Realization of Attached Property and the Debtor’s Role
The Law of Georgia on Enforcement Proceedings sets the general rule for the realization of attached property: other attached items are sold by the National Bureau of Enforcement publicly at auction, and the amount received from realization, or the amount paid by the debtor, less the fee and the enforcement costs, is transferred by the Bureau to the creditor. Yet the law also gives the debtor an active position: it is precisely the debtor’s initiative and agreement with the creditor that can become the channel through which the property is sold in a format more favourable to the debtor than a public auction. Using these opportunities properly requires exact knowledge of the deadlines and conditions.
It is important to understand that realization is a single process: it is preceded by the description and appraisal of the property, and the sale stage follows. The debtor’s legal interest is protected at each step of this process — from the accuracy of the appraisal to the choice of the sale format. Missing one stage can foreclose the options available at the next, which is why early legal assessment of the file matters.
Appraisal of the Property and the Expert Conclusion
At the time of the description of the property, where it is possible to determine its market value, that value is recorded in the act of description and attachment. If determining the price at the description is impossible, the property is appraised after the registration of the attachment by the National Bureau of Enforcement or, on the Bureau’s instruction, by another competent person.
A party to the enforcement proceedings has the right, at the start of the proceedings or before the Bureau appraises the property, to submit an expert conclusion on the market value, under which the property was appraised within the 6 months preceding the start of the proceedings. The Bureau is authorized to rely on the conclusion submitted by a party; where conclusions have been submitted by both parties, the Bureau relies on one of them, and it decides for itself the expediency of admitting the submitted conclusion. In addition, in the context of the collection of tax arrears, where the property was appraised within 1 year before the start of the enforcement proceedings, repeated appraisal is not mandatory. This means that the debtor must begin preparing for a valuation dispute already at the appraisal stage.
Realization by the Debtor Itself
One of the most practical options for the debtor is the sale by its own efforts: the National Bureau of Enforcement may, before the public announcement of the auction, give the debtor the opportunity to realize the property itself, under the Bureau’s control. This is allowed only where the realization covers the fee, the enforcement costs and the creditor’s claims.
The value of this mechanism is that the debtor finds the buyer itself and typically obtains a better price than an auction would produce. At the same time, the law preserves an instrument for the Bureau: before or after the realization of movable items, the Bureau may remove the attached item from the debtor’s possession. The decision to seek self-realization must therefore be timely — applying before the announcement of the auction is the decisive condition of the whole route.
Other Realization by Agreement of the Parties
The third channel rests on the agreement of the parties: where the creditor and the debtor agree, on the basis of their application and before the public announcement of the auction, the National Bureau of Enforcement may determine that the attached property be realized otherwise than established by the law. This means the debtor and the creditor can jointly agree on the sale format — for instance, a direct sale to a specific buyer — and submit that application to the Bureau before the auction is announced.
The practical success of this option depends on three conditions: the creditor’s consent, the written form of the application, and timeliness. All three are assessed legally at the moment before the auction is publicly announced; after that, changing the format by lawful means is no longer possible.
Frequently Asked Questions
Can the debtor sell the property itself before the auction?
Yes — the National Bureau of Enforcement may, before the public announcement of the auction, give the debtor the opportunity to realize the property itself under the Bureau’s control, provided the realization covers the fee, the enforcement costs and the creditor’s claims.
Within what period may an expert conclusion be submitted?
A conclusion under which the property was appraised within the 6 months before the start of the enforcement proceedings may be submitted at the start of the proceedings or before the Bureau appraises the property. Where both parties submit conclusions, the Bureau relies on one of them.
How is the sale format changed by agreement with the creditor?
Where the creditor and the debtor agree, on the basis of their application and before the auction is publicly announced, the Bureau may determine another form of realization. After the announcement this option no longer exists.
Who receives the sale proceeds?
The amount received from the attached property, or paid by the debtor, less the fee and enforcement costs, is transferred by the National Bureau of Enforcement to the creditor.
Is a new appraisal always mandatory?
No — where the property was already appraised within 1 year before the start of the enforcement proceedings in the context of tax arrears, repeated appraisal is not mandatory.
How We Help on Legal.ge
On Legal.ge you can find lawyers specializing in enforcement proceedings who will help the debtor take an active position: preparing and submitting the expert conclusion, drafting the application for self-realization or for a format agreed with the creditor, and observing the deadlines that run before the announcement of the auction. Choose a specialist and secure the best price for your property.