Term and Definition: Enforcing Creditor
Der enforcing creditors is a central party in German and Swiss enforcement or debt collection law. It refers to the person or institution that seeks to enforce their financial claims against a debtor within the framework of a state enforcement procedure (e.g., enforcement proceedings in Germany or debt collection in Switzerland). The role of the enforcing creditor varies according to the national legal system, but it generally follows the principle that claims arising from a private or statutory debt relationship are asserted and collected with the help of state authorities.
Legal Status and Role of the Enforcing Creditor
Requirements for Acting as an Enforcing Creditor
In order to act as an enforcing creditor, there must generally be an enforceable claim against another person or entity. This claim may be based on a contract, law, or a court title (e.g., judgment, enforcement order). The creditor must be specifically and individually determinable; both natural and legal persons, authorities, or public law corporations may act as enforcing creditors.
Duties and Rights
The enforcing creditor initiates the enforcement or collection proceedings. The most important duties and rights include:
- Initiation of the Enforcement Procedure: The creditor takes the necessary steps to initiate enforcement proceedings against the debtor (e.g., serving the enforcement title, filing an application with the competent enforcement authority).
- Determination of the Enforcement Object: The enforcing creditor may choose which asset of the debtor (e.g., bank accounts, real estate, movable property) the enforcement shall be directed against, provided there are no legal restrictions.
- Right to Information: In the course of the proceedings, the enforcing creditor may request limited information about the financial situation or assets of the debtor (e.g., asset disclosure).
- Right to Request Further Measures: Depending on the circumstances, the creditor can apply for additional enforcement actions, such as the enforcement of surrender or attachment.
Obligations of the Enforcing Creditor
Alongside their rights, the enforcing creditor must also observe certain obligations:
- Burden of Proof: The creditor bears the burden of presentation and proof regarding the existence and enforceability of the claim.
- Advance Payment Obligation: In many procedural rules, the enforcing creditor is required to advance costs (e.g., court fees, fees for enforcement authorities).
- Duty to Cooperate: During the course of the proceedings, further applications or statements may be required as part of the creditor’s duty to cooperate.
The Enforcing Creditor under German Law
Civil Law Enforcement
Under German law (§§ 704 et seq. ZPO), the enforcing creditor is the party that initiates an enforcement procedure against the debtor before a court or enforcement authority. Usually, this requires an enforcement title, as well as the enforcement clause and service thereof to the debtor.
The enforcing creditor may apply for different enforcement measures, including:
- Seizure of Assets by judicial officer,
- Attachment of Bank Accounts by means of an attachment and transfer order,
- Forced Sale of movable and immovable property,
- Obtaining Asset Disclosure.
Multiple Creditors
If more than one creditor with different claims proceeds against the same debtor (creditor competition), the law provides for special distribution and priority rules (e.g., distribution procedure under § 873 ZPO).
The Enforcing Creditor in Insolvency Proceedings
In insolvency law, the enforcing creditor is often referred to as the ‘petitioning creditor.’ They initiate the insolvency procedure by filing a petition with the court (§ 14 InsO) if they make a claim plausible and establish a ground for opening proceedings (illiquidity, over-indebtedness).
The Enforcing Creditor under Swiss Law
Debt Enforcement Procedure under the Swiss Federal Act on Debt Enforcement and Bankruptcy (SchKG)
According to the Swiss Federal Act on Debt Enforcement and Bankruptcy (SchKG), the enforcing creditor (officially called the ‘creditor’) is the party who, in their own name, asserts a monetary or security claim against a debtor by initiating enforcement proceedings (debt collection request).
Procedure and Participation
The enforcing creditor files a debt collection request with the competent debt enforcement authority. After service of the payment order and possibly after rejection of the objection, further steps may be taken by the enforcing creditor (e.g., continuation request, petition for a bankruptcy warning for certain claims).
Protective Mechanisms and Risk of Abuse
Debt collection law provides protective mechanisms against abusive actions by creditors, for example, provisions on cost allocation and sanctions for clearly unfounded debt collection requests.
Special Situations
Assignment of Claims and Legal Succession
The status as enforcing creditor can be transferred to another person by way of assignment, inheritance, or other legal succession. The new creditor fully assumes the position and rights of the original enforcing creditor, provided the requirements of the respective legal institution are met.
Partnership of Enforcing Creditors
Several persons may act jointly as enforcing creditors, e.g., in joint ownership communities or after division of claims (e.g., community of heirs). Representation is governed by the rules for partnerships, so a joint representative may have to be appointed.
Legal Protection and Objections against Measures of the Enforcing Creditor
Legal Protection of the Debtor
The debtor has various legal remedies against measures of the enforcing creditor, including:
- Raising objections to the claim (e.g., objection, opposition in Switzerland),
- Lawsuit for Suspension or Limitation of Enforcement,
- Complaint against unlawful measures of the enforcement authorities.
Good Faith, Proportionality, and Procedural Fairness
Measures taken by the enforcing creditor are subject to the principle of proportionality and must not be harassing or abusive. Unlawful or improper enforcement actions may give rise to claims for damages or injunctions by the debtor.
Conclusion
The enforcing creditor occupies a key position in enforcement and collection law. Their role is defined by rights (initiating and enforcing measures) but also by obligations (burden of proof and cooperation duties, cost participation). Legal rules safeguard both the creditor’s interest in enforcing legitimate claims and the debtor’s protection against unjustified interventions. Comprehensive knowledge of the rights and obligations of the enforcing creditor is essential in debt collection practice and for comparative legal analysis.
See also:
Frequently Asked Questions
What rights does an enforcing creditor have within enforcement proceedings?
