Cancellation of legal actions and forced execution
One of the most important effects of opening the insolvency procedure is represented by the cancellation of all legal, extrajudicial actions or of the measures of forced execution started for obtaining the receivables on the debtor or its assets.
The aimed purpose of the Romanian lawgiver, by the provisions of art. 36 of Law 85/2006, although might seem a paradox targets the protection of creditors, not their disadvantages. Thus, by refusing to allow some creditors to start the actions and the individual investigation against the debtor, once the insolvency procedure is opened, the law guarantees for the valuation of the patrimony to be performed collectively and organized, under the supervision of the assigned judge, without certain parts of the patrimony to be deducted or exempted.
The cancellation leads to the immediate cancellation of the judgment progress, so the court shall not be able to take any other measure in process, except finding this impediment. As an example, there cannot be invoked or solved the exceptions, procedural or of the first instance, but it can be ruled the dis junction of certain claim heads if these do not lead to the legal suspension.
The suspension of action, according to art. 36 of Law 85/2006, does not automatically determine the registration of the litigious receivable in the table of the debtor’s creditors, for whom it was opened the procedure. Therefore, it is vital for the preservation of the creditor’s rights that, by complying with the legal terms, to formulate the receivable declaration, regardless if at that date, on the docket of courts there is a case in acquiring its receivable or only the intention to introduce it.
Although the right of action of creditors is suspended by art. 36, this does not disappear, being conserved according to art. 40 of the same law, text that also consecrates another important effect of the procedure opening, respectively the suspension of the prescription lapsing terms. As a result, it is important to know that under the reserve of fulfilling the exigencies concerning the extinctive prescription, the creditor can start again the legal action against the debtor, in case of dismissal or closure of the insolvency procedure.
What is the forced execution?
According to the Civil Procedure Code, the forced execution is a judicial method for the recovery of some debts / receivables that were established by enforceable titles, like orders / law court rulings, notary agreements for assets or money, bank credits and other identical situations.
The forced execution started upon the request of a creditor may be performed by all the possible means, this meaning – GARNISHMENT, SEIZURE, SALE OF MOVABLE OR IMMOVABLE assets, so the creditor cannot be conditioned to choose only one way, as it is not forbidden to choose them all, which means that once started the forced execution this can be performed by any means until covering all the allegedly owed amounts.
What can we do when we receive the enforcement documents?
When you receive any enforcement document, regardless of its form and name (n.n. summons, notification, garnishment, seizure, auction sale publicity, etc.), you have the right to appeal it in court.
May the executor increase the value of the amounts initially owed?
Yes, the executor has the possibility to apply interests, penalties or other amounts only if by the enforcement title these rights have been established, although it was not specified their amount.
In case the enforcement title has not granted interests / penalties or other damages, the executor may rule to update the due amounts, regardless of its origin. Such “updating” shall imply the correction of the amounts owed in relation with the inflation rate.