Enforcing Non-Dischargeable Debts After Bankruptcy in Japan: The Proper Path to a Writ of Execution

Bankruptcy discharge offers debtors a fresh start by releasing them from most of their pre-bankruptcy debts. However, Japanese bankruptcy law, like that of many other jurisdictions, specifies certain categories of debts as "non-dischargeable" (非免責債権 - hi-menseki saiken). These debts survive the bankruptcy process, and creditors can still seek to enforce them against the discharged debtor. A common example of a non-dischargeable debt is a claim for damages arising from a tort committed by the bankrupt with malicious intent (Bankruptcy Act, Article 253(1)(ii)).

When a creditor's claim is recorded in the bankruptcy claims register (破産債権者表 - hasan saikensha-hyō)—which itself can function as a "title of obligation" (債務名義 - saimu meigi) allowing for compulsory execution—and the creditor believes this claim is non-dischargeable, a procedural question arises: how does the creditor obtain the necessary "writ of execution" (執行文 - shikkōbun) to enforce this claim against the discharged debtor? Specifically, can the creditor file an "action for the grant of a writ of execution" (執行文付与の訴え - shikkōbun fuyo no uttae) under Article 33, Paragraph 1 of the Civil Execution Act to have the court determine the non-dischargeable nature of the claim? A 2014 Supreme Court of Japan decision provided a definitive answer to this question.

Background of the Dispute

The debtor, Y, underwent bankruptcy proceedings, and a bankruptcy discharge order was issued and became final and binding in May 2012. This discharge was duly noted in Y's bankruptcy claims register.

The creditor, X, had a claim of approximately 2.92 million yen recorded as a confirmed bankruptcy claim in Y's bankruptcy claims register. This claim was described as a "right to reimbursement and a claim for damages due to tort, etc." Specifically, it comprised a subrogation claim (as X had acted as a joint guarantor for Y and paid a debt on Y's behalf) and a tort claim for the same amount, alleging that Y's fraudulent conduct had induced X to become a guarantor and consequently suffer losses by having to fulfill the guaranteed debt. During the bankruptcy, X had received a partial distribution of about 620,000 yen from Y's bankruptcy estate.

After Y's discharge, X contended that the remaining portion of this recorded bankruptcy claim was non-dischargeable, specifically falling under the category of a "claim for damages arising from a tort committed by the bankrupt with malicious intent." To enforce this claim, X filed an "action for the grant of a writ of execution" against Y, seeking a writ for the bankruptcy claims register.

The court of first instance dismissed X's action. It held that the question of whether a claim recorded in a bankruptcy claims register constitutes a non-dischargeable debt is not a matter to be determined within the scope of an action for the grant of a writ of execution. The High Court upheld this decision, dismissing X's appeal.

X then appealed to the Supreme Court, arguing that since determining the non-dischargeable nature of a claim is complex and not suitable for the summary examination conducted by a court clerk when issuing a simple writ, an action for the grant of a writ under Article 33(1) of the Civil Execution Act should be available.

The Supreme Court's Decision

The Supreme Court of Japan dismissed X's appeal, affirming the lower courts' decisions. The Court's reasoning was as follows:

1. Limited Scope of an Action for the Grant of a Writ of Execution:
   The Court meticulously examined the text of Article 33, Paragraph 1 of the Civil Execution Act. It concluded that this provision limits the scope of matters that can be審理 (adjudicated) in an action for the grant of a writ of execution to two specific scenarios:
   • When the enforceability of the claim depends on the "arrival of a fact to be proved by the creditor" (e.g., a condition precedent), the action can determine whether that fact has indeed occurred.
   • When execution is sought against a person other than the party named in the original title of obligation (e.g., a successor in interest), or for the benefit of such a person, the action can determine the propriety of such execution.
2. Determining Non-Dischargeability is Outside This Scope:
   The Supreme Court explicitly stated that Article 33(1) does not contemplate the adjudication of whether a confirmed bankruptcy claim recorded in the bankruptcy claims register falls into the category of non-dischargeable debts. The Court referenced its own 1977 First Petty Bench decision (Showa 51 (O) No. 1202, decided November 24, 1977, Minshu Vol. 31, No. 6, p. 943), which had previously established the limited scope of such actions.
3. Creditor Not Unduly Prejudiced – Availability of a Simple Writ of Execution:
   Crucially, the Court reasoned that this interpretation does not leave creditors without a viable path to enforcement or cause them undue hardship. It pointed out that even when a bankruptcy claims register contains a notation that the debtor's discharge order has become final and binding, the court clerk of the court that holds the bankruptcy case records can still issue a simple writ of execution under Article 26 of the Civil Execution Act. This can be done if the clerk, upon reviewing the content of the recorded claim and related documents (such as the original claim filing), determines that the confirmed bankruptcy claim appears to be non-dischargeable based on its nature as described.
4. Conclusion on the Propriety of the Action:
   Based on this analysis, the Supreme Court concluded that it is not permissible for a creditor holding a confirmed bankruptcy claim against a discharged debtor to file an action for the grant of a writ of execution for the bankruptcy claims register on the grounds that the claim is non-dischargeable.

