Spain Explained

What does embargo mean? – Everything you need to know about embargoes

Like many words, ‘embargoes’ has different connotations in Spain to what it does in the UK. For most British people when you talk about embargoes you picture a prohibition from one country on another. So what does embargo mean?

It comes as something of a shock to some people with Spanish bank accounts to discover that rather than applying to nations, individuals here can be embargoed too.

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The freezing of Spanish bank accounts and the automatic withdrawal of funds from them is something which we have received many inquiries about at Ábaco. Although every case will be slightly different we have written this question and answer article in order to cover some of the main issues that there are when it comes to chasing debts through embargoes.

What does embargo mean?

An embargo happens when a debt remains unpaid. The government office or a court can order an embargo of your bank account in Spain which means that money can be taken directly out of it without your direct permission. If there is insufficient money in the account to cover the debt then assets can also have an embargo against them.

Who is able to arrange an embargo?

An embargo can only be authorised by a judicial authority or administration. It comes from either a court order or from a government public administration office in Spain, such as the tax office. It cannot be organised by an individual against any other unless the demand has passed through the courts and the courts have agreed to an embargo.

Many embargoes are as a result of tax defaults, for example in relation to non payment of IBI (council tax), non-resident and resident income tax. A bank can order an embargo for missed mortgage payments or if you have defaulted on a loan.

How might you be informed that an embargo will take place?

The cause of an embargo is always a debt. If you owe someone money and it has been agreed by the courts or you owe outstanding taxes or payments to a government department such as the tax authority then they will have already notified you that you owe them money. The tax authority does not need to go through the courts to apply an embargo in Spain.

Following notification, if you still haven’t paid the debt, then an embargo might be arranged but you should be notified of this too. Sometimes people miss their notifications because they are non-residents and no-one is there to sign for or receive the notification when it arrives at the house. This is one reason why it is beneficial to have fiscal representation in Spain if you are a non-resident.

Further notification might be made in the BOE. This is the Boletín Official del Estado  However, it is highly unlikely that you will see this as it changes daily and is virtually impossible to check on a regular basis. We advise non-resident clients to ask a neighbour to check their letterbox for notification of undelivered items requiring a signature. Of course, having a fiscal representative can help ensure no unwanted notifications are received too.

How will you know there is an embargo?

The authority who is calling in the debt will let you know that a debt needs to be paid first. They will inform you that if the debt remains unpaid then an embargo may be made. As mentioned above, the notifications are usually sent to your Spanish address which is when the problems can occur.

If you have a fiscal representative in Spain who takes care of your taxes for you then you should not owe the Tax Authority any money in the first place. However, if for some reason it was found that tax was still outstanding, your representative would receive the notification enabling them to find out what the problem is and rectify it before an embargo takes place.

You can ask your bank to keep you informed in case there is an embargo but this is likely to be after the event. If you know there is the possibility of an embargo and/or that a bill remains unpaid you could ask the issuing authority to let you know if one is about to take place.

What steps should you take once you know there is an embargo on your account?

Your first step is to contact your bank and ask them which authority has decreed the embargo. Having this information, you will then need to contact the source of the embargo directly to check the total amount that you owe and must pay to settle the debt.

There should also be a reference number on the embargo itself which will give an indication of which department is responsible.

Once you know how much you owe you can either pay the debt directly to have the embargo removed or keep the embargo until the total amount is withdrawn from your account.

What preventative measures can you take to make sure this doesn’t happen to you?

The most important action you can take is to keep your accounts in order. Many embargoes are the result of tax payment errors and debts. Having a fiscal representative can help ensure that taxes are paid on time and you have no debts with the Spanish Tax Authority.

Make sure that you keep up your payments with other organizations and departments too. Loans and mortgage payments can be another source of embargoes and must be kept up to and paid on time. There is little flexibility in the system, so don’t expect your bank or mortgage issuer to do the chasing. If you don’t pay, an embargo could well be the next step.

If you are having problems making a payment then do try approaching the relevant department, authority or bank. It’s in everyone’s interest to find a solution and the problem is more difficult to rectify afterwards. It’s not easy approaching your mortgage lender, for example, but once the discussion is in progress you will at least know what to expect.

If your salary/pension is paid into the bank account are you still able to access some money to live on?

Yes. The embargo only freezes the amount owed and other funds should be available to you. A specified living amount is also protected from the embargo in Spain. Only an amount exceeding the minimum wage established by the government can be embargoed.

This means that currently around € 707,70 (2017) should still be free for you to use. Anything above this, however, would go towards payment of the debt until the total embargo amount is met. Your utility bill payments should also still be honoured if there is more in your account than the embargoed amount.

In some cases an embargo might be ordered on assets instead such as a car or property.

Can you reach an agreement whereby you pay in instalments?

