Reform of attachment and execution law offers debtors greater certainty
The law, which among other things aims to ensure that people in debt do not end up falling below the poverty line, will enter into force in phases. If an individual’s property is seized so that it can be sold, they must be left with something to live on. In order for the law to be swiftly brought into force, consultation with stakeholders such as banks, municipalities and bailiffs was essential, as these parties need time to adjust their business procedures. The decision was made to introduce the law in three steps, starting on 1 October 2020.
Sander Dekker, Minister for Legal Protection:
Creditors are entitled to take measures if their accounts are not settled. However, this situation should not leave people facing a dead end. That is why the legal rules governing attachment and execution have been revised.
The first phase
The first phase will begin on 1 October 2020. From this date, movable property such as household items can in principle no longer be seized if it is reasonably foreseeable that the costs will outweigh the benefits. In such a case, a forced sale would not yield anything for the creditor. On the contrary, it would plunge the debtor into even greater debt, as the costs are charged to the debtor. In that case, seizure is used purely to put pressure on the debtor to pay, while the latter has no money to do so.
Clothing, food and other items required for personal care and general everyday necessities are also, in principle, exempt from seizure. These are items that generally have a low value. Property such as art and jewellery can still be seized. Auctioning off assets on the Internet will also be allowed, making it possible to reach a wider audience. This situation could lead to increased earnings at lower costs.
The second phase
The start of the second phase on 1 January 2021 will see the introduction of a protected bank account level. If a debtor’s bank account is restrained, they will still have access to part of their balance (the protected bank account level). A similar arrangement is already in place for an attachment on earnings or benefits (the protected earnings level). This will ensure that people with debt do not fall below the poverty line and are left with money to live off.
The third phase
The third and final phase on 1 April 2021 will provide for the administrative seizure of motor vehicles, making the process of seizing a car or trailer more efficient. Under the present rules, a bailiff must actually see the vehicle in order to seize it, while it is easy to establish via the RDW vehicle registration system whether someone has a car registered in their name. This means that seizures can take place after consulting the vehicle registration system and that it will no longer be possible to quickly have a vehicle registered in someone else's name. This will protect buyers from someone attempting to sell a car subject to attachment.
Action Plan for Tackling Debt Comprehensively
The government is continuing to work full steam ahead in collaboration with municipalities, implementing agencies and civil society organisations on the implementation of the Action Plan for Tackling Debt Comprehensively (Actieplan Brede Schuldenaanpak), one of the goals of the current coalition agreement. The plan involves around 40 actions in a number of areas to tackle debt problems, aimed at prevention, rapid and effective debt counselling and careful, socially responsible debt collection.