Ranking of creditors
The ranking of creditors is the ordering of creditors by payment priority from the sale proceeds — decided by the court, and irrelevant to what the buyer pays.
What it is, why it matters when bidding, and a worked example.
Once the property sells, the proceeds are not shared proportionally: first come creditors with older registered security or a statutory privilege (costs of justice, certain State and employee claims), then ordinary creditors, and any surplus returns to the debtor. That order is the ranking.
For a buyer it has one direct consequence and one indirect. Direct: none. The buyer pays the auction price and receives the property free of encumbrances; how the money is split is not their concern. Indirect: a property with many ranked creditors tends to have a more litigated case, with claims and appeals that can delay the title and the registration.
Understanding the ranking mostly helps in reading the registry certificate with intent: the registration dates that set the order are the same dates that decide whether a lease or an easement can be asserted against the buyer. One chronological axis, used for two different questions.
Example
A property sells for €80,000. Claims filed are €120,000 of bank mortgage (2017), €9,000 of tax debt (2021) and €15,000 of ordinary creditors. The bank, with the oldest security, absorbs essentially all the proceeds; the rest recover nothing. The buyer pays €80,000 and receives the property free of every one of those charges.
Frequently asked questions
Does the ranking affect what I pay?
No. The price is the winning bid. The ranking only decides how that amount is distributed among creditors.
Can a creditor come after the buyer later?
Not for encumbrances that lapsed with the sale. Charges the law makes survive, and obligations attached to the property such as condominium arrears, should be checked before bidding.
Related terms
Go deeper
Encumbrances, occupancy, debts and missing paperwork: what to check before bidding.
Read the full guide