[Direct answer]In the Beijing area, the proportion of participation in distribution is, in principle, that after deducting the execution fees and satisfying the priority claims, the ordinary claims shall be satisfied in proportion to their respective claim amounts in the total ordinary claims. According to the distribution rules determined by the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and implemented from January 1, 2024) and relevant judicial interpretations, the proceeds from execution shall first be deducted for execution fees, and then the claims with priority claims such as mortgage rights shall be satisfied. The remaining part shall be distributed proportionally by the ordinary creditors who obtained the basis for execution. The interest on the debt and the penalty shall be included in the claim amount according to the effective document and shall be involved in the calculation. The specific proportion shall be determined by the execution court in the distribution plan. If the parties have objections, they may raise them in accordance with the law and may refer to the relevant provisions for reference.Creditor's rights and debts, and enforcement casesColumn.

I. Problem Background and Typical Scenarios

Such problems are common in several situations: First, when the amounts of multiple ordinary claims are vastly different, small creditors are concerned about whether they can receive payments proportionally; Second, when some claims are secured and others are not, disputes arise over the priority and ranking of ordinary claims; Third, how to include interest, delay in performance interest, and penalties in the distribution base in addition to the principal; Fourth, how to deduct litigation fees, preservation fees, and enforcement costs; Fifth, when the first-seized creditor claims a larger share and other creditors object. In the enforcement practice of Beijing courts, it is a basic principle that ordinary creditors receive compensation proportionally. In some regions, the practice of giving appropriate preferences to first-seized creditors needs to be subject to local enforcement norms.

II. Key points of contention

The first focus is on the determination of the amount of the creditor's claim, including the principal, the starting and ending dates of interest, and the interest rate standard. The second focus is on the scope and order of priority claims, such as how to rank mortgage rights, priority compensation rights for construction project payments, and workers' claims. The third focus is on the order of deduction of execution fees and the costs of realizing security rights. The fourth focus is on whether the first-seized creditor and the waiting-for-seizure creditor are compensated at the same rate. The fifth focus is on whether non-maturity claims can participate in the distribution. The sixth focus is on the handling of objections to the distribution plan and lawsuits against the execution of the distribution plan. Specifically, the current effective judicial interpretations and the execution court's guidelines shall prevail. For the ranking of special claims such as priority rights for construction project payments, reference may be made to relevant provisions.Real estate transactions and construction projectsColumn.

III. Professional analysis by Henglue Law Firm

Based on the practical experience of lawyers from our firm participating in the execution of distribution matters, most disputes over distribution ratios stem from the determination of the amount of claims and the order of repayment. Common situations include: interest claimed at an agreed-upon rate exceeding the judicial protection cap being reduced, directly affecting the repayment ratio for all creditors; disagreements over whether late payment interest should be included in the distribution base; mortgage proceeds being used only to repay the mortgaged assets and not extending to all unsecured claims; and some creditors claiming a larger share on the grounds of having obtained preservation orders before others, triggering objections from other creditors. A prudent approach is to check the amount of claims, priority certificates, and expense deduction items item by item after receiving the distribution plan. If any calculation errors or improper priority orders are found, objections should be raised in writing within the statutory objection period. If dissatisfied with the results of the objection handling, a lawsuit challenging the distribution plan should be filed in accordance with the law to ensure that the calculation of distribution ratios complies with the rules.

IV. Practical suggestions and legal basis

Action suggestions: 1. Accurately calculate your own creditor's rights, listing the principal, interest, penalties, and costs of realizing the creditor's rights separately and attaching the calculation basis; 2. Priority creditors should submit mortgage registration and other supporting documents to claim priority compensation from the specific sale proceeds; 3. After receiving the distribution plan, check whether the deduction of enforcement fees and the calculation of each creditor's amount and proportion are correct; 4. If you have objections to the plan, first raise them in writing. If you disagree with the objections of other creditors, you may file an objection lawsuit in accordance with the law; 5. If the debtor is insolvent and an enterprise legal person, you should promote the conversion of enforcement to bankruptcy for liquidation according to the bankruptcy procedures. Legal basis: The rules on the order and proportion of distribution of compensation are stipulated in the relevant judicial interpretations of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and effective from January 1, 2024); Articles 394 and 410 of the Civil Code of the People's Republic of China (effective on January 1, 2021) establish the rules of priority compensation for mortgage rights. Application and objection points can be referred to for reference.Special services and other casesColumn.

