What is the Right of Retention and How Does It Protect the Creditor?
First and foremost, the right of retention represents an exceptionally strong security mechanism. Specifically, the legislator introduced it into the legal system back in 1991. Consequently, this tool provides creditors with effective protection for their payable monetary claims. Furthermore, the Civil Code meticulously regulates the specific conditions of this right. Simply put, if a debtor fails to pay you, you can legitimately retain their movable property based on a unilateral declaration of will. Otherwise, you would normally have to return this item to them.
When Exactly Can You Retain a Debtor’s Property?
Although entrepreneurs do not utilize this mechanism very commonly, its practical application offers massive possibilities. In practice, the right of retention applies in situations where a debtor leaves a physical movable item for your temporary use. For instance, a typical example remains a contract of custody, lease, transport, storage, or a standard loan. However, one fundamental rule always applies here. Namely, the subject of retention becomes exclusively a movable thing. Subsequently, you must possess it legally, and your claim must acquire a clear monetary character at the exact moment of retention.
The Crucial Importance of Maturity and Commercial Contracts
Therefore, you must always place immense emphasis on correctly determining the due date. Indeed, this date directly dictates whether you hold a foreign object rightfully and legally refuse to return it. If the contract does not define the exact deadline, the claim becomes due the day after you prompt the debtor for payment. However, you must never prompt the debtor to pay on the exact same day you are supposed to return the item. At the same time, remember that you cannot arbitrarily monetize the retained item. Ultimately, the debtor always retains the right to its return after paying the debt.
Moreover, even though the Commercial Code does not directly define the right of retention, it routinely operates with it in forwarding or storage contracts. Subsequently, however, every such commercial-legal relationship strictly follows the provisions defined precisely by the Civil Code.
Bankruptcy and the Transition to a Security Right
Additionally, the right of retention gains a completely different dimension in the event of a bankruptcy declaration. As soon as the court declares bankruptcy on your debtor’s assets, you must not continue retaining the item. In this situation, your right of retention automatically changes into a security right. Consequently, you must hand the item over to the administrator. Conversely, if bankruptcy affects you as a creditor, the administrator attaches a specific notation to the property. Specifically, this specification points out the disputability of its inclusion in the bankruptcy estate. Subsequently, the debtor has the right to pay the debt or demand the item’s exclusion from the property inventory.
Professional Debt Resolution Without Upfront Fees
Undoubtedly, applying the right of retention and the overall debt collection procedure require absolute legal precision. Therefore, Claims Collection provides comprehensive recovery services for legal entities in the B2B sector, as well as for natural persons in the B2C sector. Specifically, our legal experts successfully resolve unpaid invoices, commercial debts, damages, or unjust enrichment.
If you seek a fast resolution without lengthy court battles, we offer you highly effective out-of-court debt recovery. Ultimately, the greatest advantage of our cooperation remains the absolute absence of financial risk. Namely, we charge our remuneration exclusively upon successful recovery. Thus, you pay absolutely nothing if we do not recover your claim. Furthermore, our public debt collection price list reliably confirms this transparent approach.
Do not hesitate, because an incorrect step during property retention can cost you significant money. Therefore, contact us immediately. Promptly, our specialists will provide a completely free claim assessment for you, regardless of the dispute’s complexity.