Prejudgement seizure

Prejudgement seizure

Debt collection in The Netherlands

It has always been fairly easy in The Netherlands for a creditor, even before the court has ruled in a legal action that there is a (due and payable) claim, to have assets of his debtor seized. This is called a prejudgment seizure. After the court has ruled, granting the claim, the creditor can recover his claim from the seized property.

Seizing assets of a Dutch debtor

All the debtor’s property can be seized: movable property (such as a fleet of cars, inventory or – under strict conditions – trading stock), real estate, but also all other rights (such as claims). For example, a bank balance is no more than a claim by the account holder on the bank for the bank balance. Regular payments, such as wages or rent, can also be seized. Especially in cases where it is known that valuable assets (such as a house with surplus value) is to be sold, and the owner still has an outstanding debt, prejudgment seizure is an advisable step. In this way, the creditor will still have security for payment. In practice however, seizure is often used, not just as a means to gain security, but also as leverage. A focused and well-timed seizure of a bank balance, or of the money owed by a large customer to a creditor, can paralyze the debtor’s business. In such situations, the debtor will often choose to pay the creditor to prevent further problems.

Seizure is simple in The Netherlands

On behalf of the creditor, the attorney submits an application (possibly with documented proof) to the interlocutory court. This application states what the creditor is claiming, and the background of the claim. That application has to be properly substantiated, also to prevent a seizure being lifted simply with collection interlocutory proceedings. In almost all cases, the creditor is not heard and the court grants leave, within several hours or days, for the seizure. With that court permission, the bailiff can often impose the seizure on the same day.

Dutch lawyer drafting seizure application

Because the debtor does not have to be heard in the seizure application, often he is only confronted with this after seizure has taken place. The debtor can therefore legally claim lifting the seizure in interlocutory proceedings. Such proceedings are often handled within a short period of time. In these proceedings in principle the party on whom the seizure was imposed has to show that the seizure was wrongful, for example because the alleged claim by the creditor does not exist, or because the seizure is unnecessary as the creditor gave security in another way.

Wrongful seizure in The Netherlands

If the court finds eventually that the claim for which prejudgment seizure was imposed does not exist, the seizure was (in hindsight) unjustly imposed: this is wrongful seizure. Wrongful seizure compels the seizing party to pay the damage that the person on whom the seizure was imposed has suffered. The issue is, of course, what that damage has been: if a residence was seized, but the party could continue living normally in this house, mostly the seizure caused no damage at all.

Collecting a debt in The Netherlands

Each debt collection attorney of law firm AMS in Amsterdam has imposed seizure many times, on all possible types of assets, and is fully experienced in seizures and in conducting proceedings for lifting seizures. If you want to know more about our legal services, please contact us, free of charge and obligation.