Securing your business and defending your interests
Debt recovery and insolvency proceedings
Recovery of unpaid invoices, insolvency proceedings, security interests and seizures.
You are not being paid: your claim has a value that falls week by week, and the question is how far to go and how fast — start here.
Your business can no longer meet its liabilities: the law gives you confidential tools for as long as you are not in cessation des paiements — the French test of insolvency — and you lose them afterwards — start here. The firm handles both — it is one of our areas of practice in business law — and that is also what allows it to anticipate what the other side will do.
You are not being paid
An unpaid invoice is not only a cash-flow problem: it is an asset whose value depends on time. The further your debtor deteriorates, the more the race for security is run against the other creditors — and on the day insolvency proceedings open, it is too late to take security.
We therefore always start with the same thing: assessing the debtor's real solvency before spending a euro on procedure. Recovering a debt from an empty company costs more than the debt.
Amicable recovery: formal notice and negotiation
A formal notice to pay is not one more chasing letter. It starts default interest running (art. 1344 of the French Civil Code) and, between businesses, it sets out the late-payment penalties together with the flat-rate €40 recovery compensation owed as of right (arts. L. 441-10 and D. 441-5 of the French Commercial Code).
Sent by a lawyer, it also changes status in the recipient's eyes: it announces proceedings, it does not threaten them. It is often at this stage that a payment schedule is negotiated — and a signed schedule is worth more than a judgment against a company that will not pay.
Two points to watch at this stage:
- Limitation. Five years for obligations arising in the course of trade (art. L. 110-4 of the Commercial Code). An old debt is dealt with first.
- Small claims. A simplified procedure conducted by a commissaire de justice, the French enforcement officer, exists for modest amounts (art. L. 125-1 of the Code of Civil Enforcement Procedures), up to a ceiling set by decree (art. R. 125-2 of the same code). It requires the debtor's agreement: without it, it wastes time.
Injonction de payer, référé-provision, proceedings on the merits
Three routes, and the choice turns on a simple test: is your claim open to challenge?
- The injonction de payer, the order for payment (arts. 1405 et seq. of the Code of Civil Procedure), covers a claim for a fixed amount arising from a contract. The judge rules without a hearing, on the documents. The order must be served within six months of its date, failing which it lapses (art. 1411 of the Code of Civil Procedure), and the debtor has one month to object (art. 1416). Quick and inexpensive — but an objection sends the matter to a full trial.
- The référé-provision, an interim payment order (art. 873 para. 2 of the Code of Civil Procedure, before the president of the tribunal de commerce, the French commercial court), requires an obligation that is not seriously open to challenge. It produces an enforceable order within a few weeks.
- Proceedings on the merits become unavoidable as soon as the claim is disputed: a challenge to the conformity of what was supplied, a set-off relied on, a badly formed contract.
Protective attachment and taking security
This is the most useful and the least used measure. The juge de l'exécution, the enforcement judge, may authorise a saisie conservatoire, a protective attachment, where the claim appears well founded in principle and circumstances threaten its recovery (art. L. 511-1 of the Code of Civil Enforcement Procedures) — before you have any judgment at all. Some instruments even remove the need for authorisation: an accepted bill of exchange, a promissory note, a dishonoured cheque, unpaid rent (art. L. 511-2 of the same code).
Two practical consequences:
- The funds are frozen before the debtor organises their own insolvency.
- Proceedings on the merits must be brought within the month following enforcement of the measure, failing which it lapses (art. R. 511-7 of the Code of Civil Enforcement Procedures). The attachment is not an end in itself, it is an advance on the trial.
Illustrative composite case — real files are covered by professional secrecy (art. 226-13 of the French Criminal Code). A small engineering company delivers to a customer for an amount representing two months of its turnover. Three chasing emails go unanswered, then the accountant announces “a cash-flow problem”. Here the order of operations matters more than the choice of procedure: check whether insolvency proceedings have been published, secure the funds that are available, and only then bring the action. The reverse — suing first — gives the debtor time to empty the accounts.
Do you have an unpaid invoice and doubts about what comes next? The simplest course is to set out your situation to us before incurring the costs of proceedings.
Your business can no longer meet its liabilities
French insolvency law (Book VI of the Commercial Code) is built on a single dividing line: cessation des paiements, that is, the inability to meet liabilities as they fall due out of available assets (art. L. 631-1 of the Commercial Code).
For as long as you have not reached it, you have confidential tools at your disposal and you keep control. Once it has occurred, you have forty-five days to declare it (arts. L. 631-4 and L. 640-4 of the Commercial Code), unless you apply within that same period for conciliation proceedings to be opened. Missing that deadline is not a mere procedural slip: it is one of the grounds that later feed claims against the director.
