The Essence of the Service: Who Gets Paid First
When the property of one debtor is simultaneously pursued by several creditors, the distribution of the proceeds of realization depends on the rules of priority of enforcement. In Georgia this field is regulated by Article 54 (multiple seizure and the priority of enforcement of monetary claims), Article 56 (the distribution order of seizure on claims) and Article 57 (the effects of seizure) of the Law on Enforcement Proceedings. It follows from these norms that the winner is often not the holder of the largest claim, but the creditor who registered the seizure in time or secured precedence in the order of priority.
This page explains how priority is determined in cases conducted by different executors, what significance the time of registration of the seizure carries, how seizure is placed on claims — including salaries — and what rights a creditor has in a dispute.
Multiple Seizure and the Order of Enforcement
Under Article 54 of the law, property may simultaneously be seized for the benefit of multiple creditors, and property already under seizure may subsequently be seized for the benefit of another (subsequent) creditor. If the first seizure on the property was placed by another executor, that executor must be notified of the registration of the seizure.
Where monetary claims under several enforcement sheets against one debtor are enforced by different executors, the realization by auction or otherwise of the same property of the debtor is carried out by the executor who first registered the seizure in the corresponding registry: for weapons and vehicles — with the corresponding organ of the Ministry of Internal Affairs; for a civil aircraft — in the state registry of civil aircraft; for an ultralight aircraft — in the registry of ultralight aircraft; for a sea vessel — in the state registry of ships of Georgia; for a security — with the corresponding operator of the registry of securities; and for other property — in the public registry. The order of enforcement is determined by the time of registration of the seizure on the property — hourly and minutely. In the compulsory enforcement of an order for the payment of arrears, the seizure is deemed to have been placed by the executor from the moment of the commencement of the enforcement proceedings.
The registration of a seizure takes place directly on the basis of the document (act) confirming the placing of the seizure, its electronic copy, or an application of the National Bureau of Enforcement. If the realization of the property is suspended on grounds provided for by law, the enforcement against that property for the benefit of the next creditor is continued by the executor whose seizure is registered next in order, and the executor of the next creditor is immediately notified of the suspension.
Seizure of Claims: Salaries and Receivables of Third Parties
Where a claim — for example the debtor's salary or a monetary claim against a third party — must be seized, the National Bureau of Enforcement issues, on the creditor's application, a distribution order on the placing of a seizure (Article 56). The order must indicate the basis of the creditor's claim, the claims to be fulfilled, and the person against whom the claim is directed — the assigned person. Together with the placing of the seizure, an order on payment to the creditor is issued.
The order must be handed to the assigned person and sent to the creditor and the debtor. Upon its transfer to the assigned person the seizure becomes effective within the limits of the creditor's claim: the debtor may no longer dispose of the claims, and the assigned person may no longer perform an act constituting the content of the obligation; the seized amount must be paid by the assigned person to the creditor. The order may simultaneously extend to the part of the claim that will become enforceable in the future, and a seizure placed on a salary or similar regular income extends also to the amounts payable after the seizure was placed.
The Effects of Seizure and the Creditor's Paths of Dispute
The seizure order entitles the creditor to demand of a third party the performance, in the creditor's favor, of such an act as the third party owed to the creditor's debtor (Article 57). The order remains in force even if it was erroneously issued in favor of the assigned person against the debtor, until it is canceled and the cancellation becomes known to the assigned person. The debtor is obliged to provide the creditor with the information and existing documents necessary for initiating the claim, and the creditor may obtain them through compulsory enforcement. Finally, on the basis of the seizure order the creditor has the right to bring an action in court against the assigned person — this is the instrument by which the creditor defends its place in the order of distribution.
Frequently Asked Questions
What determines who realizes the property in cases conducted by several executors?
The executor who first registered the seizure in the corresponding registry. The order of enforcement is determined by the time of registration of the seizure — hourly and minutely.
Can the same property bear several seizures?
Yes. Property may simultaneously be seized for the benefit of multiple creditors, and a subsequent creditor's seizure may be added later; if the first seizure was placed by another executor, that executor is notified of the registration.
How is a seizure placed on a salary?
On the creditor's application the Bureau issues a seizure order which is handed to the assigned person; thereafter the salary amounts are paid to the creditor, and the seizure extends to future amounts as well.
What should the creditor do if the assigned person does not pay?
On the basis of the seizure order the creditor may bring an action in court against the assigned person; in addition, the creditor may obtain through compulsory enforcement the information and documents needed to initiate the claim against the debtor.
How We Help on Legal.ge
Winning a priority dispute turns on details: the time of registration, the correct registry, a timely distribution order. On the Legal.ge platform you can find an experienced enforcement law lawyer who will help you conduct the seizure and registration procedure properly, obtain the distribution order on claims and, where necessary, prepare an action against the assigned person. Choose a specialist and secure your proper place in the order of creditors.