Third-party debtor declaration

What is a third-party debtor declaration?

The third-party debtor declaration is an official document that plays a crucial role in connection with a garnishment. Its purpose is to create clarity about the financial circumstances of a debtor.

More specifically, the so-called third-party debtor must declare in writing whether they owe the debtor money or whether another payment obligation exists.

At first glance, this sounds very technical, but it is easy to explain: when a creditor enforces a garnishment, the outstanding money should no longer flow directly to the debtor but instead reach the creditor. To make this possible, the third-party debtor must disclose which claims exist and whether these can be garnished.

A practical example: suppose someone has debts, and their employer is instructed by the court not to pay wages to them anymore but directly to the creditor. For the creditor to know how much of the wages are subject to garnishment, the employer must submit a third-party debtor declaration. This step ensures transparency and makes it possible to carry out the garnishment in a legally secure manner.

What is a third-party debtor?

The term third-party debtor refers to a third person or institution that would itself have to pay money to the debtor. In a garnishment procedure, this third party is directly involved because it assumes an important key role: it is the link between debtor and creditor.

Typical examples of third-party debtors are easy to understand:

• An employer who pays monthly wages to an employee

• A bank that manages a customer’s checking account and the balance it contains

• A business partner who would have to settle an outstanding invoice with the debtor

The third-party debtor therefore does not owe money to the creditor but to the debtor. However, through the garnishment, they are obliged not to direct their payments to the debtor anymore, but instead to provide information about them or forward the amounts directly to the creditor.

This creates a triangular relationship: the creditor demands money from the debtor, the debtor has claims against the third-party debtor, and the third-party debtor is obliged by the garnishment to disclose their role and, if necessary, pay the creditor.

Who must submit a third-party debtor declaration?

The obligation to submit the third-party debtor declaration lies exclusively with the third-party debtor. This means: only the person or institution that owes money to the debtor must provide such a declaration. Neither the debtor nor the creditor take on this task.

Simply put: the third-party debtor is responsible at this point because they are the only party who can provide information about their own payment obligations. They know best the amount, the type, and the status of the claim.

It is important to note that the declaration is not made voluntarily but represents a legal obligation. Once a garnishment order has been served, the third-party debtor must respond. It makes no difference whether the obligation concerns regular payments such as wages or salaries, or one-off claims such as an outstanding invoice.

When is a third-party debtor declaration required?

A third-party debtor declaration is not required in every case, but only at a very specific moment: once a garnishment has become legally effective. The basis for this is usually a garnishment and transfer order. Only when this document has been served on the third-party debtor does the obligation arise to submit the declaration.

This means that the timing is clearly defined and directly linked to the course of the garnishment procedure. Before this, there is no duty to act; afterwards, however, there is a clear and binding requirement.

For the creditor, this moment is particularly important, because only through the third-party debtor declaration do they receive information on whether garnishable amounts exist and to what extent they can expect payments.

For the third-party debtor, in turn, it means that they must respond within a short deadline and provide the required details.

Where is the third-party debtor declaration regulated by law?

The third-party debtor declaration is not a voluntary instrument but a procedure defined by law. Its legal basis is found in the German Code of Civil Procedure (ZPO), specifically in Section 840 ZPO.

This section sets out exactly what information the third-party debtor must provide, how comprehensive the disclosure should be, and within what deadlines it must be submitted.

This clear legal regulation creates legal certainty for all parties involved: for the creditor, who requires information; for the debtor, whose claims are being examined; and for the third-party debtor, who knows precisely what they must declare.

Without this explicit regulation, there would be no uniform process, which in practice would lead to uncertainty. The legal basis therefore ensures that garnishments in Germany are carried out according to clear and comprehensible rules.

What does a third-party debtor declaration look like and what information must it contain?

The third-party debtor declaration follows a clear structure. It must contain all the information necessary for the creditor to assess whether and to what extent a garnishment can be carried out.

In particular, it must state:

• Whether the debtor actually has a claim against the third-party debtor

• Whether this claim has already been garnished or assigned to another party

• Whether the third-party debtor is willing and obliged to make payment

• If applicable: the exact amount of the claim and the date from which it becomes due

The declaration is usually submitted in writing. Often, third-party debtors receive a form delivered by the court or bailiff. It is important that the information provided is complete and clear. Only then can smooth processing take place, avoiding delays or legal uncertainties.

Through this written declaration, the creditor ultimately has a reliable overview. They know which claims exist, whether these are subject to garnishment, and to what extent payments can be made.