Whether they are individual clients or institutional clients, when consulting with lawyers, they often raise the following question: “If we don’t have any leads on the debtor’s assets, even if we obtain a favorable judgment, there’s no guarantee that we’ll be able to recover the outstanding payment. So, does filing a lawsuit still make sense?” The widespread nature of this question is, at its core, a microcosm of the intensifying debt conflicts arising from the economic downturn. Indeed, filing a lawsuit without first obtaining information about the debtor’s assets does carry the risk that a favorable judgment may prove difficult to enforce. However, this does not mean that the judgment itself lacks substantive value.
I. Conduct an investigation into the property information of the judgment debtor through enforcement procedures.
According to Article 12 of the “Provisions of the Supreme People’s Court on Several Issues Concerning Property Investigation in Civil Enforcement,” if the party obligated to perform fails to fulfill the obligations determined by the effective legal document as notified by the enforcement notice, the people’s court is entitled, through means such as the online enforcement inquiry and control system and on-site investigations, to inquire into the identity information and property information of the party obligated to perform, as well as relevant entities and individuals. Such entities and individuals have a statutory obligation to provide assistance.
In practice, some parties wish to obtain clues about the defendant’s assets early in the litigation stage and apply for property preservation. However, in most regional courts—such as those in Beijing—courts do not proactively investigate the defendant’s asset information during the litigation preservation phase, making it difficult for plaintiffs to gather more asset clues through the preservation procedure. Unlike litigation preservation, the property investigation conducted during the enforcement stage has a clear legal basis: after obtaining a judgment in their favor and entering the enforcement procedure, creditors can... Apply to the court, in accordance with the law, to obtain information on the property of the judgment debtor. To create the foundational conditions for realizing creditor rights.
II. Providing the legal basis for tracing assets under the names of close relatives such as spouses
Article 1064 of the Civil Code stipulates that debts incurred through joint expressions of intent, such as those jointly signed by both spouses or subsequently ratified by one spouse, as well as debts incurred by one spouse in his or her own name during the marriage for the daily living needs of the family, shall be regarded as joint debts of the spouses. Article 70 of the “Interpretation (I) of the Supreme People’s Court on the Application of the Marriage and Family Chapter of the Civil Code of the People’s Republic of China” further clarifies that if a creditor of one spouse provides evidence demonstrating that the property division clause in the divorce agreement has impaired the realization of his or her claim, and requests the annulment of the relevant clause, the people’s court shall, after comprehensively considering factors such as the division of marital joint property, the burden of child support, and fault in the divorce, uphold the request in accordance with the law.
In practice, when some debtors are unable to repay their debts, they may evade their obligations by transferring assets to their spouses’ names, engaging in sham divorces, or gifting assets to their children—rather than genuinely being “without any assets.” According to the Civil Code and relevant judicial interpretations, creditors may assert their rights. Revoke the aforementioned acts that impaired the realization of creditor’s rights and recover the transferred property. However, such claims are predicated on the prior obtaining of a final and enforceable judgment in favor of the claimant.
III. Providing a legal basis for other debt-collection methods, such as subrogation rights.
Article 535 of the Civil Code stipulates that if a debtor’s failure to exercise its creditor’s rights or any accessory rights related to such creditor’s rights impairs the realization of the creditor’s due claims, the creditor may, in its own name, request the People’s Court to exercise by subrogation the debtor’s rights against the counterparty (excluding rights that are exclusively vested in the debtor himself).
Although some debtors themselves lack direct ability to repay their debts, they hold claims such as accounts receivable from third parties. Yet, in order to evade debt, they deliberately fail to assert their rights against these secondary debtors or instruct the secondary debtors to transfer funds into accounts not belonging to them. In such cases, after obtaining a judgment in their favor, creditors may apply for provisional attachment of the secondary debtor’s payable amounts, or, once they have secured relevant evidence pertaining to the secondary debtor, Exercise subrogation rights to sue the secondary debtor. Directly asserting creditor’s rights and exploring expanded pathways for recovering those rights.
