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  • Joseph Marriott

Dation en Paiement: a Substitute for Judicial Foreclosure

Updated: Apr 14

“Dation en paiement” is a French term that translates to “giving in payment.” In Louisiana, a “dation en paiement” is an agreement by and between a creditor and debtor in which the creditor agrees to accept a thing of value in lieu of performance of an obligation, usually a sum of money to satisfy a debt. A dation en paiement is often a quick, efficient way to satisfy a default on real estate and avoid the hassle and costs of judicial foreclosure.


In real estate, a dation en paiement, or “dation,” occurs when a debtor transfers the property to the mortgage holder to satisfy the debt. In common law states, this type of transaction is referred to as a “deed in lieu of foreclosure.” This is a common remedy for a default in a credit sale, in which the seller acts as the lender and the buyer pays back the seller in installments. A dation requires the consent of both the creditor and the debtor. If the debtor refuses to satisfy their debt by dation, the creditor must proceed with judicial foreclosure.


Dations are often beneficial to both the buyer (debtor) and the seller (mortgage holder), as they are quicker and more cost effective than judicial foreclosure proceedings. In a judicial foreclosure, the foreclosed property is seized by the Sherriff and sold at auction, which can take months and incurs court costs and attorney’s fees. The seller is then paid for the remainder of the debt owed, and the buyer is left with nothing. Satisfying a debt by dation allows the seller to quickly regain control over the property, and the buyer can walk away without having to pay the court costs and attorney’s fees incurred by a judicial foreclosure. Additionally, the buyer will not have a foreclosure on their record, which would negatively impact their credit report and make it nearly impossible for them to obtain a mortgage from lenders in the future in order to buy another home. Once the buyer transfers the property back to the seller through dation, the seller releases the buyer from the remainder is its obligation, namely, the mortgage.


If you have any questions regarding a dation en paiement or need assistance with any real estate matters, please contact Johnston Burkhardt at (504)324-2141 or Johnston@qtsnola.com.

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