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The Hardship Grant

The Hardship Grant

In debt collection, the creditor, creditor's lawyer or debt collection company has a wide range of options and tools to try to get all or part of an outstanding debt paid. One of these methods is to attach the debtor's assets - a house, car, boat or anything else of value - in order to secure value for their claim. But when it comes to attachment, the legal term 'hardship benefit' is a relevant word to know and understand. The hardship benefit is basically a principle of a modest home and a modest standard of living. In other words, assets that cannot be seized.

A debtor should be left with the assets needed to maintain a modest home and living expenses is the basic principle behind hardship relief.

The word trangsbeneficium comes from the Latin beneficium compentiæ.

The subject is regulated in Section 509 of the Code of Civil Procedure. In addition, there are a number of judgments, decisions and orders from both the High Court and the Supreme Court in this area.

What is a modest home?

Basically, there is no definitive list of what a modest home or a modest standard of living does or does not include. Therefore, I rely on the Code of Civil Procedure, SKAT and, not least, the decisions that exist in this area.

It is also important to note that social developments continuously affect what is considered to be a modest home and standard of living. But what cannot be seized is, for example, furniture, beds, crockery, television, kitchen utensils and the like - if these do not individually constitute an unreasonably high value.

Real estate can basically always be seized, even if this is considered to be modest.

The substitution principle

The creditor or his debt collection company/lawyer, in cooperation with the enforcement court, can make use of the substitution principle if this is deemed possible.

The substitution principle allows the creditor to attach assets if they are considered to be of high value; expensive watches, expensive art, expensive electronics. This can be seized but replaced with an equivalent product of lesser value.

What should you be aware of in relation to the hardship benefit?

This is an extremely difficult subject, and as there are no definitive lists of what constitutes a modest home and a modest standard of living, there have historically been a large number of judgments, rulings and decisions in this area, both from the High Court and the Supreme Court.

We recommend that you always consult a debt collection agency or a lawyer if you want to attach a debtor's assets.


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