Financial Crime World

Here is the converted article in Markdown format:

Portugal’s Garnishment Rules and Regulations: What You Need to Know

In Portugal, wage garnishment is a judicial measure aimed at ensuring creditors’ rights to payment by seizing a portion of the debtor’s salary. This article will delve into the rules and regulations surrounding wage garnishment in Portugal, providing essential information for individuals facing debt collection.

Wage Garnishment: How it Works

The process begins with a notification sent to the employer, instructing them to deduct the corresponding amount from the employee’s salary. The deducted amount is then deposited into a bank account designated by the enforcement agent until the deadline for contesting the garnishment expires. If no objection is raised, the enforcement agent hands over the amount to the creditor and notifies the paying entity to deliver future payments directly to the creditor.

Wage Garnishment Rules

Wage garnishment follows strict rules to ensure fair treatment of debtors:

  • One-third of the salary is typically garnishable.
  • The worker retains an amount equivalent to the national minimum wage (currently €820).
  • The non-garnishable amount cannot exceed three times the minimum wage (€2,460 in 2024).

Wage Garnishment Exceptions

There are situations where individuals in default cannot be subjected to a wage garnishment process:

  • Earning less than the national minimum wage.
  • Having debts exceeding three times the minimum wage.
  • Being a dependant with income below €1,200 per month.
  • Receiving social security benefits or other forms of financial assistance.

Calculating Wage Garnishment

To determine the wage garnishment amount:

  • Calculate the net income by considering all components of the salary.
  • Multiply this figure by 1/3 to obtain the garnishable amount and by 2/3 to obtain the non-garnishable amount.

Acting in the Event of a Salary Attachment

Debtors facing a salary attachment can take several measures:

  • Reducing the attachment from 1/3 to 1/6 of the salary.
  • Filing an objection to excessive garnishment when more than the allowed limit is being seized.
  • Opposing execution proceedings within 20 days.
  • Initiating insolvency or PEAP procedures for debt restructuring.

Conclusion

Wage garnishment in Portugal is a complex process governed by strict rules and regulations. Understanding these guidelines can help individuals facing debt collection navigate the system effectively, ensuring fair treatment and optimal solutions for their financial situations.