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| The Impact of the Concept of Donation on the Debtor's Liability
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Marwan M. Saleh, Besan S. Abu Nasser
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Abstract:
The research indicates that the general guarantee does not prevent the debtor from disposing of their assets; the debtor can sell or gift their property, transfer their debts, settle on their rights, or waive them. However, a donation by the debtor reduces the general guarantee for creditors, who can object to such transactions through an action of ineffectiveness against them. The action of ineffectiveness addresses the positive actions of the debtor that reduce the general guarantee, whereas the indirect action addresses the negative conduct of the debtor, who refrains from increasing the general guarantee for their creditors. An action of Ineffectiveness is not accepted if the debtor's act is material; it must be legal and harmful to the creditors. The three legal mechanisms discussed do not grant the creditor initiating the action any special advantage in recovering their claim but ensure equality with other creditors. Indirect actions are rarely used in practice, as creditors usually prefer the more effective method of attachment in the hands of third parties when their claim is monetary. In the case of donations, the creditor does not need to prove collusion or fraud by the debtor, as harm to creditors is presumed. If the creditor succeeds in an action of ineffectiveness, the transactions deemed harmful are considered void, and both the initiating creditor and other creditors benefit from the judgment, allowing them to participate in the execution against the transferred asset. The discussed legal mechanisms do not grant any creditor a priority in recovering their claims but adhere to the principle of equal distribution among creditors. Thus, the general guarantee serves as a means to protect creditors' rights from the debtor's actions that may reduce the guarantee available for debt repayment. The importance of donations and their impact on the general guarantee is highlighted, along with the necessity to protect creditors' rights through actions of ineffectiveness and actions of simulation, clarifying the differences and significance of each in safeguarding creditors' rights.
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