Legal provisions on auction of collateral

1. What if the collateral cannot be auctioned?

If the chattel collateral is auctioned for the second time, the price may be paid to the application executor or other enforcement creditors to pay off the debts. The application executor or other enforcement creditor refuses to accept or fails to pay off the debts according to law. The court shall lift the seal-up or seizure and return it to the person subjected to execution. For real estate or other property rights that are still auctioned in the second auction, the court may pay the price to the application executor or other enforcement creditors to pay off the debts. Refuse or fail to pay off debts according to law, the third auction shall be held within 60 days. If the third auction fails, the applicant executor or other enforcement creditors refuse to accept the real estate or other property rights to pay off debts according to law, the court shall issue a notice of sale within 7 days from the end of the third auction. If no buyer is willing to buy the property at the reserve price of the third auction within 60 days from the date of announcement, and the application executor and other enforcement creditors still refuse to accept the property to pay off their debts, the seizure, freezing and return of the property shall be lifted, except that other enforcement measures can be taken for the property.

Second, the liquidation order after the auction of collateral.

1. If multiple creditors whose payment contents are specified in several effective legal documents apply for execution against the same person subjected to execution respectively, and all creditors have no security interest in the subject matter to be executed, they shall be compensated according to the order in which the enforcement court takes enforcement measures.

If there are different types of creditor's rights, the creditor's rights based on ownership and security interests take precedence over monetary creditor's rights. If there are multiple security interests, they shall be paid off in the order in which the security interests are established.

If multiple creditors whose payment contents are determined in the effective legal documents apply for execution against the same person subjected to execution, and the property to be executed is not enough to pay off all debts, and all creditors have no security interest in the subject matter of execution, they will be compensated according to the proportion of their claims.

2. If the person subjected to execution is an enterprise legal person and his property is insufficient to pay off all debts, he may inform the parties to apply for bankruptcy of the person subjected to execution according to law.

3. If the person subjected to execution is a citizen or other organization, and all or the main property of the person subjected to execution is sealed up, distrained or frozen by the people's court due to the execution of effective legal documents, and there is no other property available for execution or other property is insufficient to pay off all debts, before the execution of the property of the person subjected to execution is completed, other creditors who have obtained the basis for the execution of monetary claims against the person subjected to execution may apply to participate in the distribution of the property of the person subjected to execution.

4. The specific distribution of the property of the person subjected to execution shall be presided over by the court that sealed up, detained and frozen first.

The compulsory enforcement measures taken by the court to seal up, detain and freeze in advance are to enforce the ruling on property preservation, and the specific distribution should be carried out after the trial of the case in our court.

5. Where a creditor applies to participate in the distribution, it shall submit an application for participation in the distribution to the original application enforcement court, explaining the reasons for participation in the distribution and attaching the enforcement basis. The enforcement court shall forward the application for participation in the distribution to the court presiding over the distribution, and explain the implementation.

6. Creditors who enjoy priority and security interests in the property sealed up, seized or frozen by the people's court may apply to participate in the distribution procedure and claim the priority of compensation.

7. The property available for execution in the distribution case shall be distributed according to the proportion of the amount of creditor's rights in each case after the creditors with priority and security right have priority in the order prescribed by law.

8. After the property of the person subjected to execution is distributed to all creditors, the person subjected to execution shall continue to pay off the remaining debts. If the creditor finds that the person subjected to execution has other property, the people's court may continue to enforce the execution according to the creditor's application.

9. If the person subjected to execution is an enterprise legal person and has been revoked, cancelled or closed without liquidation or liquidation, and his property is insufficient to pay off all debts, the creditor's rights shall be paid off in proportion with reference to these Provisions.

Three. Collateral auction procedure

The general procedure of collateral auction is:

(1) The mortgagee submits the auction application and relevant supporting documents to the auction institution.

(2) The auction institution shall check and verify the collateral and determine the auction reserve price.

(three) the auction institution issued an auction announcement in the newspaper. The announcement period is 15 days.

(4) After the expiration of the announcement, if there is no dispute over the ownership of the auction target, the auction institution will conduct a public auction.

(5) After the auction is completed, the tax is paid and the auction property right is transferred.

If the collateral cannot be auctioned, the court will realize it by selling it at different prices to repay the loan or the loan.

Legal objectivity:

Article 394 of the Civil Code of People's Republic of China (PRC) guarantees the performance of debts. If the debtor or the third party does not transfer the possession of the property and mortgage the property to the creditor, the debtor fails to perform the due debt or the creditor has the right to be paid in priority for the property. The debtor or the third party specified in the preceding paragraph is the mortgagor, the creditor is the mortgagee, and the property that provides guarantee is the mortgaged property.