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request to sell the property and during the execution proceedings, it is
apparent that the pledged property shall not be sufficient to cover the
receivables, a provisory document certifying the insufficiency of the
pledge shall be provided for the uncovered amount.
With the provisory document certifying the insufficiency of the
pledge, the creditor may procure the sale of properties of the debtor
other than the pledged property through seizure. However, a final
document certifying the insufficiency of the pledge is necessary to be
provided, instead of a provisory document, in order for such properties
to be sold. Unless the creditor provides sufficient evidence that the
consideration gained through the sale of the pledged property is not
sufficient to cover his receivable, the creditor shall not be provided
with a final document certifying the insufficiency of the pledge, and
thus the seizure and sale of other properties of the debtor may not be
requested. Only when it is finally determined that the receivable is not
covered will the creditor be provided with a final document certifying
the insufficiency of the pledge.
The final document certifying the insufficiency of the pledge bears
certain advantages. With the possession of this document, the creditor
may prove to have fulfilled the obligation of primary application to the
pledged property, and the creditor therefore may proceed with the gen-
eral seizure or bankruptcy proceedings. Additionally, in the event the
creditor proceeds with a general seizure proceedings within one year,
he can directly request seizure without the issuance of a payment or
execution order. However, if the general seizure proceedings are initi-
ated after the lapse of the one year period, a payment order or an exe-
cution order should be issued.
In addition to such advantages, the final document certifying the
insufficiency of the pledge also bears the characteristics of an acknowl-
edgement of a debt in the sense of Art. 69 of the EBC. Therefore, after
the lapse of the one year period, if the enforcement proceeding without
a judgment is initiated and the debtor objects to the payment order
issued, the removal of such objection may be requested by the provi-
sion of this final document certifying the insufficiency of the pledge.
It is necessary to state that the final document certifying the insuf-
ficiency of the pledge does not constitute a “certificate of insolvency”.
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