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Seizure of Assets in Portugal

Seizure of Assets in Portugal

In Portugal, when a writ of execution has been issued, the bailiff can put in action the compulsory measures provided by the law.

All the debtor’s liable assets are subject to execution and seizure procedure. In cases specified by law, third party’s assets can be seized, provided that implementation has been filed against third parties.

The law provides that the debtor’s immovable property, movable property, rights and expectations of acquisition, allowances or wages, bank deposits, undivided property, shares in companies and business establishments may be subject to enforcement procedures.

Also, there are certain legal limits of attachment, which make some goods not eligible for this procedure, in part or subject to certain conditions:

– items or inalienable rights;

– property in the public domain of the State and other public bodies;

– objects whose seizure is offensive to good morals or lacks of economic justification due to the market value;

– objects specially designed for the development of public worship;

– the necessary equipment for the disabled persons or certain items intended to treat patients;

There are also exempted from the seizure procedure monies representing two thirds of the debtor’s salaries, wages or benefits of a similar nature and two thirds of periodic benefits paid as retirement or any other social benefit, insurance, compensation for accident or annuity, pension or any other of a similar nature.

When the debtor is unemployed, but has monies in bank accounts, cash or in other forms, the law provided that the equivalent of three minimum wages can not be seized.

However, the Court may allow the debtor to keep a higher amount when the debtor brings strong proofs that his family’s needs exceed the amount provided by the law.

The Court may also allow postponing the seizure procedure, but no longer than one year. 

When a final decision is issued the bailiff assumes the case and starts the compulsory actions in order to recover the debt.

In first instance, the bailiff draws up a list with the debtor assets and arranges them in a priority list used in case of selling.

As a general rule, the bailiff must inform the debtor about each action taken against his assets.

Third parties involved must be announced about the debtor’s status and about the risk to seize the goods joined.

When a bank stands as a third party, an official note that contains information about the procedure is sent to the bank institution. From that moment until the complete fulfilment of the claim the debtor can not dispose of his monies and any payment is considered invalid. The minimum amount provided by the law makes an exemption to this situation.  

The debtor’s bank deposits are the first to be seized in order to fulfil the claim. When the debt is not entirely paid after this action, the bailiff will start the selling procedure of the debtor’s remaining assets. This procedure is usually held in a public auction.

Each of the debtor’s assets is sold, considering the priority list, until the claim is fulfilled. When the debt (and the legal costs involved) is paid, the debtor’s remaining assets are out of executing incidence.

When the debtor is a legal entity, the insolvency is the procedure used for recovering the debt.

The insolvency procedure aims to pay the debts to all creditors by liquidating the company’s assets or by collecting the enforceable income.