Mandat ad hoc and conciliation
Two amicable procedures, both confidential, both opened at your own initiative.
- The mandat ad hoc (art. L. 611-3 of the Commercial Code): an officer appointed by the president of the court helps you renegotiate with your main creditors. No statutory duration, no publicity, no loss of control.
- Conciliation (arts. L. 611-4 et seq. of the Commercial Code): available even if you have been in cessation des paiements for no more than forty-five days. It lasts no more than four months, extendable without exceeding five months in total (art. L. 611-6). An approved agreement can give new money a preferential ranking (art. L. 611-11).
This is the moment when you still get to choose who you talk to. It is also the moment directors wait longest to reach, because applying for a mandat ad hoc feels like an admission. It is not: nothing is published.
Sauvegarde, redressement, liquidation: what separates them
| Sauvegarde | Redressement judiciaire | Liquidation judiciaire | |
|---|---|---|---|
| Provision | art. L. 620-1 Commercial Code | art. L. 631-1 Commercial Code | art. L. 640-1 Commercial Code |
| Condition | insurmountable difficulties, without cessation des paiements | cessation des paiements, recovery still possible | cessation des paiements, recovery manifestly impossible |
| Who applies | the debtor alone | debtor, creditor or public prosecutor | debtor, creditor or public prosecutor |
| Management | the director stays in office | stays in office, supervised or assisted | divested in favour of the liquidator |
| Individual guarantors | may rely on the plan (art. L. 626-11 Commercial Code) | may not (art. L. 631-20 Commercial Code) | — |
All three procedures share two immediate effects, and they are what lets the business breathe: the stay of individual creditor proceedings (art. L. 622-21 of the Commercial Code) and the prohibition on paying pre-existing debts (art. L. 622-7).
The last row of the table is the one that most often decides matters. A director who has personally guaranteed the company's bank facilities does not have the same interest depending on which procedure is opened — and that difference is lost as soon as cessation des paiements has occurred, since sauvegarde is then no longer available.
Since Ordinance no. 2021-1193 of 15 September 2021, transposing Directive (EU) 2019/1023 of 20 June 2019, plans may be adopted through classes of affected parties: negotiation with creditors no longer takes place in the same terms, and that is prepared before the hearing, not during it.
If this is where you are, the forty-five-day clock is already running. A first conversation serves above all to place the date of your cessation des paiements — let us talk.
Liquidation judiciaire: what happens, and in what order
The opening judgment divests the director of the administration of the company's assets in favour of the liquidator, who realises the assets and distributes the proceeds. It is published — and it is that publication in the BODACC, the official bulletin of civil and commercial announcements, that starts most of the deadlines that follow.
Filing and defending your claim
If you are a creditor, your claim exists in the proceedings only if you file it (art. L. 622-24 of the Commercial Code).
- The deadline is two months from publication of the opening judgment in the BODACC (art. R. 622-24 of the Commercial Code), extended to four months for creditors domiciled outside metropolitan France.
- If you hold a registered security interest or a registered contract, you must be notified personally, and the deadline then runs only from that notification.
- A missed deadline is not always lost: relevé de forclusion, relief from the time bar, may be applied for within six months of publication (art. L. 622-26 of the Commercial Code), provided you show that the failure was not your doing.
- If you sold goods subject to retention of title, repossession follows its own deadline: three months from publication (art. L. 624-9 of the Commercial Code). It assumes, of course, that the clause reserving title to you was written and accepted before the sale.
Filing a claim looks like an administrative step. Its classification — preferential, unsecured, pre-existing or post-opening — in fact decides what you will receive, and it is argued before the juge-commissaire, the supervising judge.
The risks for the director
A liquidation does not automatically entail any personal sanction. Three actions are nevertheless possible, and they are prepared as a defence:
- Liability for the shortfall of assets (art. L. 651-2 of the Commercial Code) requires a management fault that contributed to that shortfall. Mere negligence has been expressly excluded since Act no. 2016-1691 of 9 December 2016: that is the first line of defence.
- Faillite personnelle and a ban on managing a company (arts. L. 653-1 et seq. of the Commercial Code) target conduct precisely listed in the statute, not commercial failure.
- Personal guarantees given to the banks survive the liquidation of the company: they are very often the real personal stake in the file.
All three of these subjects bear directly on the liability of the company director, which we also handle upstream, when the articles of association and the governance are being written.
How we work
- Classify before acting.The debtor's solvency, or the date of cessation des paiements, depending on which side you are on. It is that diagnosis that makes what follows capable of being priced.
- Write down the timetable. Every deadline in this field is set by law: two months to file a claim, one month after a protective attachment, forty-five days to declare cessation des paiements. We set them out in writing from the first conversation.