Significance and Analysis of the Decision

This 2014 Supreme Court judgment provides significant clarification on the procedural pathway for enforcing non-dischargeable debts recorded in a bankruptcy claims register.

• Direct Holding: The most direct import of the decision is that an "action for the grant of a writ of execution" is an improper procedural vehicle for establishing that a bankruptcy claim is non-dischargeable. Creditors cannot use this type of lawsuit to obtain a judicial determination on the dischargeability issue as a prerequisite to getting a writ.
• Guidance for Practice via Obiter Dictum: While technically obiter dictum (a statement not strictly necessary for the decision but offering judicial opinion), the Supreme Court's clear statement that a creditor can instead apply for a simple writ of execution (under Civil Execution Act Article 26) from the court clerk is of paramount practical importance. If the non-dischargeable nature of the claim is reasonably apparent from the bankruptcy record itself (e.g., the description of the claim in the claims register and supporting documents), the clerk can issue the writ.
• The Bankruptcy Claims Register as a Title of Obligation:
  It's important to understand the role of the bankruptcy claims register. In Japanese bankruptcy proceedings, creditors exercise their rights by filing their claims. If a claim is acknowledged by the bankruptcy trustee and not objected to by other creditors (or if any objections are resolved in the creditor's favor), the claim becomes "confirmed" (確定した破産債権 - kakutei shita hasan saiken) and is recorded in the bankruptcy claims register. After the bankruptcy proceedings conclude (e.g., through a final distribution and closing of the case, or through abandonment of the estate if there are insufficient assets for distribution), this record in the bankruptcy claims register can serve as a title of obligation under Article 22, No. 7 of the Civil Execution Act. This allows the creditor to pursue compulsory execution against the bankrupt debtor for any undischarged portion of the claim, provided the bankrupt had not successfully objected to the claim during the bankruptcy proceedings.
• Context of Academic Debate: While some minority views argued for either a complete bar to enforcement based on the claims register (requiring creditors to file entirely new lawsuits to obtain a fresh title of obligation) or, conversely, allowing unfettered enforcement (forcing debtors to file an action of objection to claim if they believed the debt was discharged), the prevailing majority view among scholars was that non-dischargeable claims should remain enforceable using the bankruptcy claims register as the title of obligation, and thus a writ of execution should be issuable for such claims. Within this majority camp, however, there was a further divergence: some scholars argued that determining non-dischargeability was too complex for a court clerk's summary examination and thus required an action for the grant of a writ; others believed a simple writ application was sufficient. The Supreme Court's 2014 decision firmly rejected the former view and endorsed the latter, aligning with one stream of the majority academic opinion.
• Procedural Steps for Determining Non-Dischargeability Post-Ruling:
  1. Application for Simple Writ: Based on this judgment, a creditor asserting a non-dischargeable claim against a discharged bankrupt should first apply to the court clerk (of the court handling the bankruptcy records) for a simple writ of execution for the bankruptcy claims register. The clerk will examine the register, the original claim filing documents, reports from the bankruptcy trustee concerning discharge, and other available materials to make a preliminary assessment of whether the claim appears to be non-dischargeable.
  2. Objection to Clerk's Disposition: If either the creditor (if the writ is refused) or the debtor (if the writ is issued) is dissatisfied with the court clerk's decision, they can file an "objection to the grant of a writ of execution" (or to its refusal) with the court itself under Article 32, Paragraph 1 of the Civil Execution Act. This allows a judge to review the clerk's decision. For relatively straightforward non-dischargeable claims, such as those for child support or certain employee wage claims (which are explicitly listed as non-dischargeable in the Bankruptcy Act), this two-step process (clerk's decision followed by judicial review on objection) might resolve the dispute.
