What is actio pauliana?
When the debtor, in order to hide his property before enforcement, has disposed of it to a third party (usually in the form of a significantly underestimated sale or donation), this undoubtedly aggravates the situation of the creditor, who can no longer recover his money. In such a situation, the creditor may be saved by an institution such as actio pauliana, regulated in Art. 527-534 of the Civil Code.
What is an actio pauliana?
The essence of the actio pauliana is granting the possibility of pursuing the claims of the creditor when, as a result of the legal action of the debtor, a third party has obtained a financial advantage, and as a result of this procedure the creditor becomes the aggrieved party. In such a case, the creditor has the right to demand that this action be considered ineffective in relation to him, if the debtor acted with the knowledge of the detriment of the creditor and the third party knew about it or could find out with due diligence.
Actio pauliana - premises
The grounds for the 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, knew perfectly well that in this way he is detrimental to 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 that his creditor was detrimental.
These conditions must be met cumulatively.
Actio pauliana - elements
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.
Actio pauliana - what next?
The next steps for dealing with an actio pauliana are simple. After an award is reached, the next steps a creditor should take are:
submitting an application for a declaration of legality,
submitting an application for an enforcement clause.
Only after obtaining the writ of execution it is possible to conduct the enforcement proceedings.