The risks of third-party attachment: why you shouldn't ignore a third-party declaration

An attachment under a third party, and then silence

As a creditor, it is frustrating when your debtor does not pay. A powerful tool to collect your money is to place a precautionary or executive third-party attachment, for example on a bank account or an outstanding invoice of your debtor with a client or business partner.

The third party receiving the attachment has a legal obligation to make a third-party declaration. However, what happens if this third party ignores the request or provides an incomplete statement? The consequences for that third party can be substantial.

What is a third-party declaration and why is it mandatory?

In the case of a third-party attachment, the third party must, pursuant to Article 475 of the Dutch Code of Civil Procedure (Rv), submit a declaration within the statutory period stating what they owe the debtor. This is essential for the creditor to determine what can actually be collected.

Furthermore, this obligation prevents the third party from secretly making payments to the debtor while the debt is under attachment. It is a formal procedure that ensures transparency in the financial relationships between parties.

What happens if the third party fails to make a (complete) declaration?

Does the third party fail to provide a declaration or provide an unclear response? Then, based on Article 476 paragraph 4 Rv, the creditor can hold the third party liable for the full amount of the creditor's claim.

The third party is then deemed to owe the debt to the debtor as if it were their own debt. The burden of proof shifts: the third party must demonstrate in legal proceedings that they owed less or nothing to the debtor.

What was at stake in this case at the Court of Appeal?

In the case of ECLI:NL:GHARL:2024:4078, the municipality placed an attachment on a limited liability company (B.V.) where the debtors (Managing Directors/Shareholders) were employed. The B.V. stated briefly that it owed nothing to the debtors.

The municipality disagreed and held the B.V. liable. The core question for the court was whether the brief statement should be equated to a failure to provide a statement, which would make the B.V. liable for the debtor's penalty payments.

The ruling of the Court of Appeal

The court ruled that the B.V.'s statement fell significantly short. It was not substantiated by reasons and lacked supporting documentation, even though the B.V. had clear ties to the debtors.

The court determined that the statement was equivalent to failing to provide a statement at all. The B.V. was therefore ordered to pay the full amount because it failed to substantiate its claims with proper evidence.

What does this mean for you as a third-party garnishee?

• Always take a request to provide a third-party declaration seriously and respond within the set deadline.
• Submit the declaration completely and truthfully; an incomplete or withheld statement can be considered a failure to respond.
• Realize that if you fail to respond, the legal fiction of Article 476 paragraph 4 Rv applies: you can be held liable for the full claim.
• Keep evidence of what you do and do not owe the debtor, in case you need to provide counter-evidence.
• If in doubt, consult a lawyer immediately; being held liable can have significant financial consequences.

What to do now?

Are you being approached as a third-party garnishee or are you in doubt about how to handle an attachment? Do not wait for the procedure to escalate. Early legal advice is crucial to prevent you from unintentionally having to pay someone else's debt.

Ruling

This blog post is based on ECLI:NL:GHARL:2024:4078.

---

---