Converting the pledge into cash is a way for the creditor to directly collect on the pledged property in mortgaged/pledged receivables. EBL art.145.
Types
- Immovable property pledge (mortgage)
- Movable mortgage (vehicle, share, machinery)
- Commercial enterprise pledge
Mortgage Proceedings
- Credee to the enforcement office application
- 30 days payment order to the debtor
- Preparation for sale if not paid (3 months period)
- Auction (50% of the valuation basis)
- Tender → price to the creditor
Value Appraisal
- Expert (court)
- Objection: 7 enforcement court within the day
- Re-expert possible
Tender
- 1. auction: 50% of value
- 2. auction: 25% (after 10 days)
- If the buyer does not show up, the creditor can buy it for 25%
Types of Mortgage
- Limit mortgage (TBK art. 851)
- Upper limit mortgage
- Joint mortgage
Supreme Court 12. HD
12. HD accepts that in lien sales, "the creditor must first convert the pledge into cash", and that it is only possible to seize other goods if the pledge is insufficient.
Enforcement/mortgage lawyer is recommended.