{"id":2811,"date":"2021-04-27T17:54:32","date_gmt":"2021-04-27T15:54:32","guid":{"rendered":"https:\/\/carlotagonzalez.com\/is-seizing-assets-an-effective-way-of-collecting-debt\/"},"modified":"2021-05-04T16:38:41","modified_gmt":"2021-05-04T14:38:41","slug":"seizing-assets-collecting-debt","status":"publish","type":"post","link":"https:\/\/carlotagonzalez.com\/en\/seizing-assets-collecting-debt\/","title":{"rendered":"Is seizing assets an effective way of collecting debt?"},"content":{"rendered":"\t\t
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Having a court ruling that recognizes your right to collect a debt from a debtor does not guarantee that you will be able to collect the amount due, in whole or in part. This means that a situation may arise where, after spending time and money in legal proceedings to claim an outstanding debt, even if the court rules in your favour, the debtor may not want to voluntarily pay the debt as ordered by the judgment. What can you do in these situations?<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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If a court rules in favour of the debt collector, but the debtor does not voluntarily comply with the resulting obligation, <\/span>proceedings must be commenced to enforce the judgment. <\/b>The purpose of this is to collect the debt by seizing (and subsequently liquidating if necessary) any assets owned by the debtor.\u00a0<\/span><\/p>\n

What assets can and cannot be seized?<\/b><\/h2>\n

Judicial seizure is a procedure that follows a court order and allows <\/span>a debtor’s assets to be seized in order to liquidate them and satisfy a judgment debt<\/b> previously awarded by a court. In Spain, sadly the best-known type of foreclosure is a<\/span> home foreclosure<\/span> <\/a>in the event of mortgage default.\u00a0<\/span><\/p>\n

Other types of property can also be seized in the scope of Article 592 of the<\/span> Spanish Civil Procedure Act<\/span> <\/a>(‘LEC’):<\/span><\/p>\n

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  1. Cash or current accounts of any kind.<\/span><\/li>\n
  2. Receivables that can be realised immediately or in the short term, and titles, securities or other financial instruments that can be traded on official secondary markets.\u00a0<\/span><\/li>\n
  3. Jewellery and works of art.<\/span><\/li>\n
  4. Income in cash, regardless of its source and the reason for its accrual.<\/span><\/li>\n
  5. Interest, income, and revenue of any kind.<\/span><\/li>\n
  6. Movable property or livestock, non-listed shares, titles or securities and company shares.<\/span><\/li>\n
  7. Property.<\/span><\/li>\n
  8. Wages, salaries, pensions, and income from professional and commercial work carried out on a self-employed basis.<\/span><\/li>\n
  9. Receivables and securities that can be realized in the medium and long term.<\/span><\/li>\n<\/ol>\n

    The LEC regulates both the <\/span>order of the assets that can be seized<\/b> (preferably cash and bank accounts rather than other types of assets), since these are assets whose seizure affects debtors the least and are easier to turn into cash, so they are sought first; and the <\/span>limit of the value of the assets<\/b> that can be judicially seized (assets cannot be seized for an amount greater than the debt). This is intended to prevent, for example, a lien on a property for a negligible amount of debt, considering all the negative consequences that this may have for the debtor.\u00a0<\/span><\/p>\n

    The LEC also establishes those <\/span>assets that cannot be seized<\/b> under any circumstances:<\/span><\/p>\n

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    1. Non-transferable assets.<\/span><\/li>\n
    2. Accessory rights that are non-transferable, regardless of the principal.<\/span><\/li>\n
    3. Intrinsically non-estate assets.<\/span><\/li>\n
    4. Assets that cannot be seized under any legal provision.<\/span><\/li>\n<\/ol>\n

      In addition, Article 606 LEC establishes that <\/span>the following assets cannot be seized<\/b>:<\/span><\/p>\n

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      1. Furniture and household items, as well as the clothes of the individual facing foreclosure and their family, insofar as they cannot be considered to be superfluous. In general, assets such as food, fuel, and others which, in the opinion of the court, are deemed reasonably essential for the subsistence of the individual facing foreclosure and their dependents.\u00a0<\/span><\/li>\n
      2. Any books and instruments necessary for the individual undergoing foreclosure to engage in their profession, art, or trade, provided that their value is not proportional to the amount of the debt claimed.<\/span><\/li>\n
      3. Sacred objects and those used for worship in legally recognised religions.<\/span><\/li>\n
      4. The amounts that cannot be seized by Law.<\/span><\/li>\n
      5. Any assets and amounts that cannot be seized under Treaties ratified by Spain.<\/span><\/li>\n<\/ol>\n

        Finally, Article 607 of the LEC regulates the <\/span>seizure of salaries and pensions<\/b>, and establishes that ‘the wages, salary, pension, remuneration or any similar sources of income shall not be seized if they do not exceed the minimum wage amount.’<\/span><\/p>\n

        Situations that may arise if assets are seized<\/b><\/h2>\n

        The fact that the LEC allows seizure of assets and a court recognises this as a possibility (with the limitations discussed in the previous section) does not always mean that there are any assets to be seized, especially when the debtor is a legal person.\u00a0<\/span><\/p>\n

        There are a number of different possible scenarios in this case, which are summarised below:\u00a0<\/span><\/p>\n