It is not an unknown situation in practice that when the debtor realizes that he will have to repay the debt to his creditor, he begins to deprive himself of his property so that the creditor cannot collect his claim. Such legal actions of the debtor can be refuted by the so-called Paulian lawsuit. The Paulian lawsuit is an exception to the rule that a third party cannot interfere in another’s obligation relationship.
What are the conditions for filing a Paulian lawsuit?
The first condition for rebutting the debtor’s legal actions is that the creditor’s claim is due for payment. This means that the deadline that the debtor had to fulfill his obligation has passed. The second condition is that as a result of such an action, the debtor does not have enough funds to repay his debt to the creditor. Under the debtor’s legal action is also considered omission, e.g. non-acceptance of inheritance.
Asset Sale vs. Asset Gifting
The debtor can dispose of his property by encumbrance, that is, sell it, although this is not the only form of encumbrance disposal, but it is the most typical. Encumbered disposal can be contested if at the time of the disposal the debtor knew or could have known that the undertaken disposal was causing damage to his creditors and if the third party with whom or for whose benefit the legal action was undertaken knew or could have known this. If the third person is the debtor’s husband, or a relative by blood in the direct line, or in the collateral line up to the fourth degree, or by in-laws up to the same degree, it is assumed that he was aware that the debtor was causing damage to the creditors by the disposal undertaken. In the case of free dispositions (gifts), it is considered that the debtor knew that the disposition he undertook was causing damage to creditors, and in order to refute those actions, it is not required that the third party was aware of it or could have been aware of it.
What are the rebuttal deadlines?
The deadline for refutation of encumbered disposal is one year from the action taken, i.e. from the day when the missed action should have been taken, and three years for non-encumbered disposal.
What is the effect of a rebuttal?
If the court approves the claim, the legal action loses its effect only against the plaintiff and only as much as is necessary for the fulfillment of his claims.
