Annulling a debtor’s fraudulent act

A creditor’s primary concern is primarily the financial state of his debtors. For how is the creditor to satisfy his claims if his debtor is insolvent or if his solvency is not enough to entertain his claims? After all, the control and management of the financial affairs of the debtor will always remain in the hands of such debtor. Time and again, creditors have faced circumstances wherein their debtors intentionally and fraudulently shrunk their patrimony to tatters – this by opting to alienate their assets. Once a debtor’s asset is transferred unto third parties, then the creditor can no longer lay his hands on it − this, unless the creditor succeeds in instituting the actio pauliana against his debtor. This institute is provided for in article 1144(1) of the Civil Code which merely provides that any creditor may in his own name impeach any act made by his debtor in fraud of his claims. It is an action against the fraudulent activity of the debtor and, if successful, it would extinguish the debtor’s fraudulent act. In turn, the debtor may plead the benefit of discussion that is set up in articles 795 to 801 of the Code of Organisation and Civil Procedure. This plea antidotes...