Certificate of Inability to Pay
Attachment, Sale, and Collection
Prepared by: Constantinople
Enforcement Proceedings and Legal Remedies
Where the debtor's assets do not cover the claim, the action and document recording that fact matter. A certificate of inability to pay may have consequences different from simply saying the debtor has no money. The certificate's type and the stage at which it was issued must be identified.
When Is a Certificate of Inability to Pay Considered?
Claims unsatisfied after attachment and sale are assessed under special provisions on the attachment record and certificate of inability to pay. Provisional and definitive inability to pay differ. The document's effects on enforcement, interest, limitation, or later remedies such as transaction avoidance must be examined with the relevant rules and particular file.
For example, a debtor may have receivables from third parties despite having no immovable property. Whether an attachment record suffices for a particular application cannot be understood from its heading alone. A chronology including the origin of the debt and asset transfers shows the document's possible legal function.
Examine the Remedy and the Stage of the File Together
An asset search returning no result does not invariably establish every condition of inability to pay. Attachment actions, the debtor's shares and receivables, and the sale outcome must be reviewed in the file. The certificate does not automatically collect the claim; a separate plan is needed for subsequently acquired assets or transactions subject to avoidance.
Documents to Prepare for the Initial Review
- Attachment records and asset investigations
- Sale and distribution results
- A complete copy of the certificate issued
- Documents concerning the claim and the debtor's asset transfers
To assess provisional or definitive inability to pay, examine the attachment record, sale result, and certificate together.
Legal Grounds and Official Sources
The Enforcement and Bankruptcy Law and relevant special legislation; the official sources below are considered for practice. Specific time limits, jurisdiction, expenses, and procedural requirements must be determined separately by reference to the file's dates.