If you do not pay your debts, the creditor may apply for a bailiff to seize goods in your house and/or to make a financial status enquiry (previously affirmation in lieu of oath).
Prerequisite: Your payment obligation must have been officially established, e.g. in judgement or writ of execution or acknowledgement of debt certified by a notary public (=title). The title must have been served upon you.
Financial status enquiry This is a long questionnaire which you are required to answer. The aim is to find our whether you have any attachable assets or financial claims against third parties (e.g. wages).
You will therefore be asked whether you have any real estate, vehicles or expensive assets, a bank account, savings accounts, building society accounts or life assurance policies and what you live on (wages, unemployment benefits etc.).
In all likelihood the creditor will apply for enforcement proceedings. Very often accounts or wages will be attached.
The filing of a financial status enquiry will be registered with the court and SCHUFA which means that your creditworthiness may be questioned and it may become difficult to find a new flat, for example.
By filing a financial status enquiry, you disclose your financial situation. If you are insolvent you will only be able to conclude contracts (hire purchase, rental agreements etc.) which you can actually pay. Otherwise you may be guilty of deceitful conduct.
If charges are brought against you, you may be sentenced. The financial status enquiry does not protect you against further attempts at enforcement.
You may, however, inform other creditors that you have filed a financial status enquiry. The creditor will then reconsider whether it is worth his while applying for enforcement proceedings.
Yes. If you refuse, an arrest warrant will usually be obtained against you. If you still refuse, you will be sent to prison, provided the creditor applies for and pays for it (coercive arrest = Erzwingungshaft]). If you owe at least 500 EUR the bailiff may also obtain information from the health insurance funds and pension insurance associations. He may also ask whether you have a bank account or a car registered in your name.
Yes, that is a must! It is a criminal act to give false information.
The bailiff is instructed to go to your home to see if there are any attachable items. If you have a savings books, jewellery or securities, he will take these with him (attach them). If the items are very large (e.g. antiques), he will stick a bailiff's stamp on them (Pfandsiegel). This item is then attached. You may continue to use it until the bailiff collects it, but you may not sell it or give it away.
All attached items are publicly auctioned by the bailiff (possibly via the Internet). However, this is only done if the proceeds cover the costs and there is still enough left over for the creditors.
Any items that you and your family need in order to live (e.g. clothing, furniture, a television, food, medical aids etc.) cannot be attached. Pets cannot be attached. Items that you need for your education (e.g. computer) or work (including your car if there is no viable alternative for getting to work) cannot be attached, either. The bailiff may however, exchange a non-attachable item that has a very high value. You must tell the bailiff if an item does not belong to you or has not been paid for. Normally these will not be attached. If he does take such an item, the owner may take legal steps.
Remember: Suppliers (e.g. mail order firms, car dealers) may always collect items that have not been paid for if you are in arrears with payments, even if the item is one that is basically not attachable.
Bailiffs come without notice. If you are not at home, he will leave a note in your letterbox stating when he intends to come back. You should be at home on this date! If this is not possible (because you are at work, for example), you should phone him to arrange a different date. You should allow the bailiff into your home. If you do not, he will apply for a search warrant and your home can be opened by force.
Yes. By paying by instalments you can avoid having to file a financial status enquiry and having your goods seized. But do remember that, in addition to the instalments, you must be able to pay other costs for rent, fuel and daily living.
Remember: The creditor may charge an additional fee for payment by instalments. And you will have to pay interest on the arrears.
Payment by instalments generally only makes sense if you have other debts which you cannot pay. In this case you should ask for advice at an official debt advisory centre.