What happens if I have debts with Social Security as a self-employed worker?

As a self-employed worker, you are required to pay contributions and other funding resources of the Social Security System within a voluntary payment period. If you do not pay your debts with Social Security on time and in the proper manner, the enforcement stage (vía ejecutiva) will automatically begin, which entails surcharges and interest.

Be very careful not to ignore payment demands, because if an enforcement order (providencia de apremio) is issued, your assets may end up being seized.

Surcharges and late-payment interest

When you incur a debt with Social Security, you will automatically have to pay a surcharge of 10% of your debt, starting from the day after the end of the voluntary payment period.

And do not assume that the debt will be much smaller because you benefit from the flat rate (tarifa plana) and only pay €60 a month. Another consequence of incurring a debt with Social Security is that contribution reductions (bonificaciones) are suspended until you are up to date. You will therefore also have to pay the €314.74.

The surcharges do not end there. You must also add the late-payment interest, which corresponds to the statutory interest rate, that is, 3.75% of the debt.

Start of the enforcement stage

If you still do not pay the debt, the enforcement stage begins. You will be issued a debt claim (reclamación de deuda) or assessment report (acta de liquidación), which covers an accumulation of outstanding contributions, and you will be given a new voluntary payment period.

If you pay the demand before this new deadline set by the authorities expires, you will pay an additional 20% of the debt. If you pay after that deadline, the surcharge will rise to 35%.

Remember that you must also add the late-payment interest of 3.75% of the debt.

When is the enforcement stage suspended?

Once this procedure has been set in motion and initiated ex officio, it can only be suspended:

– Where there is a decision granting a deferral of the debt.

– If an appeal is filed and, at the same time, payment of the debt is secured by a sufficient guarantee or its amount is deposited.

What is the enforcement order?

If the time allowed during the enforcement stage also passes, you will move on to the enforcement order. This is a third stage, in which matters become even more complicated.

The enforcement order will expressly refer to the outstanding debt. It will appear in the corresponding enforceable instrument and will warn you that, if you do not pay the debt within fifteen days, your assets will be seized in an amount sufficient to cover payment of the debt, including the principal, the surcharge, any late-payment interest accrued, and the costs of the proceedings.

And what are these procedural costs?

They are all the expenses incurred during the enforced collection process. These include:

– Expenses arising from the investigation and identification of the assets that make up your estate.

– Expert fees and other fees payable to persons involved in the procedure, such as those accrued in connection with the valuation and sale of the seized assets.

– Fees and scheduled charges payable for the issuance of copies, certificates, registry extracts, attested copies, and similar documents that must be requested for the proper handling of the procedure, unless they are provided by registries and records that supply them free of charge.

– Expenses arising from the deposit and, where applicable, the management of the seized assets, including dismantling, packing, preparation, transport, storage, custody, maintenance, and conservation.

– Any other expenses essential for the enforcement, subject to prior authorization from the competent Provincial Office of the General Social Security Treasury (Dirección Provincial de la Tesorería General de la Seguridad Social).

Seizure of assets

The Social Security Enforced Collection Unit (Unidad de Recaudación Ejecutiva) is responsible for seizing assets and carrying out the other acts of the enforcement procedure that it must conduct.

In fact, the Enforced Collection Unit itself will search for information on your assets in public registries, entities, or any other sources from which such information can be obtained through inquiries, using the means it deems appropriate.

This does not prevent you from making whatever declaration you consider appropriate regarding your own assets and rights.

Social Security enforced collection officers (Recaudadores Ejecutivos) and their assistants are empowered to carry out the physical actions necessary to take possession of the assets subject to seizure, even in cases of refusal, obstruction, inaction, or repeated absence of the debtor or of the custodian of the assets.

Assets of a self-employed worker that can be seized

From that point on, the seizure will proceed.

Under the Civil Procedure Law (Ley de Enjuiciamiento Civil), the following assets of a self-employed worker can be seized:

– Cash or bank accounts. These are seized first.

– Receivables, instruments, short-term rights, securities, or financial instruments admitted to trading on an official secondary securities market.

– Cash income, interest, and yields of any kind.

– Movable property and shares in companies (participaciones sociales).

– Real estate.

– Salaries, pensions, and income from professional and business activities, provided they are not below the national minimum wage (SMI).

Your assets will be valued by reference to market prices and in accordance with customary valuation criteria.

The amount determined will serve as the reference for the public auction. In this way, once the assets have been sold and your debts, together with their respective surcharges, interest, and costs, have been paid off, the enforcement order will come to an end, and with it, your debts with Social Security.