Having outstanding debts is an issue that can generate anxiety and worry. If you find yourself in this delicate situation, it is important to know what your rights and options are, as well as what consequences can be triggered.
In this blog, we address the key question:
From what debt can you be seized?
Before going into detail, it is essential to note that the embargo is an extreme measure. It is a legal process in which possession of the debtor's assets is taken to cover the debt. It is not an automatic measure, it must follow a legal process before it is carried out.
In Spain, the embargo process is governed by the Civil prosecution law and it is a legal proceeding. This means that if a person has an outstanding debt, the creditor must file a lawsuit to start the garnishment process.
From that moment on, the debtor will have the opportunity to present a defense and settle the debt amicably before the seizure is carried out.
1. What assets can be seized?
In general terms, any asset of the debtor that has economic value is subject to seizure.
Therefore, real estate, bank accounts, wages, vehicles, jewelry or other valuables can be seized.
However, there are assets that cannot be seized, for more information, we must consult Title IV of the monetary execution of the Civil prosecution law, Chapter III, Section 3.
2. How much debt can they seize me with?
Consequently, it is important to highlight that there is no specific amount of debt necessary to carry out an embargo.
However, this measure is considered extreme and is taken only after all negotiation and agreement options have been exhausted.
3. What is the legal procedure to seize assets?
It is important to note that the embargo is not a measure that is taken abruptly or arbitrarily. Before taking such action, a number of legal steps and procedures must be followed, including:
1. Notification of the debt: The creditor must formally notify the debtor of the existence of an outstanding debt and that, if it is not resolved, the possibility of taking legal measures will be considered.
2. Lawsuit: If the debtor does not resolve the debt after being duly notified, the creditor can file a lawsuit to start the foreclosure process.
3. Judgment: Once the lawsuit has been filed, the judge must issue a judgment in favor of the creditor before the embargo can be carried out.
4. Embargo: Once the judicial sentence has been issued, the creditor can proceed with the embargo.
Debtors are usually encouraged to try to settle outstanding debts as soon as possible to avoid the foreclosure process. If it is not possible to pay the debt in full, it is crucial to contact the creditor to reach a payment agreement. In the event that the debtor does not have the resources to pay off the debt, it is possible that he can request a deferment or a reduction of it.
4. Up to what amount can tax debts be divided and deferred?
As of April 15, 2023, the Tax Agency does not require the provision of guarantees in requests for deferral or installment of debts of less than €50.000, regardless of whether the debt is in the voluntary period or in the executive payment period.
This change will take effect on applications for deferrals submitted as of the aforementioned date, while applications processed prior to that date will continue to be governed by the regulations in force at the time of their submission.
This measure will be applied to debts managed by the Tax Agency, the bodies or agencies of the State Public Treasury, and state taxes ceded to the autonomous communities. However, the autonomies' own debts are not affected by this change, although they normally adopt the state criteria.
It should be noted that the amount of the debt will accumulate both to the liability to which the request itself refers and to the rest of the obligations of the same debtor for which the deferment or installment has been requested and not resolved.
If you want more information about the deferral or fractionation of tax debts, you can access the following noticia.
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