Although it may seem that an embargo is a dead end and the only solution is to lose part of our salary or even a property, the reality is that if we still own the property and the embargo and subsequent auction have not yet taken place, we still have time to stop this procedure and safeguard our heritage.
One of the measures that you can carry out is to apply for a mortgage loan through a network of private lenders, which is precisely the type of service that we offer at Crediting. In this article we are going to explain the types of liens that exist, the administrative process they follow, and how you can stop a garnishment by obtaining financing through a particular lender.
Causes leading to an embargo
The two main things that can lead to a garnishment are two: owing money to a public administration or having unpaid installments on a personal loan. In the case of non-payment of mortgages, the most common right now is that an action is taken in payment, which means losing the property but also getting rid of the debt.
Defaults on a personal loan
Personal loans are treacherous, since the debtor responds with all his present and future assets in the event of a default on the debt or any of the loan installments. This means that the bank that has granted us the loan may seize, through a court resolution, the cash, current accounts and debtors' salaries.
Personal loans are usually for rather small amounts, which do not usually exceed € 10,000, so in most cases, through the garnishment of salaries and checking accounts, the debt can be settled after several months or years.
Debts with public administrations
Owing money to the Treasury or Social Security almost automatically means ending up in a garnishment process. You can also end up in a garnishment process for owing money to a city council or local administration.
What and how is seized
When we talk about liens, creditors prefer to settle the debt with assets of the debtor that are as liquid as possible. This means that first the money and the bank account or accounts that are in the name of the owner of the debt will be seized and immobilized, and later less liquid assets will continue to be seized until the value owed is reached. You start by seizing money and then moving down the scale of goods that are more easily convertible into money according to the regulations. The order of goods from most to least liquid according to the embargo and auction regulations is as follows:
- Money in cash and checking accounts
- Money in short-term deposits and savings deposits
- Wages and contributory pensions that are being received
- Real estate, of any type and nature: houses, flats, apartments, commercial premises ...
- Interest and income
- Furniture present in the properties owned by the debtor, as well as the works of art and antiques that are within them
- Movable property, such as vehicles, various objects, boats ...
- Long-term savings deposits
The garnishment of wages and incomes
Wage garnishment is usually the fastest way creditors (whether private or public) use to collect a debt.
The regulations mark that only that part of the salary that does not exceed the SMI can be seized, with reductions in the case of having dependent children or paying mortgages.
If you don't want to see your salary garnished for months or years, the best thing you can do is pay the debt instantly.
Types of embargoes according to the time phase
Also at the legal level there are two types of liens, the lien and the executive lien. Let's see how they differ from each other.
What is a lien
The preventive lien in is one in which the current accounts, assets and real estate of the executed are immobilized so that they cannot use them, sell them or transfer them to another owner. In this way, these assets act as a guarantee for the collection of the debt.
What is an executive embargo
The executive seizure is one in which a judge has effectively ordered that the assets can be retained and subsequently proceed to the sale of them through an auction. With what is obtained in said auction the debt will be paid.
How to cancel a garnishment
The fastest way to cancel a lien is to offer a payment plan to the creditor. The law clearly states that at any time during the garnishment process the debtor has the right to ask the court clerk in charge of the process for an appearance with the creditor to negotiate a debt payment plan. The same happens in the case of auctions, if we are already in this phase.
Ways to cancel a garnishment
There are two ways to cancel a lien, although in general the fastest and the only one that is effective is to pay the debt. Next we are going to see the three assumptions that exist.
- That the garnishment entry is expired. All lien entries expire 4 years after they are included in the Register of Movable Property. If the creditor who registered the garnishment request after 4 years has not renewed it, you can automatically request the cancellation of the garnishment request because it has expired.
- That the debt has been settled. You must go to the Registry of Movable Property with the payment letter, the receipt and the corresponding judicial notification to request the cancellation of the embargo.
Loans to cancel liens
At tzedakahhouse.org we are specialized in opening mortgage loans to cancel liens. If you have a real estate property over which you still hold the title, contact us to access a loan that allows you to cancel your embargo. contact now