Part 1 of Chapter 5 Flashcards
What is the General Guarantee of Obligations
The debtor’s things, assets or rather the debtor’s assets that can be seized, constitute the general guarantee of obligations.
Can all things be seized?
No
What are the things that cannot be seized?
Things that cannot be seized, that are in public domain, an object whose seizure may be deemed to offend common decency or lacking economic justification, considering small market value.
Can things be partially seized?
Yes
What are the things that can only be partially seized
Inter alia, 2/3 of the liquid part of salaries, wages, periodic instalments paid as retirement or any other social benefits, insurance, compensation for accident, annuity, or benefits of any kind to ensure the livelihood of the executed.
This exclusion has a maximum limit equivalent to the amount of 3 minimum salaries for seizure and a minimum limit equivalent to the amount of one national minimum salary
Can inter alia be adjusted
It can considering the amount and nature of the credit as well as the needs of the debtor and his households, the judge may, exceptionally and at the request of the debtor, reduce, for a periods deemed reasonable, the seized proportion of the income and even, for a periods not exceeding one year, exempt it from seizure.
Is there an in between Unseizable things and partially seizable things?
Yes, relatively unseizable things, assets of the state, other public entities, of concessionaires of public works or public services and of non-profitable entities with public utility allocated to public utility purposes (except in relation to debts with in rem guarantees). Work instruments and objects indispensable to the exercise of the activity and professional training of the debtor, except in the cases set forth by the law; good essential to any domestic economy that are within the house of the debtor. Except when the debt results from lack of payment of the selling price of the repair cost.
What are securities
Special guarantees (securities) aimed at reinforcing, to the creditor’s benefit, the general guarantee of creditors (the debtor’s entire estate), offered to all creditor on an equal foot.
These securities can be be personal guarantees or in rem securities.
Types of securities
Personal security
In rem securities (fixed charges)
What are personal securities
Another person guaranties, with his or her assets, the fulfilment of the debtor’s obligations to the creditor
What are in rem securities
A fixed charge attached to a particular asset (of the debtor or of a third party) and gives the charge holder/creditor preference in payment for the value of the sale of the asset in question.
Ex. Mortgage, or pledge
What are provisions of security
Special guarantee of obligations that includes all situations in which someone is required by law, the court or as a result of a contract to provide a security without indicating its type.
Unless otherwise stipulated by the law, this security can be provided by different means, notably money bonds, precious stones or metals, pledge, mortgage, and personal guaranties.
What is a personal security
A third party guarantees with his/her own assets, the compliance of the someone else’s obligations and therefore becomes personally liable to the creditor.
This means that the guarantor is liable to the creditor with his assets (and not with a specific asset, as in the case with a mortgage or other in rem securities)
Details in regard to being a gurantor
- Benefit of prior excussio
Grants guarantor the possibility of refusing payment until all the assets of the debtor are exhausted/judicially executed. - - However, the guarantor cannot resort to this benefit if:
1. he/she renounced the benefit
2. if he/she has assumed the role of primary debtor/payer
What is a pledge
Grants the creditor the right to have his credit (money and interests) paid with preference over other creditors in relation to certain moveable things, credits or other rights that cannot be mortgaged, owned by the debtor or by a third party.
The types of pledges
Pledge of things
Pledge of rights
Pledge of things
Only takes effect with the delivery to the pledge creditor of the pledged thing (Ex. collection of old coins)
What is a mortgage
Legal document which offers a building or land (or things that the law deems equivalent to immovable things, like cars, ships and aircrafts) as security (ex. loan)
Go into more detail about mortgages
A fixed charge as it is attached to a particular asset. Grants the creditor the right to be paid by the value of those immovable things (or of things equivalent to immovable things), with preference to other creditors.
Steps in getting a mortgage
Mortgages must be registered in order to be effective and enforceable. In addition a mortgage related to land/buildings (immoveable things must be executed by a public deed, a will or an authentic document.
The different types of mortgages
- Legal mortgage
- Voluntary mortgage (may result from agreement or an unilateral contract)
- Judicial mortgage
What is prior ranking
Certain creditors, taknig into account the nature of their credits, and regardless of registration, are greanted prior ranking over other (being paid ahead of them).
What can prior ranking relate to?
- Moveable or immoveable things
- Can be generic or special
How are privileged credits classified
Are moveable if they affect moveable things and immoveable if they affect immovable things
Are special if they only affect certain movable or immovable property and general if they affect all moveable or even immovable property.
