Originally from Attachment of Assets

Preview Page

1. What is the general nature and effect of judicial measures available for plaintiffs to obtain provisional relief affecting property of debtors to obtain security for judgments to be obtained (“attachments”)? Freezing property in place? Placing it in the custody of a third party, such as a court official, sheriff or marshall?

Generally speaking, attachment orders are procedural measures ordered by the courts in favor of the plaintiffs to obtain security over the property of defendants for the satisfaction of judgments to be or already dictated in judicial or arbitration proceedings. The Guatemalan courts have ample discretion and powers to issue orders that will have the effect of preventing the transfer of the debtor´s property to third parties or their dissipation. 

Attachment orders may have different effects depending on what type of asset or property of the defendant it affects or is directed to. The Code of Civil and Commercial Procedure (Código Procesal Civil y Mercantil, Decree-Law 107) in article 303 states that attachment orders (embargo) entail the prohibition to the defendant to sell the attached property. On the other hand, depending on the type of real property it affects, the measure will have the effect of freezing the property in place or placing it in the custody of a third party such as a court appointed official or a person designated by the creditor with court approval (e.g. cases over claims of property over stock, agricultural enterprises or farms) or a bank (e.g. bank accounts or securities in custody of banks). In other cases, as in the case of immovable or real property, the attachment of the asset is effected by the annotation of the attachment in the Property Registry so that the creditor have priority over other creditors that file their attachment after him and in order to inform third parties that might acquire the assets that the property has a lien that will be satisfied with the asset if left unpaid. This is also true for other types of movable assets like, for example, registered trademarks, in which their attachment has to be filed in the Intellectual Property Registry for the same purposes. Still in other cases, as in the case of attachment of commercial enterprises or establishments (“empresas mercantiles”), the attachment over them is effected by putting them in receivership with a court appointed official that takes control of the assets, makes necessary payment of accounts payable, takes control of receivables and the remainder funds or resources are set aside to serve as security for the resulting or already obtained judgment.