The location of the debtor's assets is a decisive step in debt recovery. Many debts are not left uncollected due to a lack of legal grounds, but because the creditor does not know what assets exist, where they are, whether they actually belong to the debtor, or if they have sufficient value to justify enforcement action.
In Portugal, the location of a debtor's assets must be carried out by legal, proportionate, and documented means. The creditor may gather legitimate information, analyse documents, consult public records where applicable, and, in the enforcement phase, benefit from the actions taken by the enforcement agent. What they cannot do is resort to abusive, invasive, or illegal practices to discover assets.
In this article, we explain what is legal in locating a debtor's assets, how it is done in practice, what types of assets can be identified, and when asset tracing can increase the probability of recovery.
To locate the debtor's assets.
Locating a debtor's assets means identifying property, income or rights that can be used to cover a debt. In practice, this may involve identifying bank accounts, salaries, vehicles, properties, claims against third parties, company shares, equipment, professional income or other attachable assets.
This research is especially important when the creditor intends to proceed with legal action. In enforcement proceedings, it is not enough to be in the right. It is necessary to find assets or income that can be seized to satisfy the debt.
The location of assets can also be useful before enforcement action, to assess whether it's worth proceeding, to negotiate better, or to choose another path. If the debtor has no known assets, does not work, has no accounts with a balance, and is accumulating other debts, recovery may be more difficult, even if the credit exists and is well-documented.
When does this problem usually arise?
Difficulties in locating assets often arise when the debtor stops responding, changes address, ceases trading, transfers assets, stops paying voluntarily, or repeatedly attempts to postpone debt settlement.
It is also common in commercial default situations, where a creditor company has outstanding invoices but does not know if the client has assets, accounts, vehicles, or receivables. The same can happen in debts between individuals, late rent payments, unreturned loans, breached payment agreements, or debts recognised by a court order.
Among the most frequent cases are:
- outstanding invoices with no response from the debtor;
- Customers who cease trading or move premises;
- Debtors who claim to have no financial capacity but maintain outward signs of wealth;
- businesses with vehicles, equipment, or receivables from customers;
- individuals with unknown salaries, bank accounts or properties to the creditor;
- Debtors who made payment agreements and defaulted again.
When the debt is already documented, the location of assets can guide the executive action. When it is not yet documented, it can help to determine if it makes sense to first obtain an executive title, for example, through injunctions and executive actions.
What's beneficial about tracing a debtor's assets?
Asset tracing must comply with the law, data protection, privacy, and procedural limits. The creditor may use information to which they have legitimate access, contractual documents, data provided by the debtor themselves, public records, commercial elements, and appropriate judicial diligence.
It is legal, for example, to analyse contracts, invoices, known addresses, previous communications, tax identification data, registration certificates, public business information and other lawfully obtained documents. It is also legal to request, during the enforcement process, that asset tracing investigations be carried out by the enforcement agent.
On the contrary, it is not acceptable to obtain information through unauthorised access to bank accounts, passwords, private tax data, personal communications, abusive surveillance, pressure on relatives, public exposure of the debtor or methods that violate privacy. Debt collection must be firm, but legal and proportionate.
The role of the enforcement agent in locating assets
In enforcement actions, the enforcement agent plays a central role in locating attachable assets. The law allows them to carry out useful investigations to identify and locate the assets of the defendant, including inquiries of legally accessible databases.
These inquiries may encompass, within the legal framework, information from the tax administration, social security, land registries, commercial registries, vehicle registration offices, and other similar registries or archives. The aim is to identify assets or income that can be effectively and proportionally attached.
This access is neither free nor unlimited. It is framed by the enforcement proceedings, by the applicable legal rules, and by the specific powers of the enforcement agent. Therefore, the creditor should not confuse their financial curiosity with the right to obtain any private information about the debtor.
In practice, how is asset tracing carried out?
In practice, the location of assets should be organised in phases. The aim is to avoid scattered inquiries and to concentrate efforts on assets that are more likely to generate a real recovery.
1. Collection of already available information
The first step is to gather everything the creditor already knows about the debtor. Often, there is useful information in commercial documents, contracts, emails, proposals, orders, receipts, invoices, and previous communications.
The address, tax identification number, company name, registered office, contact details, professional activity, employer, vehicles used in a commercial context, properties identified in contracts, or bank details used in previous payments may be relevant.
This phase is simple but important. The better the initial information, the easier it will be to guide the collection strategy.
2. Verification of records and public information
Information on assets or businesses can be consulted through public or legally accessible means. For example, there may be commercial certificates, land registries, vehicle registries, or other elements that help to ascertain if there are assets in the debtor's name.
In the case of companies, analysing the commercial situation can indicate whether the company is active, if it has a known registered office, who the directors are, if there have been relevant changes, or if there are signs of closure. With individuals, research must be more cautious, always respecting privacy and the lawfulness of the means used.
