Actions that debtors can take to counter a European Account Preservation Order on their bank accounts

A debtor bound by a cross-border debt to a creditor, whether or not the latter holds a deed, may have their bank assets frozen by a special attachment order known as the European Account Preservation Order.

The debtor is not informed of the application for the attachment order, or offered the opportunity to respond before the order is issued.

The aim of the procedure is to make sure the debtor is temporarily unable to disburse any of the money in their bank accounts before a judge rules on the validity of the debt requiring payment.

The debtor can act only after their assets have been frozen by the bank.

Who is concerned

Any natural person or legal person holding a personal or business-related cross-border debt against a debtor (natural or legal person) living in an EU Member State (with the exception of Denmark and the United Kingdom) may apply for a European Account Preservation Order.

This procedure may be initiated against a debtor living in the same EU Member State as the creditor, provided the account in question is located in a Member State other than:
  • the State holding jurisdiction over the application; or
  • the State in which the creditor lives or is headquartered.
Example: A creditor and a debtor both live in Luxembourg, but the debtor's account is in France.
The procedure does not apply to creditors whose grounds for claiming the debt stem from:
  • matrimonial or patrimonial regimes governing relationships comparable in effect to marriage (e.g. a civil partnership or a PACS);
  • wills/testaments and inheritances;
  • procedures already initiated against the debtor in regard to:

The European Account Preservation Order does not apply in Denmark or the United Kingdom. This means that:

  • a creditor residing in Denmark or the United Kingdom cannot apply for an attachment on an account held in Luxembourg;
  • a creditor residing in Luxembourg cannot apply for an attachment on an account held in Denmark or the United Kingdom.

Prerequisites

Non-seizable monies

In principle, the debtor's assets cannot be seized if those funds:

  • are not held solely by them; or
  • are held by a third party on behalf of the debtor, or by the debtor on behalf of a third party.

Monies exempt from seizure under the law of the Member State where the bank account is located cannot be seized.

Obtaining information pertaining to the debtor's accounts

If the creditor does not know the debtor's bank account details, they can obtain such information by filing a request with the judge with whom the attachment application was filed.

It should be noted that the conditions governing the transfer of such information between the bank and the authority in charge of collecting this information vary from one Member State to another.

The debtor will only be informed of the procedure by their bank 30 days after providing the information to the authority seeking it, to ensure that the European Account Preservation Order can be effectively enforced.

How to proceed

Freezing of accounts

The bank freezes the debtor's account(s) up to the value of the debt being claimed, immediately upon receiving a copy of the order from the judge.

Service of the Account Preservation Order on the debtor

When the debtor resides in the Member State where the account preservation order was issued, the issuing judge or the creditor serves notice thereof to the debtor. This division of roles depends on the law in the Member State holding jurisdiction.

In Luxembourg, the debtor will receive a visit from a bailiff.

When the debtor resides in a Member State other than that where the order was issued, the judge or creditor sends the documents to the relevant authority in the State where the debtor is resident.

That authority immediately takes the necessary measures to serve the documents on the debtor in accordance with the law in force in that Member State.

When the European Account Preservation Order applies to multiple banks, only the first declaration stating that an attachment has been obtained for the amounts shall be served on the debtor by the judge or creditor.

Any other declarations stating that other monies have been frozen under an attachment order are served on the debtor by the judge or creditor.

Appeals

Application by the debtor to revoke the European Account Preservation Order

The debtor may file an appeal with the authority that issued the attachment order, requesting that the order be revoked, if:

  • the creditor, or even the judge, failed to observe the proper procedure for obtaining the attachment;
  • the debtor had not been provided with the following documents within 14 days of the filing of the request for the attachment:
    • the order;
    • the declaration;
    • the notification of the order;
  • the documents attached to the notice served were not in the language of the Member State where the debtor is resident;
  • the amounts frozen by the attachment exceeding the amount specified in the order were not refunded by the creditor;
  • the debt was paid by the debtor;
  • the decision handed down by the judge rejected the application relating to the debt which the creditor sought to recover by means of the attachment order;
  • the decision handed down by the judge, the judiciary act or the authentic deed, which the creditor sought to enforce by means of the order was set aside or overturned.

The application is filed by the debtor using the European Commission 'Application for a remedy' form (Annex VII).

In Luxembourg, the debtor must file their application to reverse the European Account Preservation Order:

  • with the court magistrate with jurisdiction in the territory, for any debt less than EUR 10,000;
  • with the competent district court for any debt exceeding EUR 10,000.

The debtor can file the appeal at any time. They must file it as an interim measure.

The debtor may appeal the decision handed down by the judge refusing the revocation using the Appeal against a decision on a remedy form(Annex IX).

In Luxembourg, for any initial order, the debtor may file their appeal with:

  • the competent district court for that territory, if the initial judgement was handed down by a magistrate;
  • the Court of Appeal, if the initial judgement was handed down by a district court.

The debtor has 15 days, from the date of notification of the initial order, to file their appeal.

Limiting appeal against the enforcement of the Account Preservation Order

If permissible under the law of the Member State, the debtor may ask the judiciary or the competent authority enforcing the Account Preservation Order to limit the seizure to certain amounts because these exempted amounts have not been taken into account, or have not been correctly taken into account, when implementing the order.

The application is filed by the debtor using the European Commission 'Application for a remedy' form (Annex VII).

In Luxembourg, a debtor who wishes to apply for the revocation of a European account preservation order must file the request:

  • with the magistrate with jurisdiction in the territory, for any debt less than EUR 10,000;
  •  with the District Court for the territory for any debt exceeding EUR 10,000.

The debtor can file the appeal at any time. They must file it as an interim measure.

The debtor may appeal the decision handed down by the judge using the Appeal against a decision on a remedy form (Annex IX).

In Luxembourg, for any initial order, the debtor may file their appeal with:

  • the competent district court for that territory, if the initial judgement was handed down by a magistrate;
  • the Court of Appeal, if the initial judgement was handed down by a district court.

The debtor has 15 days, from the date of notification of the initial order, to file their appeal.

Debtor's appeal against the enforcement of the Account Preservation Order

The debtor may appeal to the judiciary of the Member State where the order is being enforced to halt the enforcement of the attachment order, if that order is manifestly contrary to the public laws of that Member State.

The application is filed by the creditor using the European Commission 'Application for a remedy' form (Annex VII).

In Luxembourg, a debtor who wishes to apply for the revocation of a European account preservation order must file the request:

  • with the magistrate with jurisdiction in the territory, for any debt less than EUR 10,000;
  •  with the District Court for the territory for any debt exceeding EUR 10,000.

The debtor can file the appeal at any time. They must file it as an interim measure.

The debtor may appeal the decision handed down by the judge using the Appeal against a decision on a remedy form (Annex IX).

In Luxembourg, for any initial order, the creditor may file their appeal with:

  • the competent district court for that territory, if the initial judgement was handed down by a magistrate;
  • the Court of Appeal, if the initial judgement was handed down by a district court.

The debtor has 15 days, from the date of notification of the initial order, to file their appeal.

Who to contact

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