Debt Collection in The Netherlands – Provisional seizure of assets

Debt Collection in The Netherlands – Provisional seizure of assets



If your client wishes to collect a claim in The Netherlands, but does not yet have a (foreign) verdict, there are several options for him. In this article, Sonia Beedie of Pellicaan Advocaten will elaborate on the option of provisional seizure of assets pending a judgement.

Presuming the Dutch court is competent with regards to a certain legal dispute, there is a possibility to secure opportunities to recover a claim without having to wait for a judgement in proceedings on the merit of a case. In other words, you can freeze certain assets of a debtor before going through a lengthy and costly debt collection procedure. Especially if there is a reasonable fear that the debt may be irrecoverable as soon as the debtor has been served with a summons, it can be wise to take such provisional measures first.

Procedural requirements

To provisionally attach certain assets, a relatively simple and fast petition procedure is prescribed by law. In this procedure, which in principle solely takes place on paper, the court is asked to give permission for prejudgment attachment. Notwithstanding a couple of exceptions, the debtor does not have to be informed of this and the court will decide on the petition without hearing a defense. The petition must briefly summarize the (alleged) claim and include evidence thereof, it must state which assets are to be frozen and – depending on the type of asset you wish to attach – it must also explain why there is reasonable fear of embezzlement of these assets. Finally, it must also be made clear why these specific assets should be seized and the petitioner will have to substantiate that there are no other, less imposing, measures which could lead to the same result (namely securement of recovery). The duration of this procedure (from filing the petition to receiving the permission from court) only takes 1 to 2 days. The court fees are roughly no more than € 700 and the lawyer fees are relatively low in comparison to other types of procedures.

Once you have obtained permission from court to freeze certain assets, the bailiff can be instructed to do so. Usually, the bailiff will have already been informed of the intent to seize beforehand so he can often act the same day as the court decision. The debtor will then be informed by the bailiff of the attachment thereafter. The court will also set a timeframe within which the summons for the proceedings on the merit must be served. Pending the entire duration of these main proceedings, the assets will remain attached and therefor frozen.

Which assets?

If your client knows which (Dutch) bank is used by his debtor, this is usually the most effective attachment to impose. All funds which the bank is holding for the debtor at the time of seizure are frozen, regardless of the claim amount. This can have a considerable impact on an organization and often leads to settlement negotiations as the debtor will wish to have the attachment lifted quickly and will not want to wait until the verdict has been given in the main proceedings, as this can easily take up to a year or more. Another possible outcome of this attachment is that the debtor will propose to furnish adequate security in exchange for lifting it, for example by means of a bank guarantee or transferal of sufficient funds for recovery to a third party (trust) account.

A second effective asset to choose for provisional attachment could be claims of the debtor on third parties. If your client knows of for example clients of his debtor or other third parties who are expected to have to pay the debtor a sum of money shortly, it can be a good idea to seize these claims before payment is made. Again, this will lead to a freezing order, and the party who must pay your clients’ debtor is not allowed to do so for the duration of the proceedings on the merit.

Lastly, public registers can be consulted to see if there is any real estate worth seizing. Especially if there is knowledge of an intended sale of certain real estate assets in hands of the debtor, this type of seizure can also be quite effective and in some cases force a settlement or provision of substitute security.

Counteraction to lift

Although this all seems like a very easy way to force a debtor into payment of a claim, please be beware that there is a safeguard against abuse of this procedure. The attachee may ask the court who gave the permission to seize to lift it, on the grounds that the claim is prima facie invalid. This can lead to liability of the attaching party. However, it is not often concluded by the court that a claim is evidently invalid, especially not if the claim was substantiated by sufficient evidence.

Transition from provisional to executory

As soon as a court has ruled in the main proceedings on the merit, the provisional seizure will automatically become an executory seizure. This means that with the verdict, regardless of whether or not the defendant has appealed, the attachment can be enforced and for example seized bank assets will have to be paid out to the sum of the allocated claim including costs and interest. Some caution is appropriate if the defendant has appealed, as a negative outcome for your client in appeal can lead to liability of the attaching party, especially if irreversible measures have been taken such as foreclosure of property. It can therefore sometimes be wise to leave the attachment on assets during an appeal case, without enforcing actual execution.

In conclusion, provisional seizure can be a very effective means of stimulating defaulters to pay or to set negotiations in motion, or of securing recovery of a claim for your client. For more specific information on this subject, Sonia Beedie would be pleased to provide further advice and assistance.

Sonia Beedie

Pellicaan Advocaten



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