The Object of Seizure and Rights Held against Third Parties
In the field of enforcement, all property of the debtor is subject to seizure, except for the property separately listed by law, and items found with the debtor are presumed to belong to him or her. The subject of the applicable law on seizure is therefore broader than the debtor’s own physical assets: state enforcement reaches the debtor’s claims as well — monetary receivables existing against third persons, the so-called obligated persons. It is precisely here that the statutory mechanism arises which regulates how a third party must act after receiving an order on the placement of a seizure, and how the National Enforcement Bureau reconciles the interests of several creditors at once.
Seizing a claim gives the creditor a tool to protect that asset of the debtor from transactions between the debtor and other persons that would diminish the value of the claim. The practical importance of this institute grows particularly where the debtor’s own property is insufficient for enforcement and the creditor’s hope rests on the debtor’s claims against third parties, such as receivables under contracts, deposits, or sums held by counterparties.
The Obligated Person’s Declaration
Within two weeks of receiving the order on the placement of seizure, the obligated person must declare to the enforcement officer and the creditor: whether he acknowledges the claim and, if so, to what extent he is ready to pay; whether other persons are raising claims to the demand and, if so, which ones; and whether a seizure has already been placed on the debtor’s demand and, if so, for which claim. This declaration must be made within the two-week period, and ignoring it leads to adverse consequences for the obligated person under the procedures established by other provisions of the enforcement legislation.
Multiple Seizures and the Order of Satisfaction
Where a multiple seizure is placed on a demand, the claims of creditors are satisfied according to the order in which the order on the seizure of the demand was transferred to the third obligated person. Where applications for the seizure of the demand are submitted simultaneously, the creditors are satisfied proportionally to their claims. Upon the placement of a multiple seizure, the obligated person is obliged to effect payment through the National Enforcement Bureau, which distributes the withdrawn amount according to the procedure established by law.
The creditor also has the right to renounce the demands obtained through the order on the placement of seizure, in such a way that his or her rights given in the enforcement documents are not violated. Upon renunciation, a statement is transferred to the National Enforcement Bureau, and the statement must also be conveyed to the obligated person. This instrument allows the creditor to pursue enforcement strategically by moving on to other assets.
Seizure of Claims for the Transfer of Property
Where claims concern the transfer of an item, the order on the placement of seizure must specify that the obligated person is to transfer the item to the National Enforcement Bureau. Coercive action against the obligated person may be taken only if the creditor obtains an enforcement document against the obligated person for the surrender of the item. After the transfer, the rules of realization depend on the nature of the item: upon the transfer of a movable item, the rules for the realization of seized movable items apply, and upon the transfer of an immovable item, the rules for enforcement against immovable property.
Practical Guidance for Creditors and Obligated Persons
For the creditor, it is important to use the possibility of seizing a demand promptly and correctly: the moment the order begins to operate vis-a-vis the obligated person determines priority, so speed and accuracy matter especially where several creditors act at once. The creditor may also continue enforcement against other assets and, where necessary, renounce the demands obtained through this mechanism without violating the rights reflected in the enforcement documents.
For the obligated person, observing the two-week period is central, as is stating precisely in the declaration whether the claim is acknowledged, whether others are raising claims, and whether a seizure has been placed before. Where a multiple seizure exists, payment is effected through the National Enforcement Bureau, so transferring the amount directly to a creditor deviates from the statutory procedure. The specific consequences of missing deadlines are established by other provisions, so the risk of non-compliance is not confined to these articles alone.
Frequently Asked Questions about Seizure of Rights Held by Third Parties
What must the obligated person do after receiving the order?
Within two weeks, he must declare to the enforcement officer and the creditor whether he acknowledges the claim, whether others are raising claims to the demand, and whether a seizure has previously been placed.
How is the amount divided among several creditors?
According to the order in which the seizure order was transferred to the obligated person; where applications are simultaneous, proportionally, through distribution by the National Enforcement Bureau.
Can pressure be applied to the obligated person?
Coercive action against him is possible only where the creditor obtains an enforcement document against that person for the transfer of the item.
What happens to the transferred item?
The item is transferred to the National Enforcement Bureau and then realized: a movable under the rules for movables, an immovable under the rules for enforcement against immovable property.
How We Help on Legal.ge
The Legal.ge team assists both creditors and obligated persons in matters of seizing rights held against third parties: we assess the prospects of placing a seizure on a demand, prepare the declarations and record the deadlines, protect your interests in dealings with the National Enforcement Bureau, and ensure the correct calculation of priority in cases of multiple seizure. Contact us through the Legal.ge website and receive practical support at every stage of enforcement.