Let’s assume a creditor has a monetary claim against a debtor in Korea but the debtor refuses to pay it. The creditor would proceed to file a lawsuit to get a judgment to collect his claim. Unfortunately, however, the chances are that knowing the complaint was filed, the debtor would try to conceal or transfer his assets to evade from the liability under judgment. This shows why provisional attachment is highly required to secure the judgment effectively.
Provisional attachment is a judicial measure available to anyone who has a monetary claim to lock down certain assets. It, depending on the type of court order, prevents the debtor from selling assets or enables the creditor to secure his interest in the debtor’s asset regardless of the sale by the debtor, until the court issues a judgment on the merit.
The creditor can, and usually does, seek a provisional remedy before she files a complaint on the merit. So, this is a very powerful weapon for the creditor. For example, as many Korean creditors do, if the creditor succeeds in putting a provisional attachment on the debtor’s bank account, the debtor would not be able to use the money and could face several penalties regarding its banking/financing transactions with the bank. This could heavily deteriorate the ability for a small company to conduct business, which makes the debtor (more…)