Movable Property Mortgage Registration Protocol under PRC Civil Code
Registration on the PBOC Zhongdengwang platform within ten days of delivery grants super priority over earlier floating liens under PRC Civil Code Article 416.
Judicial Auction Realization
Meaning
A court-ordered process converts seized assets into cash through a public bidding system to satisfy the debts of a defaulting party. The process of judicial auction realization is carried out on designated online platforms under the supervision of the local people’s court. This auction represents the final step in the execution of a civil judgment.
Procedural Phase
Before the asset is put up for sale, the court appoints a qualified evaluation agency to determine the reserve price of the machinery or real estate. Under the rules of judicial auction realization, this valuation must be completed within a set timeframe, and the report must be served to all parties involved. If the first auction fails to attract a buyer, the court holds a second auction with a reduced starting price, which can be up to twenty percent lower than the initial reserve.
This structured process protects the interests of both the creditor and the debtor.
Bidding Execution
The actual bidding takes place on public platforms such as those operated by major e-commerce websites, allowing a wide pool of buyers to participate transparently. Bidders must pay a deposit before they can place a bid, which prevents frivolous bids from disrupting the judicial sale. Once the bidding closes, the highest bidder must pay the balance to the court’s account within the specified period.
This online format has replaced traditional physical auctions to reduce costs and prevent bid rigging.
Fund Distribution
After the cash is received, the court distributes the funds to the secured creditors in order of priority. Tax liabilities and unpaid wages must be settled before the remaining funds are allocated to the unsecured creditors. This distribution completes the asset recovery process.