3. Feasibility assessment before execution
Before proceeding to court, the creditor must ask if there is a reasonable expectation of recovery. A debt may be well-proven, but difficult to collect if the debtor has no income, assets or known activity.
This analysis is not for automatically giving up. It is for choosing the best path. It may make sense to try to reach an agreement, request debt recognition, proceed with an injunction, initiate enforcement proceedings, or, in certain cases, prepare a proof of claim if insolvency exists.
4. Actions in the enforcement proceedings
When there is an enforcement title and enforcement proceedings are initiated, the enforcement agent can carry out the legally provided searches. This phase can allow for the identification of bank accounts, income, real estate, vehicles, shares, credits, or other assets.
Once assets have been located, the most suitable seizure must be chosen. The law favours assets that are easier to realise and are appropriate to the value of the debt. Therefore, it does not always make sense to seize vehicles or equipment first if there is a bank balance or income that is easier to seize.
What assets can be located and seized?
The assets to be located depend on the debtor's profile. A self-employed individual has a different reality to a commercial company, a sole trader or an already insolvent debtor.
Among the assets and rights that may be relevant are:
- bank accounts and deposits;
- salaries, pensions or other periodic income, respecting legal limits;
- motor vehicles, motorcycles and commercial vehicles;
- real estate, urban buildings, rural buildings or autonomous fractions;
- receivables owed to the debtor by customers or third parties;
- quotas, shares or economic rights;
- equipment, machinery, goods and other movable assets;
- tax refunds or other amounts due, when legally attachable.
Identifying assets doesn't mean they should all be seized. Their usefulness depends on their value, ease of sale, existing encumbrances, costs of seizure, and the priority of other creditors.
Locate the debtor's bank accounts
Bank accounts are frequently one of the first targets in enforcement proceedings, as they can allow for a quicker recovery when there is an available balance. In the enforcement phase, the identification and seizure of bank deposits are subject to specific rules and involve electronic communications to banking institutions.
However, the existence of an account does not mean that there is a garnishable balance. There may not be sufficient funds, there may be legally protected amounts, or difficulties may arise if the account has multiple holders.
To delve deeper into this subject, you can consult information on bank account seizure, including limits, deadlines, and forms of recourse.
Find salaries and incomes
When the debtor is employed by a third party, a wage garnishment can be a stable method, although not always quick. The employer can be notified to withhold the garnishment portion of the salary, respecting legal limits.
The search for assets should be carried out through the appropriate procedural means. The creditor may indicate known information, but formal confirmation depends on the specific diligences of the enforcement proceedings.
Recovery through salary should be analysed realistically. If the attachable portion of salary is low and the debt is high, repayment may take a very long time. It may be useful to better understand the limits of wage garnishment.
Locate vehicles and other movable assets
Vehicles can be identified through the relevant registers and can be seized when they belong to the debtor. Nevertheless, feasibility depends on the actual value of the vehicle, its condition, the existence of financing, retention of title, previous seizures or other encumbrances.
Other movable assets, such as machinery, equipment, stock or valuables, can be particularly useful in business debts. However, they also require careful valuation, because seizure, transport, storage and sale can incur costs.
Before insisting on this route, it is advisable to ascertain if there is any net recoverable value. You can delve deeper into this analysis at seizure of vehicles and other assets.
Locate the debtor's properties
Real estate can be a significant source of recovery, particularly when the debt amount is high. However, the seizure of real estate is generally more time-consuming and complex than the seizure of bank balances or income.
Before proceeding, it is necessary to verify whether the property belongs to the debtor, whether there are any previous mortgages, liens, usufructs, co-ownership, permanent primary residence or other encumbrances. Often, the property has an apparent value, but the amount available to ordinary creditors may be reduced after taking into account secured debts and expenses.
The seizure of real estate must be proportionate. For low-value debts, it can be excessive if there are other sufficient assets. For high debts, it can be a necessary route, provided it is legally supported.
Locating the debtor's credits with third parties
A debtor may not have ready cash available but may have amounts owed to them by third parties. This is particularly relevant in a business context. A debtor company might have clients who haven't yet paid, ongoing contracts, pending reimbursements, or trade credits.
The seizure of debts can be useful, but it requires sufficient identification of the debt and the third-party debtor. It should not be based solely on vague suspicions. The more concrete the information, the more likely the diligence will be effective.
For commercial creditors, this type of analysis can be very important, especially when the debtor continues to be active and maintains relationships with customers. The strategy must be adapted to the company's reality and the value in question.
What the creditor must not do
The desire to recover a debt does not authorise the creditor to exceed legal limits. There are practices that can harm the process, generate civil liability, or even create criminal problems, depending on the severity.
The creditor should avoid:
- accessing private accounts, emails, mobile phones or documents without authorisation;
- to pressure the debtor's family, colleagues or clients in an abusive manner;
- to publicly disclose the debt to embarrass the debtor;
- use threats, intimidating language, or excessive contact;
- to contract investigative means that violate privacy;
- seizing a debtor's assets without legal decision or procedure;
- to confuse suspicions with documentary evidence.