- One contact. The file is handled by the person who opened it, from the formal notice to the hearing — it is one of the things we undertake to hold to.
- Report back. Every step taken by the liquidator or by the opposing debtor is translated for you into a decision to be taken, not into a copy document to be filed away.
Our fees in debt recovery and insolvency
Debt recovery is handled on a fixed fee, stated and accepted before the first step is taken. It is the firm's long-standing arrangement, and it exists precisely because a creditor cannot incur costs whose ceiling is unknown in order to recover a sum they are not certain to see again.
Insolvency proceedings fall under the detailed fee agreement: scope, work to be done and terms are fixed in writing, with no billing outside that framework.
The amount is stated and accepted before the work begins. The three formats used by the firm — retainer, fixed fee, fee agreement — are set out in detail on the firm's fees page.
Why entrust this file to Pujol Avocats
- Both sides of the courtroom. We defend creditors and we assist directors in difficulty. A creditor needs to know what a well-advised debtor will do; a director needs to know what a determined creditor will demand.
- A background that can be checked.Me Jérôme Pujol was admitted to the Bar in 2000, after an ESSEC master's degree and a spell with Gide Loyrette Nouel. He is registered with the Bars of Paris and of the Pyrénées-Orientales, and on Liste E with the Barcelona Bar.
- Sources, not slogans. Every statement on this page refers to an article of Book VI of the French Commercial Code, of the Code of Civil Procedure or of the Code of Civil Enforcement Procedures. You can check them.
- Availability, because this subject is a subject of deadlines. A file about an unpaid invoice or about cessation des paiementsdoes not get opened in three weeks' time.
The rest of our practice — corporate, contracts, tax, data — is set out with our other areas of practice in business law.
In Paris, Perpignan and Barcelona
Insolvency proceedings are heard by the court of the debtor's registered office: the tribunal de commerce, the French commercial court, where the debtor is a trader or a craftsperson, and the tribunal judiciaire, the general civil court, in other cases. The geography of the file is therefore not yours, it is the debtor's.
- From our office in the 7th arrondissement, we handle unpaid-invoice and insolvency files for businesses in the Île-de-France region, including for creditors established elsewhere whose debtor has its registered office there.
- From Perpignan, we cover the Pyrénées-Orientales and Occitanie — a fabric of small and medium-sized businesses, subcontractors and seasonal companies where one customer's unpaid invoice spreads quickly along a whole chain.
- French-Spanish claims are handled on the other side of the border as much as from here: cross-border insolvency is governed by Regulation (EU) 2015/848 of 20 May 2015, which designates the court having jurisdiction according to the debtor's centre of main interests.
Files are also handled remotely, by video call.
Frequent questions
Not the creditors in the order in which they claim. First come the super-priority for employees' wages (art. L. 3253-2 of the French Labour Code) and the costs of the proceedings, then, where applicable, the conciliation priority attaching to new money (art. L. 611-11 of the Commercial Code), then post-opening claims useful to the proceedings (art. L. 622-17 of the Commercial Code). Pre-existing creditors are paid only after that, according to their security — unsecured creditors last.
Opening judgments are published in the BODACC, the official bulletin of civil and commercial announcements, and shown on the company's Kbis extract. Checking takes a few minutes and should precede any action: a claim form served after the opening judgment runs into the stay of individual proceedings (art. L. 622-21 of the French Commercial Code), and your only route then becomes filing a proof of claim.
At this firm, debt recovery is handled on a fixed fee, stated and accepted before the first step is taken. Procedural and enforcement costs (commissaire de justice, court registry) are added to it and are stated at the same time. Nothing is billed outside the framework agreed in writing.
By acting before cessation des paiements — the French test of insolvency. The mandat ad hoc (art. L. 611-3 of the French Commercial Code) and conciliation (arts. L. 611-4 et seq.) are confidential, leave the director in control and make it possible to renegotiate debts and payment dates. After cessation des paiements, sauvegarde proceedings are no longer available and the choice narrows.
Both presuppose cessation des paiements. Redressement judiciaire is opened where recovery of the business remains possible (art. L. 631-1 of the French Commercial Code); liquidation judiciaire where it is manifestly impossible (art. L. 640-1). A redressement may in fact be converted into a liquidation during the observation period.
No sanction is automatic. Three risks exist: liability for the shortfall of assets where there has been a management fault, mere negligence being excluded (art. L. 651-2 of the French Commercial Code); faillite personnelle or a ban on managing a company for conduct listed in the statute (arts. L. 653-1 et seq.); and calls on the personal guarantees given to the banks, which survive the company.
First conversation
Tell us your situation and we will tell you what is possible
At our offices in Paris, Perpignan, Barcelona, or by video call.