Salary Execution

Salary Execution

Salary execution is one of the most frequently chosen means of execution. It is a form of debt enforcement. A portion of a person’s income is garnished to settle outstanding debts. In this procedure, the employer of the obligated party becomes the third-party debtor and transfers the attachable portion of the salary directly to the enforcing party. The obligated party retains a minimum amount, the so-called subsistence level according to § 291a EO, so that they can secure their livelihood.

Salary execution makes it possible to collect outstanding debts directly from the obligated party’s income. In the case of salary execution, the employer acts as a third-party debtor and is obligated to transfer the attachable portion of the income to the enforcing creditor.

Parties to salary execution

There are two main parties in the execution proceedings. In the case of salary execution, the enforcing party is the creditor who wishes to collect an outstanding debt. The obligated party is the debtor whose income is being garnished. In addition, the third-party debtor plays an important role. The third-party debtor is the employer who pays the salary to the obligated party.

Process of salary execution

First, the enforcing party must file an execution request with the court:

• The enforcing party requests the attachment of the obligated party’s earned income in order to collect their outstanding debt
• The court examines the request and approves the salary execution if all legal requirements are met
• The court notifies the employer as the third-party debtor
• The employer submits a third-party debtor declaration and deducts the attachable portion of the salary from the obligated party’s income
• The employer transfers the attachable portion of the salary to the enforcing party and the subsistence level to the obligated party

Peter Harlander
Harlander & Partner Rechtsanwälte „Through our experience in conducting salary executions, we create legal certainty and avoid unnecessary delays, so that our clients quickly get their money.“

Third-party debtor declaration

Within four weeks of the approval of the salary execution, the employer must submit a so-called third-party debtor declaration. For this purpose, they use a sample form, which they send to both the court and the enforcing party. In this declaration, the employer provides information about the debtor’s employment relationship. Among other things, they state the amount of the monthly net income, whether there are maintenance obligations, and whether other attachments already exist. This information makes it possible to correctly calculate the attachable amount.

Ranking

If several creditors apply for a salary execution, the general rule is: first come, first served. This means that the employer must first serve those creditors whose claims were applied for and approved earlier.

Only when these priority creditors have been fully satisfied may the employer forward the attachable amount to subordinate creditors. This creates a clear order in which the claims are processed.

Third-party debtor lawsuit

The third-party debtor lawsuit is a legal remedy of the enforcing party against the employer of the obligated party. It is used when the employer violates their obligations under the salary execution, such as failing to submit a third-party debtor declaration or failing to properly transfer the garnished amount. In such a case, the creditor can sue the employer for payment. This ensures that the attachment is correctly implemented and the creditor’s claim is enforced.

Notification of the end of salary payments

If the employment relationship is terminated, the employer must inform the enforcing party. For this purpose, they use a judicial sample form. The notification should be made as soon as possible, but no later than within one week after the end of the following month in which the employment relationship ended.

No notification is required if the obligated party’s income falls below the subsistence level, if military or civilian service begins, maternity leave or parental leave is taken, or the entitlement to remuneration ends due to a long period of sick leave.

Sebastian Riedlmair
Harlander & Partner Attorneys „Communication between the enforcing party, the obligated party, and the third-party debtor is often crucial. We ensure clear processes and legally compliant implementation. “

Seizability of vacation and Christmas bonuses

Salary execution also includes special payments such as vacation and Christmas bonuses.
These special payments are attachable. If such special payments are due, the enforcing party receives a higher payment during this time because, in addition to the current salary, a portion of the special payment is also garnished.

Unknown employer

The enforcing party can also file a request for salary execution if the employer of the obligated party is not known. For this purpose, only the date of birth of the obligated party must be stated in the execution request. The court contacts the umbrella organization of the social security institutions with this information and requests information about which employer the obligated party is employed by. If an employer is identified, the salary attachment is carried out.

If the search for an employer remains unsuccessful, the request will initially be unsuccessful. However, the enforcing party can submit another request at a later date. A new application for wage execution can be used to find out whether the debtor is employed by a new employer at a later date.

Priority of salary execution over movable property execution

If salary execution is possible, movable property execution will not be carried out initially. The enforcing party can request both types of execution simultaneously, and the court will approve them together. In practice, an attempt is first made to collect the debt via the debtor’s income. Only if the salary execution remains unsuccessful will the movable property execution be carried out subsequently.

In the case of movable property execution, the debtor’s movable property, such as furniture, electrical appliances or other valuables, is then seized and, if necessary, auctioned off in order to settle the outstanding claims.

Your Benefits with Legal Assistance

The implementation of salary execution is often associated with legal uncertainties. There are often ambiguities regarding the correct application, and small formal errors can lead to delays or rejection of the application.

Experienced legal support provides security and helps to make the process legally sound.

• Support throughout the entire procedure
• Support in enforcing your claims
• Implementation of all relevant steps

Frequently Asked Questions – FAQ