Pledge
This term refers to the law of the country selected below.
Austria China Germany Italy Poland Turkey
What is a pledge?
Under Polish law, a pledge is a limited property right used to secure a claim primarily over movable property or transferable property rights. It entitles the creditor to seek satisfaction from the pledged asset regardless of who becomes its owner and with priority over the owner’s personal creditors, subject to statutory exceptions. In Poland, real estate is not encumbered by a pledge. The appropriate limited property right used to secure a claim over real estate is a mortgage, which, as a rule, is created upon entry in the land and mortgage register.
How is a pledge created?
For an ordinary pledge over movable property, an agreement between the owner and the creditor is required and, as a rule, the asset must be delivered to the creditor or to a third party whose possession has been agreed by the parties. A pledge over rights is created subject to the requirements applicable to the relevant right.
What are the main types of pledge security?
Polish law distinguishes, in particular, the ordinary pledge regulated by the Civil Code and the registered pledge. A registered pledge requires a pledge agreement and registration in the pledge register, while the pledged asset may remain in the pledgor’s possession. Separate statutes may also provide for statutory pledges or special forms of security, such as financial collateral. Security arising in enforcement proceedings or on the basis of court decisions must be assessed under the relevant procedural and property-law provisions. As a rule, a pledge is accessory to the secured claim. In the case of a registered pledge, however, the statute provides for specific exceptions, including the possibility of maintaining the pledge after the original claim has expired in order to secure a new claim if the agreement satisfies the statutory conditions.
Legal basis: Articles 244 and 306 et seq. of the Polish Civil Code; Article 65 et seq. of the Act on Land and Mortgage Registers and Mortgage; the Act on Registered Pledge and the Pledge Register.
Learn more about our insolency and restructuring division. Please contact us for further information.
Get in touch