The collection should be firm, but responsible. Illegal action can weaken the creditor's position and distract from the essential: recovering the credit through legitimate means.
Does the location of assets guarantee debt recovery?
No. Locating assets improves the available information and can increase the likelihood of recovery, but it doesn't guarantee payment. A located asset might be unseizable, have little value, be encumbered, belong to a third party, or be difficult to sell.
Similarly, locating an employer does not mean there is sufficient monthly margin to pay quickly. Identifying property does not mean the lender will be repaid before other secured creditors. Finding vehicles does not mean the sale will cover the costs.
The location of assets is an essential step, but it must be accompanied by feasibility analysis. The creditor needs to know not only what exists, but how much they can realistically recover and within what probable timeframe.
The documents that assist in asset research include:
Before requesting investigations or proceeding to enforcement, the creditor must organise the available documents. Good preparation makes asset tracing more efficient and reduces delays.
May be relevant:
- contracts, invoices, receipts, and debit notes;
- judgments, injunctions or other enforceable titles;
- payment agreements or acknowledgements of debt;
- emails, letters and messages exchanged with the debtor;
- addresses, registered offices, contacts and tax identification numbers;
- information about the employer, clients or professional activity;
- References to vehicles, real estate, equipment, or accounts used in payments;
- Certificates or public documents obtained by legal means.
These elements do not replace the formal steps of the executive process, but they help to guide the strategy and justify specific requests.
Location of assets before or after the enforcement action?
Ideally, the assessment should commence before executive action. The creditor must ascertain if there are sufficient grounds to justify proceedings and what type of due diligence might be most effective. This preliminary analysis can prevent unnecessary costs or unrealistic expectations.
Once enforcement proceedings have been initiated, the location of assets gains procedural momentum, as the enforcement agent can make use of legally provided inquiries. At this stage, the information obtained can lead to the seizure of accounts, salaries, vehicles, properties, credits, or other assets.
When there is still room for an amicable solution, an approach of out-of-court collection can allow payment or settlement without court. When the debtor does not cooperate, the enforcement route may become necessary.
What if the debtor has no assets?
If no attachable assets are found, recovery may be compromised. This does not necessarily mean the debt disappears, but it can make collection more difficult or postpone the satisfaction of the claim.
In some cases, it may be possible to maintain attention on the debtor's asset evolution, assess new investigations, negotiate staggered payments, or consider insolvency, depending on the available elements. In a business context, the absence of assets may indicate a risk of closure, asset dissipation, or insolvency.
If there is an insolvency process, the creditor must assess the need to submit claim of credits in insolvency proceedings. In this situation, individual collection may be limited and the credit must be dealt with within its own proceedings.
Quando é que deve consultar um advogado?
The creditor should consult a lawyer when they are unsure if they have an enforceable title, when the debt is old, when they are unaware of the debtor's assets, when they suspect asset dissipation, when there are related companies, when there are multiple debtors, or when they intend to assess if enforcement action is worthwhile.
It is also advisable to obtain legal advice before undertaking sensitive research or making contact with third parties. The line between legitimate due diligence and undue intrusion can be fine, particularly when personal data, bank details, income or commercial relationships are involved.
A solicitor can analyse documents, confirm deadlines, assess evidence, prepare notices, choose the appropriate court and coordinate actions with the enforcement agent. In matters of Credit recovery and debt collection, information should be used strategically and within the law.
How can debt recovery lawyers help
Debt recovery lawyers can help transform scattered information into a collection strategy. The work begins with analysing the debt, available title, documentation, deadlines, and the probability of locating assets.
In the extrajudicial phase, they can prepare formal notifications, negotiate settlements, obtain acknowledgements of debt, and assess signs of financial capacity. In the judicial phase, they can initiate or follow injunctions, enforcement actions, seizures, and claims for credit, coordinating actions with the enforcement agent.
The objective is not to seek assets at any cost, but to identify legal and proportionate avenues that increase the possibility of recovery. A good strategy avoids futile due diligence, reduces risks, and helps the creditor make informed decisions.
Conclusion
The location of a debtor's assets is a fundamental step in debt recovery, but it must be carried out with rigour, legality, and practicality. The creditor can gather legitimate information, consult public records, and, in enforcement proceedings, benefit from the actions of the enforcement agent. However, they cannot resort to abusive or invasive methods.
In practice, locating assets is not enough. It is necessary to assess whether these assets are attachable, whether they have value, whether they are free from encumbrances, whether they are easy to sell, and whether the foreseeable recovery justifies the cost and time of the process.
Acting early, organising documents and seeking legal guidance can make the difference between a directionless recovery and an effective strategy. Each case must be analysed individually, taking into account the debt, the debtor, existing assets and the legal means available.
