Compulsory execution is a powerful tool for creditors to recover assets from debtors who refuse to pay off their debt. However, as compulsory execution is based upon the power of a Japanese court of law, it is also limited by that same court’s power. Therefore, assets outside of the court’s jurisdiction will not be able to be reached by compulsory execution.
Having the address of a debtor in Japan is a prerequisite to filing a lawsuit against them. Without an address, a complaint cannot be delivered to the defendant and the court will not have jurisdiction to hear the case. Therefore, obtaining the debtor’s address is often the most critical part of enforcing a debt. There are various ways to determine a debtor’s address but all are heavily dependent on the situation.
Usually parties will negotiate among themselves through email before resorting to the legal process to enforce a debt. If these negotiations fail, often the content of these email exchanges becomes the evidence in a legal case against the debtor. Therefore, it is important to draft emails in a way that maximizes their potential use in future litigation.
For individuals, bankruptcy starts when the person is unable to pay a debt and the time for payment has lapsed. For corporations the standard is a little different. Corporations may file for bankruptcy when they are unable to pay, similar to a normal person, or when they are in a state of “balance sheet insolvency.” Balance sheet insolvency is when the corporation is unable to make payments even by selling its assets.