Payment in installments can only be agreed before the embargo is settled. This is another good reason for making sure you open up a dialogue with the authority you owe money to. Prior to the embargo you can approach them and negotiate a way of paying off the debt in smaller chunks.

If the embargo is already ordered and your account is frozen, you can only agree the payment in installments where part of the debt has not yet been embargoed.

Can you appeal?

When you are notified of the embargo you will have a window in which to appeal. This is another reason why it is so important to have some arrangements in place to receive mail or a representative to receive it for you.

Can you apply to embargo someone else’s bank account as an individual who is owed money?

Yes, but only through the judicial process. You will need to bring a lawsuit against the debtor to court and ask for an embargo as a preventative measure in case of non payment of the debt. The court will then decide whether to decree this or not.

Is it just bank accounts that are embargoed or can property be embargoed too?  

Properties and other assets can be embargoed as well. There is an order of assets that is established by law:

  • money and bank accounts
  • credits and rights that can be applied to in the short term e.g. shares, deposits and other financial products
  • jewellery and art
  • rental incomes
  • interest and other forms of income
  • movable assets e.g. car, boat or anything that can be sold
  • shares in companies
  • property
  • salaries, pensions and income from work
  • credits and rights that can be applied to in the long term
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What is the difference between having an embargo on your account and your account being frozen?

An embargo is always linked to a debt and is ordered by an authority. It means that money will be removed from your account to meet the amount of the embargo. This might be a one off payment if there are sufficient funds or last over a period of months, or even years, if not. You can still use your account to access any remaining money which will also go to pay your bills.

An account can be frozen for many other reasons. For example, if one of the account holders has died in the case of a joint account. It can also be frozen if the bank does not have any identification documents for you on record. Quite recently banks were requesting that people bring in their passports in order to ensure they had the correct identification and residence status on file.

If your bank account is frozen the good news is that usually your direct debits and utility bills will continue to be paid and your bank should keep you informed about the situation.

Advice

Embargoes are a part of the way in which the system works in Spain. Understanding their function and how to avoid them will hopefully mean that you never need to know more about them. However, If unfortunately at any stage you find yourself in such a situation, you can contact us and we can recommend a law firm to you who can help with this type of case.

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38 comments

Steven marlow

25 September, 2017 12:33 pm

Question.
Question.
My car has an embargo due to default of payment of the hp agreement.
I was orderd by the court to pay the outstanding amount plus costs and intrest ,this icreased the debt by over 50 o/o ,However i have now paid almost all the debt back . Now i want to sell the car ,how can i get the embargo removed.?
Thanks.

Suzanne O'Connell

26 September, 2017 10:20 am

Hi Steven

Hi Steven

Your best bet is to talk to the business that put the embargo on in the first place. Once the debt is paid in full then the embargo should be lifted. If you have not paid all of it yet then they are the ones that you should clarify with when the outstanding amount will be paid. 

Ray Frank Doncaster

9 November, 2017 12:08 pm

Hi,
Hi,
My friend is selling her apartment in Spain to a Russian. The outstanding mortgage is 70,000 Euros, however the best deal she can get is 55,000 euros leaving 15,000 still to pay the spanish bank. This does not seem to be a problem, only that she is getting on in years and wonders what will happen to her debt if/when she dies?
Kind regards

Suzanne O'Connell

15 November, 2017 12:01 pm

Hi Ray

Hi Ray

The debts would pass to her inheritors. It is unlikely that the bank would allow her to have an unsecured debt so they would probably make her have a life insurance to cover it. 

Sally Hill

15 November, 2017 8:42 pm

How much does it cost to lift
How much does it cost to lift an embargo placed on a property after the debt has been paid please

Suzanne O'Connell

23 November, 2017 11:23 am

If it has been registered

If it has been registered against the property the same note needs to be removed and this could incur a cost. However, this is normally included in the legal costs charged by the claimant and so will be paid by them once you have settled the debt. You should check though if this is the case. 

Kieran

21 February, 2018 7:28 am

Hi, we have a holiday home in
Hi, we have a holiday home in Spain, & we want to buy a second hand Car, the dealer told me it has an embargo on it, but it will be removed next year, he tells me if I sign to say I know about the embargo all is ok( tells me the fine has been paid)but I’ve heard elsewhere you can’t buy a car with an embargo on it? Please can you clarify, thank you

Suzanne O'Connell

27 February, 2018 3:16 pm

Hi Kieran

Hi Kieran

Personally I would not advise you, whatever you are told, to buy a car that has an embargo on it. 

Fiona Coulter

14 July, 2018 10:50 pm

My friend has had his Spanish
My friend has had his Spanish bank account frozen and now they’re keeping his money. He has no debt there. He’s Mexican and now lives Scotland. There’s €1800 in his a/c. Can they do this?
Any help greatly appreciated. Fiona

Suzanne O'Connell

16 July, 2018 5:58 am

Hi Fiona

Hi Fiona

Yes, they can do this. Your friend should ask his bank for the reference of the authority who have called for the embargo. He must then approach them to find out more about what exactly it is for. 

Peter Byrne

8 February, 2019 11:34 am

Hello,
Hello,
Can a Spanish court embargo my Irish and American pensions?

Suzanne O'Connell

13 February, 2019 10:55 am

Hi Peter

Hi Peter

They can embargo cars, bank accounts, houses or other assets. As the pension does not come from Spain I would assume they couldn't embargo it. 

Melanie

1 March, 2019 12:25 pm

I have a debt with Hacienda
I have a debt with Hacienda and have had the money in my account embargoed. Although registered as unemployed for now, can they do this and leave me with nothing? Can they also embargo my car?

Suzanne O'Connell

12 March, 2019 12:19 pm

Hi Melanie

Hi Melanie

Until the debt is paid in full the account will be blocked and if they wish they could embargo the car or property

Deena Currie

7 April, 2019 12:45 pm

I have had to leave the Spain
I have had to leave the Spain due to an embargo as every penny I earnt the Haceienda took. It is for quite a large amount as it was a property sell and divorce all at the same time. Bad legal advice and the tax never was paid.
Can I enter the country still or do I run the risk of being detained at the airport?

Best
D Currie

Suzanne O'Connell

14 April, 2019 6:11 pm

Hi Deena

Hi Deena

There is a difference between tax breaches and tax offences. The first ones can be minor, serious or very serious and they only entail monetary fines. A tax offence is committed when the amount defrauded exceeds 120.000 euros and in that case, prison sentence and higher monetary fines apply. However, committing an offence does not necessary lead to an immediate detention, there must be a writ of summons first of all, a trial, and finally, a sentence. In any case, if you are thinking of coming to Spain or maybe buying a property here, our recommendation is that you try to settle the tax payment with Hacienda so they cannot seize your assets again. Also, if you may have commited a tax offence, it would be advisable to contact a specialized lawyer in this field in order to avoid undesired consequences. 

Gunay

4 November, 2019 9:15 am

Good day.
How the process of embargo works.For the execution of the tax arrears by Spanish Tax Authority, is the embargo is passed on to all active bank accounts of the debtor’s? And is it possible for each bank accounts can be charged with the same amount at the same time, or how this mechanism work? And another inquiry is about how long the recovering process take for over charging with Spanis Tax Authority if the separate banks charged the same taxpayer on the same amount? Thanks in advance.

Oscar Paoli

5 November, 2019 1:56 pm

Hello Gunay,

The embargoes can be placed on all your different accounts in an attempt to guarantee that the debt will be paid. However, if you failed to pay the debt, they would take the amount due from that frozen balance, but only once. If, for some reason, they took the amount due more than once, you should be able to claim a refund (‘devolución de ingresos indebidos’) to the Spanish Tax Authority. There is no fixed period for the reinbursement, but from our own experience, it could take up to 8 months.

With kind regards,

Ábaco Advisers

Andrew osman

7 November, 2019 1:59 pm

Hi i wonder if you can advise me please. I had a spanish mortgage out about 15 years ago and couldnt pay it so havnt paid it for 9 years and heard nothing from them so assumed they had sold the prperty and payed it up. Now i have heard from a spanish solicitor saying i owe the money. Could you please advise. Many thanks Andree Osman

Oscar Paoli

12 November, 2019 4:30 pm

Dear Andrew,

You should contact the Spanish solicitor who is asking for money in order to ask for a breakdown of costs to know the reason of this claim.

With kind regards,

Ábaco Advisers

Lindy

12 November, 2019 6:33 pm

If you are behind with payments to a department store can you be embargoed.

Oscar Paoli

13 November, 2019 8:57 am

Hi Lindy,
This could be possible.
Kind regards,
Ábaco Advisers

George Foster

7 January, 2020 9:39 pm

we own our property in Spain can we still put it up for sale if we still owe some non resident tax on our pensions we have paid it up to date but they telling my partner he owes more the property we own 50-50 and I,m up to date

Oscar Paoli

8 January, 2020 9:51 am

Hi George,
No problem at all, you will just have to pay off all outstanding debts with the sale of the property.
With kind regards,
Ábaco Advisers

Greg

15 January, 2020 9:50 pm

How likely is it that a persons car will be embargoed and sold to pay a debt , if there are no other assets ? A friend has been court ordered to return a property deposit but thinks the judgement unfair. They don’t have sufficient funds in the bank so an embargo would be useless. They rent and have an old car that would not cover the debt anyway. Will this just be written off if not paid ?

Oscar Paoli

17 January, 2020 1:30 pm

Hi Greg,

If there is a debt to be paid, they will try to recover it by all means, that is, it will not be written off until it is settled. The first thing that gets embargoed is the bank account or any incomes you may have. If there are not sufficient funds to cover the debt, they will also embargo the car, even though its value is not high enough to pay it off. Moreover, if it gets sold but its price doesn’t cover the debt, then the remaining amount is still owed.

With kind regards,

Ábaco Advisers

Louis prichard -gordon

23 January, 2020 9:24 pm

My wife is a Spanish citizen living in uk ,she had an embargo in Spain but no properties or money there so court could no take anything,now she needs to register in the spanish consulate because brexit but she’s afraid Spanish court will find her and seize her salary /properties in uk ,is this possible ??

Oscar Paoli

29 January, 2020 2:47 pm

Hi,

Spanish authorities could still be able to find due to cross-country data sharing for this type of purposes. Obviously if she registers in the spanish consulate it will be much easier for them to know to embargo any possible goods. Our suggestion is of course to fix the situation regarding the embargo to avoid any possible issues.

With kind regards,

Ábaco Advisers

Gareth.

7 February, 2020 9:49 am

Hello,
I am a Non resident in spain and own a property,( Holiday home ) i have recently paid my Non Resisdent Tax which i missed for 4 years plus fines incurred. They now say i need to pay income tax for previous years which i have paid in the UK and have records to prove this. I had to produce a Tax Certificate from the HMRC which i did but because it was late they are trying to fine me in excess of 35,000 and are threatning to put an embargo on my property. Firstly i have employed a Tax Lawyer to fight this at some expense, secondly can they force me to sell the property or with the embargo sit there until a sale occurs ?

Oscar Paoli

11 February, 2020 3:17 pm

Hi,
The embargo will sit there until you have paid the debt or until when you sell the property.
Kind regards,
Ábaco Advisers

Jane Gray

9 February, 2020 4:48 pm

I had 2 bank accounts embargoed in 2009, It went to court and I won my appeal, so far I have only received the small amount from one account returned and that was January 2019, I am still waiting for the other larger amount from the second account, is this normal practice here in Spain, my solicitor advises me to wait as the tax office dont take it lightly giving it back and I might end up at the bottom of the pile once more. I received confirmation from the tax office in November 2018 to say I would be getting the money back.

Oscar Paoli

10 February, 2020 4:54 pm

Hi Jane,
Yes, these matters can take time, but you can always ask your solicitor to check the status again to see how long the process can take.
Kind regards,
Ábaco Advisers

Tracey

25 March, 2020 2:00 pm

My husband has an embargo on his account for 15.0000 euros and because he has no money in his account there are taking it out of my account l am a resident and he is not each month my money gets paid into my account will they take all my salary as l have my our Bill’s to pay and to live

Oscar Paoli

26 March, 2020 4:13 pm

Hi Tracey,
If they have started to take those amounts they will unfortunately continue to do so until the embargo is settled.
Should you have any further queries please do not hesitate to contact us at info@abacoadvisers.com
Kind regards,
Ábaco Advisers

David Thomas Stocker

21 April, 2020 7:22 pm

Hi my wife which I’m divorce know I brought a plot in 1998 build a villa.
Finish in 2000. And Architect handed a completion certificate. But my wife never registered the property. And never told me. Until she served divorce paper on me. My questions is. She registered it in 2012. Iv paid back taxes. To 20000 plus community taxes. Paid all bills as electric , ibb water alarm, etc all in my name. And she has refused to pay any bills. Plus main. Pool garden
Question can I embargo her and get the villa in my own name not 50%. I’m a resident here.
Kind regards
David Stocker.

Oscar Paoli

22 April, 2020 11:29 am

Dear Mr. Stocker,

Thanks for exposing your situation. We would need some more information in order to give you a personalised advice, but in general terms we can confirm that there are different legal ways to transfer your wife’s 50% into your name if there is an agreement between you two. If no agreement can be reached by you, it can also be sorted out through a judicial process at Court. An embargo is a judicial measure that in this case could be use a preventive measure, but it won’t change the property into your name automatically. A legal process must be followed until you obtain a final resollution from the judge.

I hope this information is of help. Please, feel free to contact us for further information.

Best regards,

Ábaco Advisers

raymond speers

12 May, 2020 7:58 am

morning
can I do a personal embargo from spain on a british account, on money owed to me here in spain,
thank you

Oscar Paoli

18 May, 2020 2:57 pm

Dear Sir,

Yes, it exists the possibility to register an embargo on a foreign account on basis to the rules of the Regulation (EU) No. 655/2014 of the European Parliament relating the assurance and fulfillment of monetary sentences and enforcement of public documents within the Estates of the EU. Nevertheless, it requires a previous process at Court and it will be the judge who approves this option as a preventive measure or as enforcement or execution of a final resolution. You can contact us for specific advice.

Kind regards,

Ábaco Advisers