Many clients ask us as their Romanian lawyers how they can recover the money and enforce a Romanian judgement that they have obtained against a Romanian debtor. A judgement is all well and good, but not if you cannot recover the money due to you. Fortunately, the Romanian Civil Procedure Code includes provisions for Foreclosure Proceedings whereby a creditor can recover from his debtor monies due by initiating foreclosure proceedings.
Article 781 para. 1 of the Code of Civil Procedure provides that in such cases foreclosures are the seizure of money, securities or other intangible movable property traceable as owned and due to the debtor or held in the name of or by a third party or which the latter will owe in the future, under existing legal relationships to the debtor. Also, under the provisions of art. 733 para. (1), the debtor’s movable tangible property held by a third party on his behalf may also be seized.
There will therefore be situations in which a company, or individual, involved in a relationship with another company or through an employment contract concluded with a natural person, is summoned by a bailiff to state and record and retain sums of money due to the debtor that are held by such third party up to the amount of the debt to be recovered are paid the our creditor client, instead of being paid to the debtor.
So, if you owe or have owed in a short period of time a sum of money to a person who is subject to the forced execution procedure, the bailiff, based on the information he receives following enquiries will send a seizure notice to you.
Once this notice has been communicated then the person to whom it is delivered is obliged by Article 787 of the Civil Procedure Code to do certain acts. They must within 5 days from the communication of the seizure notice advise the bailiff what sums of money they hold and in case of money due in the future advise the amount of money that they hold or may receive in the future and to send proof of such sums to the bailiff as well in case of seizure established for the realization of other receivables. If the sums that are due are because of maintenance or child allowance, as well as compensation for damages caused by death, injury to bodily integrity or health then these sums must be paid to the creditor directly and notto the bailiff.
If there are several claims against the debtor’s assets then the seizure is based on the amounts available to the creditors. There are different rules which apply to intangible property which is subject to the seizure and these must be clarified depending on the nature of the goods held by the third party.
In short, if a request is received from a bailiff by a third party then that third party has two possibilities.
If the third party has funds in their accounts to the credit of the debtor then they must pay them within a maximum of 5 days from the receipt of the notice from the bailiff into the account indicated by the bailiff. They must pay either the amount that they owe to the debtor (if it is less than the debit shown in the notice) or the amount shown in the notice (if the debit is more than the amount specified in the notice. Any excess balance can be paid to the debtor in the normal way.
If no monies or debt exist in the third parties’ hands then they must advise the bailiff of this fact within a maximum of 5 days from the receipt of the notice address and provide proof of these facts.
The sanction which arises because of non-compliance with the mentioned obligations above is that against the company who has had a notice served upon them is that it is possible for the creditor to introduce a request before the courts for validation of the seizure. Once the request is admitted and the seizure is validated, the third-party company will be forced to pay the amount he owes to the debtor directly to the creditor.
Even if the debt does not exist and no monies are held by the third party and a summons is received from the bailiff to which no answer will be formulated, there is a risk of being sued in a seizure validation file. Once the summons procedure in the court file has been legally fulfilled, the party summoned in the process as a third party who has assets of the debtor then during the validation process they will have the opportunity to show that on that date they do not owe any amount of money to the debtor.
However, to avoid an expensive lawsuit when we are consulted by clients as the Romanian lawyers involved our recommendation is always to respond to the bailiff’s summons in both above situations to protect their position and not become involved in any further dispute.
The third party who in bad faith refused complying with the bailiff’s request, can also receive a fine from the court through the validating decision.
It will be seen from the above that there is a method whereby a creditor can recover by an enforcement procedure in Romania a debt where the debtor is reluctant or unwilling to pay their debts. This method of enforcement is used frequently and successfully especially where a debtor tries to delay or even avoid payment.
This is a further example of how the Romanian system is working within the rule of law to become a modernfriendly financial society where investors in Romania can rely upon the law and the court system.