An enforcing creditor has numerous rights within enforcement proceedings that enable him to effectively enforce his titled claim. The most important include the right to apply for an enforcement title (e.g., judgment, enforcement order, notarial deed with enforcement clause) against the debtor and, on that basis, to initiate enforcement proceedings. The creditor can choose which type of enforcement to carry out, for example, asset seizure, attachment of claims (e.g., garnishment of wages or bank balances), or enforcement against immovable property (real estate, land). The creditor also has the right to assert claims for information against the debtor or third parties, particularly when the debtor’s whereabouts or assets are unknown (§ 802l ZPO). The creditor may also, upon application, request the issuance of protective measures (e.g., seizure or interim injunction) in order not to jeopardize the enforcement of his claim. As part of enforcement, the creditor is also authorized to request asset disclosure in order to determine the debtor’s assets. Finally, the enforcing creditor can both advance the proceedings and obtain their temporary suspension or limitation, for example by withdrawing applications or entering into payment agreements.
What obligations does an enforcing creditor have in enforcement proceedings?
The enforcing creditor is obliged to provide truthful and complete information during enforcement proceedings, in particular regarding the amount of the outstanding claim and the existing title. He must submit the necessary documents (e.g., enforcement title, certificate of enforceability, proof of service) correctly and pay the required fees for carrying out the enforcement (court costs, bailiff’s advances). The creditor must ensure that his measures are proportionate and may not request unduly extensive or harassing measures. If further payments or partial payments are made, the creditor is obliged to notify the bailiff immediately and to credit any amounts already paid. Furthermore, the creditor is required to apply for termination of the proceedings as soon as the claim has been fully satisfied (§ 775 No. 1 ZPO). Failure to observe these obligations may result in cost consequences and, if applicable, damage claims by the debtor.
Can an enforcing creditor freely choose the type of enforcement?
In principle, the enforcing creditor is free to determine the type of enforcement (§ 803 ZPO). That is, depending on the circumstances of the case, the creditor may pursue asset seizure, the garnishment of claims, or enforcement against the debtor’s immovable property. The creditor is not required to pursue certain types of enforcement with priority or exclusively, unless the law sets a ranking in specific cases (for example, enforcement against wages and bank balances). However, the creditor bears the risk of enforcement: if an inefficient enforcement measure is chosen, this may result in higher costs, which in the worst case may be borne by the creditor if the debtor is insolvent and there is no cost recovery obligation. A limitation also applies in that the court or bailiff may reject a requested measure if it is manifestly abusive or disproportionate.
What options does an enforcing creditor have if enforcement measures are unsuccessful?
If enforcement measures are unsuccessful, the enforcing creditor has several further options. He may apply for the debtor to give asset disclosure under § 802c ZPO, whereby the debtor is compelled to provide detailed information concerning all his assets. This information is stored in the debtor register, which often puts pressure on the debtor. The creditor may also attempt to identify previously unknown assets, for example by requesting information from the tax office, the Federal Motor Transport Authority, or other third parties. There is also the possibility of making another enforcement attempt after the expiry of certain waiting periods if the debtor’s financial circumstances improve in the meantime. In exceptional cases, the creditor may file an insolvency or opening application in order to prevent a possible discharge of residual debt by the debtor and, through insolvency proceedings, obtain at least a small recovery.
What role does the enforcing creditor play with respect to the ranking of multiple creditors?
In enforcement proceedings, particularly in connection with the attachment of claims and foreclosures, the ranking of the enforcing creditors is important. The decisive factor is generally the time at which an attachment order or an entry in the land register (in the case of real estate) is obtained. The enforcing creditor who attaches first or makes the entry first has priority over later creditors. If several attachments are made simultaneously or multiple creditors have equal rights, there will be a so-called collective enforcement, where claims are satisfied proportionately. The creditor should therefore act quickly if competition threatens, in order to secure the best possible ranking. During enforcement proceedings, every creditor has the right to join as an additional party, but the original enforcing creditor remains central for initiating and coordinating the proceedings.
To what extent is an enforcing creditor liable for erroneous or unjustified enforcement actions?
A creditor initiating enforcement can be held liable for all damages arising from wrongful or unjustified enforcement. Liability is based on § 717 ZPO, according to which the creditor must compensate the debtor for any damage suffered as a result of the enforcement if the enforcement order is revoked or amended. This applies, for example, if the underlying title is subsequently found to be invalid or if the creditor has provided incorrect information that led to unjustified enforcement proceedings. The obligation to pay damages covers both material and immaterial damages and may extend to all procedural costs as well as any consequential damages. In addition, a creditor who unjustifiably initiates enforcement proceedings may be ordered to pay all court costs. However, liability does not arise if the creditor can prove that he is not at fault.
Can the enforcing creditor waive or terminate the enforcement proceedings?
The enforcing creditor is entitled to declare at any time that they waive the continuation of enforcement proceedings. This can be done by withdrawing the enforcement application, by declaring the matter resolved in the event of payment, or by reaching a settlement with the debtor. It is also possible to request suspension of the proceedings, for instance, to grant the debtor a payment deadline. Once the claim has been satisfied, the creditor is obliged to actively effect the termination of the proceedings (§ 775 No. 1 ZPO). If the creditor fails to fulfill this obligation, the debtor may in turn apply for termination and claim reimbursement of costs. Consent to the termination of the proceedings may also be declared within the scope of judicial applications. Thus, the creditor has comprehensive influence over the management and termination of enforcement, but is also bound by statutory obligations to terminate proceedings upon satisfaction of the claim.
