of a procedural deed with its addressee
• Subrogation: the opportunity offered by a creditor to take the place of another, non-performing creditor in execution proceedings
• In advance: payable in advance
• In arrears: payable at the start of the month following
• Transferable securities: securities issued by corporate, public or private bodies and which in view of their origin are negotiable on a stock exchange