Your debtor put his assets in someone else's name: the pauliana claim

The case, in five lines

What is brought

Rescission claim for fraud on creditors, known as the pauliana, to undo the gift or sale by which the debtor moved the asset out of his estate.

Before which court

The Civil section of the Tribunal de Instancia (the first-instance court). The claim is brought against both the debtor and whoever received the asset, because what is rescinded is the contract between them.

Deadline

Article 1299 of the Civil Code provides that the action to seek rescission lasts four years. The article itself sets an express starting day only for minors under guardianship, persons with representative support measures and absentees.

Who can bring it

The creditor harmed by the act, under article 1111 of the Civil Code. A prior judgment is not required, although having one makes it easier to prove the debt and its date.

Financial risk

Article 1291.3 requires that the creditors cannot otherwise recover what is owed them, so that impossibility must be proved. If the claim is dismissed, the creditor bears the costs of a case with two defendants.

Article 1111 gives you two weapons, not one

Article 1111 of the Civil Code says that creditors, after pursuing the assets in the debtor's possession in order to obtain what is owed them, may exercise all his rights and actions to the same end, except those inherent to his person, and it adds that they may also challenge acts carried out by the debtor in fraud of their right.

Two distinct remedies live in a single sentence. The first allows the creditor to exercise, in the debtor's place, rights the debtor does not claim, such as collecting an invoice a third party owes him and which he lets lie so that nobody seizes it. The second, the one that matters here, allows a direct attack on the act by which he moved an asset out of his estate. They may be brought separately or in the same claim.

Rescission is the last resort, and article 1291.3 says so

Article 1291 lists which contracts are rescindable, and its number 3 refers to those entered into in fraud on creditors, where the creditors cannot otherwise recover what is owed them. That final clause is not rhetoric: it turns the impossibility of collecting by another route into a requirement of the claim, one the creditor must prove and the one the defendant will attack before any other.

In practice, that means the earlier enforcement against the debtor is not bureaucratic detour, it is the main evidence. A nil return on seizure, a negative asset search and proof that no other assets are known are the documents that support that requirement. Without that groundwork, the rescission claim arrives bare at precisely the point where the law demands most.

Four years, and article 1299 does not say from when in the ordinary case

Article 1299 of the Civil Code is deceptively brief: the action to seek rescission lasts four years. Its second paragraph sets an express starting day only for minors under guardianship, for persons with disabilities provided with support measures carrying powers of representation, and for absentees, in which case the four years do not begin to run until the guardianship or measure ends, or the situation of legal absence ceases.

For the ordinary creditor the article names no such starting day, and half the defendant's case is played there, since he will try to place it as far back as possible, usually at the date of the deed. So it pays to act without waiting: the sooner the claim is brought once the asset's departure is known, the less room there is to argue over the count and the less time the recipient has to pass it on to a third party.

If the sale happened with the case already running, look at another number

Article 1291 does not stop at its number 3. Its number 4 makes rescindable contracts concerning things in litigation, where they were entered into by the defendant without the knowledge and approval of the litigating parties or of the competent judicial authority. It is a distinct situation, with its own requirements, and it fits a very common scenario: the asset is transferred while the case is already alive.

That is why the date of the challenged contract is always compared with three dates in the file: when the debt arose, when the first formal demand was made and when the claim was filed. An asset leaving the debtor's estate two weeks after he received a recorded demand tells a very different story from one sold three years before anyone claimed anything, and the claim must show that chronology on its first page.

What decides the case is the chronology and the price, not the words

These cases are won with verifiable facts. That the recipient is a child, spouse or brother in law. That the price in the deed is far below market value. That there is no bank trace of payment, or that the money returns to the seller within days. That the debtor goes on using the asset as before. That the operation is concentrated in the weeks following the first demand. No single one of these is enough; together they draw the whole picture.

In parallel the criminal route may be considered, for the removal of assets from creditors covered by article 257 of the Criminal Code, whose requirements are studied against the text in force and the specific facts before any step is taken. They are separate routes that can coexist, and the decision to open the second is taken with the evidence already gathered, not as a reaction or as a threat in a negotiation.

How we run the case, step by step

1. 1

   Exhaust and document the enforcement against the debtor

   Article 1291.3 requires that the creditor cannot recover by another route. We gather the nil returns on seizure and the negative answers from the asset search, which are the evidence of that requirement.

2. 2

   Build the registry history of the assets

   We obtain the full registry record of each property and vehicle, with every transfer and its date, and locate the deed or contract by which the asset left the debtor's estate.

3. 3

   Cross the debt timeline with the emptying timeline

   The birth of the debt, each formal demand, the claim and the date of each transfer are placed on the same timeline. That comparison decides which number of article 1291 is invoked, and how strongly.

4. 4

   Sue the debtor and the recipient in the same case

   What is rescinded is the contract, so both parties must be in the case. We also request a precautionary entry of the claim so the asset does not keep circulating while the matter is decided.

5. 5

   Once the asset is recovered, return to enforcement

   Rescission does not collect by itself: it brings the asset back within the creditor's reach. With the judgment final, enforcement resumes and seizure is levied on what has been recovered so it can be realised.

The law that applies

• Art. 1111 CC. It recognises the creditors' power, after pursuing the assets in the debtor's possession to obtain what is owed them, to exercise all his rights and actions to the same end, except those inherent to his person, and to challenge the acts carried out by the debtor in fraud of their right. BOE-A-1889-4763
• Art. 1291 CC. It lists the rescindable contracts. Its number 3 covers those entered into in fraud on creditors where the creditors cannot otherwise recover what is owed them, and its number 4 those concerning things in litigation entered into by the defendant without the knowledge and approval of the litigating parties or of the competent judicial authority. BOE-A-1889-4763
• Art. 1299 CC. It sets four years as the duration of the action to seek rescission. It provides an express starting day only for minors under guardianship, persons with disabilities provided with representative support measures and absentees, for whom the period does not begin until the guardianship or measure ends, or the legal absence ceases. BOE-A-1889-4763

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

Frequently asked questions