  3. Necessity of Subsequent Litigation for Complex Cases: However, the determination of whether a claim is non-dischargeable can be factually and legally complex. For instance, the claim in the present case involved "damages arising from a tort committed by the bankrupt with malicious intent." The prevailing interpretation of "malicious intent" (悪意 - akui) in this context is often "intent to harm" (害意 - gai-i), the establishment of which can require significant factual investigation and legal judgment. Similar complexities can arise with other categories of non-dischargeable debt, such as those incurred through "fraudulent misrepresentation or concealment" or "willful or grossly negligent" acts causing personal injury or death. A court clerk's summary examination, or even a judge's review in an objection proceeding, may not be suitable for definitively resolving such contested issues. Furthermore, decisions made in these writ-related proceedings (whether by a clerk or a judge on objection) do not have res judicata (binding effect on future litigation) concerning the substantive question of whether the debt is actually dischargeable or not.
  4. Avenues for Final Resolution: Consequently, for contentious cases, further litigation is often inevitable to achieve a final and binding resolution of the dischargeability issue:
     • If a writ of execution is ultimately refused (e.g., the clerk refuses, and the creditor's objection to the court is unsuccessful), the creditor who still maintains their claim is non-dischargeable may need to file a new lawsuit against the discharged debtor. This could be a suit for payment to obtain a fresh title of obligation, or potentially a declaratory judgment action seeking a ruling that the specific claim recorded in the bankruptcy claims register is indeed non-dischargeable (thereby "supplementing" the enforceability of the register).
     • Conversely, if a writ of execution is granted to the creditor, the discharged debtor who contends that the claim is actually dischargeable (and thus should not be enforced) can file an "action of objection to claim" under Article 35 of the Civil Execution Act. In this lawsuit, the debtor would argue that the discharge order has created a substantive defense against the enforceability of the claim recorded in the title of obligation.
• Related Issue: Enforcement of Pre-Bankruptcy Titles of Obligation Post-Discharge:
  A related scenario: a creditor attempts to enforce a title of obligation (other than the bankruptcy claims register, e.g., a regular court judgment) that was obtained before the debtor's bankruptcy proceedings commenced, after the debtor has received a discharge. It references a 2014 Tokyo High Court decision concerning a creditor who held a pre-bankruptcy judgment for a tort claim and obtained a writ of execution and an order for attachment of the debtor's assets after the debtor's discharge. The debtor filed an execution appeal against the attachment order, arguing the claim was discharged. The High Court dismissed the debtor's appeal, stating that the question of whether the underlying bankruptcy claim is non-dischargeable is not a matter for the execution court (in the context of an appeal against an attachment order) to decide. It implied that the debtor should raise this issue in an action of objection to claim. (In cases involving pre-bankruptcy titles of obligation, the court clerk issuing the writ of execution might not even be aware of the subsequent bankruptcy and discharge, so a writ might be issued more or less automatically upon application by the creditor.)
  A potential concern with this High Court ruling: its language seems to suggest that even if a claim is manifestly not non-dischargeable, the debtor cannot challenge its enforcement through an execution appeal but must always resort to filing an action of objection to claim. This aspect of the High Court's reasoning is viewed as debatable by some legal scholars.

Conclusion

The 2014 Supreme Court decision provides crucial procedural guidance for creditors seeking to enforce non-dischargeable debts against discharged bankrupts in Japan when their claim is recorded in the bankruptcy claims register. It firmly closes the door on using an "action for the grant of a writ of execution" to litigate the non-dischargeable nature of such claims. Instead, the ruling directs creditors to initially seek a simple writ of execution from the court clerk. If the non-dischargeable character of the claim is not immediately apparent or if disputes arise, these must be resolved through objections concerning the writ itself or, more definitively, through separate substantive lawsuits, such as an action of objection to claim initiated by the debtor or a new action for payment or declaration by the creditor. This approach aims to keep the writ issuance process relatively streamlined while ensuring that complex substantive disputes about dischargeability are adjudicated in appropriate forums with full procedural safeguards.