4. Strengthen debt-collection pressure through measures such as punishment for dishonesty and criminal charges for refusal to comply.
Article 266 of the Civil Procedure Law stipulates that if the party obligated to perform fails to fulfill the obligations determined by the legal document, the people's court may take measures against such party, including restricting their exit from the country, recording the failure to perform in the credit information system, and publicly announcing information about the failure to perform through media. Relevant authorities shall provide assistance in accordance with the law.
Some debtors have multiple outstanding debts. After obtaining funds for debt repayment, they often prioritize paying off “urgent debts,” while neglecting other obligations. Debts with lenient repayment terms continue to be delayed. According to the aforementioned legal provisions, creditors may apply to have debtors who have failed to comply with effective court judgments listed on the list of discredited persons subject to enforcement, thereby causing them to experience a degree of “social death” in business and professional settings. For those who have the ability to perform but refuse to do so, or who deliberately conceal their assets, judicial detention measures may also be taken in accordance with the law; in cases of serious circumstances, criminal liability for the crime of refusing to execute judgments and rulings may be pursued.
Compared to creditors’ self-collection efforts, the aforementioned legal measures can exert stronger pressure and thereby encourage... When the debtor has the ability to repay debts, our debt shall be repaid with priority. 。
Summary
In current judicial enforcement practice, although a successful judgment does not directly equate to the full realization of a creditor’s claim, it nonetheless provides creditors with multiple avenues for recovering their debts. A successful judgment not only grants creditors statutory rights to request courts to investigate assets, trace and recover transferred property, and exercise subrogation rights, but also empowers them to intensify pressure on debtors through measures such as sanctions against untrustworthy parties and criminal prosecution. If creditors were to give up litigation to protect their rights, the realization of their claims would become even less secure. By obtaining a successful judgment, however, creditors at least retain a legal and effective means of pursuing the recovery of their debts.
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About the Author
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Zhang Bingxu
Beijing Xinglai Law Firm
Lawyer
Bachelor of Laws from Tsinghua University School of Law, and Master of Laws from Washington University in St. Louis. Previously worked at Zhonglun Law Firm in Beijing.
Business areas:
We have extensive legal experience in resolving civil and commercial disputes and in real estate investment and financing. The cases we have handled cover a wide range of areas, including investment and financing disputes, corporate governance, residential property sales, construction projects, and property services. We have also provided specialized legal services for numerous leading domestic real estate and insurance companies in their overseas investments.
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Han Meijun
Beijing Xinglai Law Firm
Partner
Bachelor of Laws from Tsinghua University and Master of Civil Procedure Law from Tsinghua University. Previously worked at Zhonglun Law Firm in Beijing, and in 2025 received the “Rising Star Lawyer Award” at the 10th Guike Annual Conference.
With over seven years of experience in the field of civil and commercial dispute resolution, I have represented clients in dozens of complex and high-profile litigation and arbitration cases. The types of disputes I have handled include equity transfer disputes, wagering contract disputes, private equity fund and trust contract disputes, guarantee contract disputes, private lending disputes, corporate resolution validity disputes, and trade secret infringement disputes. The adjudicating bodies involved in these cases include the Supreme People’s Court, higher people’s courts across various regions, the China International Economic and Trade Arbitration Commission, and the Beijing Arbitration Commission, among other judicial institutions. I specialize in helping clients develop systematic dispute-resolution strategies—from identifying and mitigating transaction risks at the front end and designing optimal business negotiation plans, to assembling pre-litigation evidence chains, formulating preservation strategies, and ultimately conducting effective courtroom advocacy and ensuring successful enforcement and recovery of funds. I provide clients with comprehensive, one-stop services that enable them to stand out in complex legal disputes and achieve a seamless integration of their business objectives and legal values.
In addition to civil and commercial disputes, we also specialize in the cultural and entertainment sectors, with particular expertise in handling disputes related to music and film/TV investments. We have extensive experience in compliance and crisis public relations, providing end-to-end risk management and rights protection solutions for leading platforms, talent agencies, and public figures.
Editing and Layout: Wang Xin
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