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Actio pauliana, i.e. the debtor disposes of his property

In economic transactions, debtors often take steps to reduce their assets. Such practices are aimed at making it difficult or impossible to satisfy the creditor. The most common examples of such activities are: donation, sale (usually at a discounted price) or real estate mortgage. The institution protecting creditors against such unfair practices on the part of debtors is the actio pauliana, expressed in art. 527-534 of the Civil Code Pursuant to the provision of Art. 527 § 1 of the Civil Code, when as a result of a legal act of the debtor detrimental to creditors, a third party obtained a pecuniary advantage, each of the creditors may request that this act be considered ineffective in relation to him, if the debtor acted with the knowledge of detriment to the creditors and the third party knew about it or with due diligence, she could find out.

Actio pauliana - conditions for application

Grounds for the application of actio pauliana:

1) the debtor has performed a legal act (e.g. has sold his real estate),

2) the legal act performed by the debtor harms the creditor, because the debtor has become insolvent (or has become insolvent to a greater degree than before the act was performed)

3) a third party obtained a financial benefit as a result of this activity

4) the debtor was aware of his actions, he knew perfectly well that in this way he is harming the creditor

5) a third party who obtained a financial advantage knew (or could have learned with due diligence) that the debtor was acting with the awareness of harming his creditor

Actio pauliana - lawsuit

The most important element of the correct formulation of the statement of claim is the obligatory requirement to conclude a request to declare the action ineffective in relation to the creditor, indicating to whom the ineffectiveness is to be recognized and what specific action the request concerns.

If it turns out that a third party who has obtained a financial advantage has already disposed of it (e.g. by selling), the action should be brought directly against the buyer or recipient, but only if the regulation was free of charge or the fourth party knew about the circumstances justifying the recognition of the transaction. legal as ineffective (Art. 531 § 2 of the Civil Code). A very important issue that should be included in the formulated lawsuit is the application for security, e.g. in the form of a ban on the sale of items. If the object is real estate, an application should be submitted to the land and mortgage register court for an entry in the land register regarding the prohibition of selling and encumbering the real estate.

Further steps of the procedure

After receiving the judgment, the next steps the creditor should take are: