Current account seizure: how it works and what are the limits

How does it work seizure of the current account and what are the legal limits for the implementation of the measure? This is one of the questions that concern more and more citizens lately: thanks to the possible introduction of new procedures in the draft Budget Law 2024the topic has become very topical again.

Broadly speaking, the seizure of a checking account can be defined as a usual procedure aimed at debt collection. In practice, the debtor’s account is blocked so that the authorities can withdraw the amount required to pay the creditor. However, this measure can only be applied in certain special cases and, above all, must comply with the precise limits set by law.

What is a bank account freeze?

As already mentioned, the seizure of the current account is a measure provided for the recovery of a credit which, for various reasons, the debtor has not paid. This process is fully covered in seizures by third partiesregulated by articles 492 and 543 of the Code of Civil Procedure, because it implies third issue: the bank or credit institution where the money is deposited. It is therefore a very different measure compared to other assets benefiting the debtor, such as confiscation of the first residencealso known as confiscation of real estate: in this case apparently no third parties are involved.

Seizure of the current account is not an automatic process, but occurs after it is established that the debtor is unable to pay the debt independently, voluntarily or for other reasons. For this reason, the measure is applied only after the issuance of a executive title – such as injunctions or a penalty – with the intervention of a judicial officer.

The phases of seizing bank accounts

Precisely because the existence of an enforceable title is the condition for the initiation of the expropriation procedure by third parties, the seizure procedure of the current account follows several phases.

As it is easy to imagine, the first phase is represented by the acquisition of the enforcement title on the accrued credit. When the creditor is unable to obtain payment of what is owed to him, after trying to negotiate with the creditor for the repayment of the amount or installment thereof, he may obtain official document which certifies the existence of the debt. These documents include:

  • public documents confirmation of the loan of money, signed in the presence of a notary public;
  • mortgages, checks and bills of exchange;
  • conciliation documents signed by both parties.
  • sentences of conviction;
  • insurance decreesas long as 40 days have passed since their notification.

Once the writ is obtained and the legal restrictions are met, an application is first forwarded order to the debtor. If the latter does not pay the debt within ten days, the bailiff may proceed with a transfer a seizure act to the credit institution. At this point, the bank freezes an amount of money equal to the same debt in the debtor’s account, which the current account holder will no longer be able to use. However, before the money is actually paid to the creditor, other steps must be completed:

  • the debtor has 20 days from the notification of the document to oppose the exclusion, for example if the debt does not actually exist. If the objection is accepted, the blocking process is blocked.
  • if the objection is rejected or not submitted after 20 days the amount is assigned to the creditor. If there are sufficient funds to pay off the debt in full, the case is closed. Otherwise, you can proceed with other actions for the part of the money that has not yet been paid.

Seizure by individuals and the Revenue Agency

Naturally, the debt collection process – and therefore seizure by third parties – can be requested either by a private creditor that fromRevenue Agencyfor example presence of accumulated debts to the State.

While a private checking account seizure requires an enforcement order, such as a penalty or injunction, the Revenue Service can forward the request to the bank without the permission of a judge. In this case, after notifying the credit institution and the debtor himself, the latter has 60 days to proceed independently with the payment, after which the amount will be expropriated.

The limitations of seizing bank accounts

As shown in the previous paragraphs, the seizure of a current account is not an automatic process: an executive order and the intervention of a judicial officer are required, except for debts contracted with the Revenue Agency. Furthermore, there are precise limits of application: the legislation on the subject is very complex, so which ones are most relevant?

The “living minimum” and wage garnishment

As a rule, the seizure of the current account does not lead to a seizure of the entire amount deposited in the bank, but rather to a so-called “vital minimum“. In other words, the portion of the money that exceeds can be confiscated triple the social allowance: considering a current check of 502.27 euros, the measure will concern the excess amounts 1,509.81 euros.

However, that’s not all: if the seized checking account is used forsalary credit, so there are recurring payments, the subsistence minimum is equal to twice the social benefit, i.e. 1,006.54 euros. In this case, however, certain limits apply:

  • is it possible to seize 1/5 of the salary for work debts?
  • it is possible to confiscate 1/3 of the salary if the debt is for alimony provided for by law.

Despite common beliefs, it is therefore easy to understand that the seizure of the current account does not imply the complete freezing of the funds available to the debtor. In practice, the latter will be able to continue to withdraw from the account:

  • the part of the wage relating to the subsistence minimum;
  • the part of the money deposited in excess of the value of the debt to be paid.

However, it is useful to remember that banks could predict specific limitations on functions in the presence of legal proceedings, in accordance with the agreements concluded with your credit institution. Again, it is worth remembering that the creditor will be able to request the expropriation of both the value of the credit and the interest and expenses incurred to obtain it, for a maximum amount of the credit itself increased by half.

The limits of seizure by the Revenue Agency

Where the debt incurred is with the Revenue Service and the account is used for recurring payments such as salary, there are other limits to consider:

  • if the amount is less than 2,500 euros, 1/10 of the salary can be reserved.
  • if the amount is less than 5,000 euros, 1/7 of the salary can be confiscated.
  • if the amount exceeds 5,000 euros, 1/5 of the salary can be reserved.

The limits for pensions and joint accounts

There are also limits regarding specific circumstances, such as the presence of pension payments or a joint account. How do we act in these cases?

  • If recurring payments are made to the current account linked to pensionexcept for the subsistence minimum, one-fifth of the monthly allowance cannot be confiscated.
  • If the current account is held jointly, the seizure will concern only 50% of the total amount filed.

When it is not possible to proceed with the seizure of the current account

Finally, there are three cases that do not allow seizure of current transactions. These depend on the nature of recurring payments made to the same account. In particular, the process is suspended if the account contains only funds from:

  • LARGE’escort for people with special needs;
  • The disability pensions;
  • The life insurance income.

What happens if the debtor’s account is empty?

When considering the possibility of requesting the intervention of a judicial officer to collect an unpaid debt, it is necessary to take due account of a frequent case: a. empty current account by the debtor, or in the red. How do we act in these cases? As a rule, the room for action is limited to two main options:

  • give up credittaking place in Court by specific declaration;
  • wait for more money to arrive in your accountapparently always taking into account an amount exceeding three times the minimum subsistence required by law.

For this reason, the advice is to rely on a good lawyer, as well as evaluate the possibility of following other paths – if the law allows – to recover your credit.

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