A powerful weapon in debt collection: the debtor's duty of disclosure

Suppose, as a creditor, you have obtained a claim against a debtor or - even better - a positive judgment ordering the debtor to pay an amount to you. Unfortunately, however, the debtor does not pay voluntarily.

Problem is that you do not know of any assets or income of the debtor that you can attach. What can you do now?

Article 475g RV

Under article 475g Rv, a debtor is obliged to declare "his sources of income" to the bailiff engaged by the creditor.

In HR September 20, 1991, NJ 1992/552, the Supreme Court ruled that a debtor - in addition to income - is also required to declare assets and property subject to recovery.

Few clients (and even attorneys) are familiar with this provision, even though the information requirement can be a powerful weapon in collecting a debt or recovering a positive judgment.

Indeed, if the debtor does not provide the aforementioned information, then performance can be claimed in summary proceedings.

In a recent case - of an international nature - I did so successfully. In doing so, the interim relief judge gave some interesting rulings.

The obligation to provide information covers both assets in the Netherlands and abroad

First, the interim relief judge ruled that Article 475g RV also extends to foreign assets and not only to income, assets and property in the Netherlands.

Thus, the debtor must also declare assets abroad.

Given that judgments within the European Union can be enforced relatively easily in another EU country, and given our increasingly cross-border society, this makes sense to me.

Thus, even if you as a creditor have a claim against a party with assets abroad, Section 474g Rv can provide relief.

The obligation to provide information also applies before a judgment has been obtained

Second, the interim relief judge ruled that Section 475g Rv covers both the conservatory phase and the enforcement phase.

This means that the obligation to provide information applies not only if a creditor has obtained a judgment, but also, for example, if there is an (undisputed) claim against the debtor.

Thus, as a creditor, you can, at a relatively early stage, remind the debtor of his duty to provide information and demand that he provide information about his assets, income and property.

If he fails to do so, you can therefore initiate summary proceedings even in this so-called conservatory phase to force the debtor to disclose.

Conclusion

The information obligation of Section 475g Rv is a powerful weapon that a creditor can use to recover a claim or recover a positive judgment from his debtor.

Of course, there are other means a creditor can use. You can think - depending on the circumstances of the case - of filing a bankruptcy petition or initiating directors' liability proceedings.

A creditor may also choose to do their own asset research or hire a professional recovery research firm to do so.

What best fits your situation should be assessed on a case-by-case basis.

One thing is certain, however, in my opinion: application of the right "weapon" significantly increases your chances of collecting your claim and/or recovering a positive judgment from the debtor.