Professional defaulters and criminal law

Not infrequently, when a client contacts his lawyer to claim a debt that he owes to a third party, he does not consider that, although he is absolutely right in his claim and is almost 100% sure that he will obtain a favourable judgement, the enforcement of the judgement and, therefore, the effective collection of the debt, may be frustrated due to the real or apparent insolvency of the person ordered to pay. On other occasions, precisely because the client considers such a possibility, the claim is not even made, and the alleged insolvent party gets away with it.

While it is true that on some occasions this insolvency is real, so that the debtor would be caught, on other occasions it is nothing more than a carefully studied artifice designed to avoid paying his debts.

There are a variety of ways to hide assets. Without wishing to be exhaustive and depending on the specific case, these could range from the simple fact of owning unregistered or unregistered property, to operating through limited companies whose only real purpose is to conceal the debtor’s assets, to situations such as collecting a salary or rent in hand and hiding it “under the mattress”. However, it should be borne in mind that such attitudes will normally constitute a criminal offence.

In these situations of simulated insolvency, criminal law can often be used to give a little push to the debtor to encourage him to bring out his hidden assets and pay his debts, under the threat of being sentenced to between 3 months and 4 years in prison, depending on the case.

One way to get the debtor to retract and pave the way for subsequent criminal actions is provided by the Civil Procedure Act, which provides for the Court to request the debtor, ex officio, when the execution of the judgement is ordered, to show what assets he has to meet the judgement and its charges. The mere fact of not complying with such a request, or of complying with it in a false or inaccurate manner, will already constitute an offence of frustration of execution. The same applies in general to any action that diminishes the assets and that is not aimed at the payment of the debt claimed or other debts of the debtor.

It should be borne in mind that the certain possibility of being sentenced to a prison sentence usually encourages those who have hidden assets to bring them to light in order to avoid this possibility, so before writing off the money for a debt on the understanding that nothing can be taken from the debtor, we recommend that you explore all the avenues of action that the law makes available to the citizen, always bearing in mind that rights that are not exercised end up expiring.