5. Henglu Law Firm's Advice

Risk Warning: Firstly, proportional compensation means that most participants in distribution cases cannot be fully repaid, so there should be reasonable expectations about the recovery rate; Secondly, the amount of the creditor's claim directly affects the proportion, and the claims for interest and breach of contract must be based on the law; Thirdly, there is a time limit for objections to the distribution plan, and any objections made after the deadline will be deemed as an acceptance of the plan; Fourthly, the lack of priority certificates will result in the claim being treated as an ordinary creditor's claim. It is recommended to proceed through the following steps:Beijing Henglue Law FirmTo understand the allocation rules, please refer to the corresponding column on the official website. For major creditor's rights, it is advisable to entrust a lawyer to participate in the review of the plan and the objection procedure.

VI. Frequently Asked Questions

Q1: What is the distribution ratio of ordinary claims?

The distribution shall be made in proportion to the amount of the creditor's claim in the total amount of ordinary claims. The execution proceeds shall first be deducted from the execution expenses, and then used to repay the priority claims such as the mortgage right. The remaining portion shall be repaid to the ordinary creditors who have obtained the execution basis in proportion to their respective claim amounts. For example, if the total amount of ordinary claims is 5 million yuan and a certain creditor's claim is 500,000 yuan, in theory, the creditor can participate in the distribution of the remaining proceeds at a ratio of 10%. The actual amount shall be subject to the calculation of the execution court.

Q2: How is the mortgage claim calculated in the distribution process?

The mortgagee shall be given priority compensation for the proceeds from the sale of the mortgaged property, and shall not be subject to pro rata distribution with other ordinary creditors. After the mortgaged property is sold, the disposal expenses shall be deducted first, and the principal and interest of the mortgage debt shall be fully repaid; the insufficient part shall be converted into ordinary creditors and participate in the distribution on a pro rata basis; the proceeds from the sale of other unsecured property shall not be related to the priority creditor, and the ordinary creditors shall be compensated on a pro rata basis. To claim priority compensation, the mortgage registration certificate shall be submitted. Without the certificate, it shall only be treated as an ordinary creditor.

Q3: Can the interest and penalty fees be included in the distribution?

Yes. The interest and penalty specified in the effective document are included in the calculation of the proportion of the creditor's claim, and the interest for late performance can generally be claimed. However, the part of the agreed interest rate exceeding the judicial protection cap will be reduced. It is recommended to submit the calculation method and the deadline specified in the effective judgment, actively calculate the total amount of the creditor's claim and attach the details, so as to avoid affecting the recovery ratio due to improper claims being reduced.

Q4: Can the first creditor get a larger share?

In principle, ordinary creditors are compensated in proportion, and the first attachment does not necessarily have priority. In some regions, the implementation norms or practical guidelines give appropriate preference to the first attachment creditor, which results in regional differences. In most cases, the creditors who participate in the distribution after the attachment will be compensated in proportion with the first attachment creditor. Whether the distribution is fair or not shall be subject to the norms applied by the execution court. If other creditors believe that the distribution is improper, they may raise objections in writing within the objection period.

Q5: How can I protect my rights if I'm not satisfied with the distribution ratio?

First, raise objections in writing within the statutory time limit after receiving the distribution plan; if other creditors raise objections to the objections, they may oppose the creditor's lawsuit against the distribution plan; if the claim for priority repayment is not recognized, the claimant may also raise the claim in the lawsuit. It is recommended to simultaneously preserve the creditor's vouchers, calculation basis, and the text of the distribution plan, and refer to them when necessaryCreditor's rights and debts, and enforcement casesThe program also commissioned lawyers to review the calculation process of the plan.

This article is written based on the common judicial interpretations in the Beijing area. If the case occurs in other regions, it is recommended to consult local lawyers to verify the regional differences.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current effective laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.