Compulsory execution allows a court to exercise control over an individual’s assets and forcibly transfer them from one party to another, providing a powerful tool to force debtors to pay off an outstanding debt. However, in situations where it is used unjustly, it can cause great harm to innocent parties. Therefore, in order to prevent this from happening, compulsory execution orders may be appealed by the defending party.
Once a bankruptcy case starts, creditors of the bankrupt party lose all rights to pursue payment of any debts outside of the bankruptcy proceedings. If one creditor were to settle with the debtor outside of the bankruptcy court it would unfairly prejudice the remaining creditors so the bankruptcy law specifically prohibits creditors from privately pursuing their claims.
Determining whether a debtor is a real, registered company is an important first step when collecting a debt. Many individuals who have never incorporated their business will still print business cards with a business’s name and logo in order to seem more like a reputable company. However, searching the list of registered companies in Japan provides a quick and effective way to determine whether the debtor is a real company or just an individual pretending to own an incorporated business.
A main concerns when enforcing a debt in Japan is that the debtor will simply remove any money from his or her bank account, hide it, and then pretend to be insolvent when the creditor tries to enforce the judgement. In order to prevent this, the creditor can take a legal procedure to freeze any known bank accounts so the debtor cannot withdraw the funds.