Monday, 5 August 2013

Mortgage debt: How could be affecting my salary?






Do you know what could be happening in case you have a mortgage debt that you can not assume? Well, if your debt is not canceled with the delivery of your property, the bank will seize your salary, but with the limitation of 150% of the minimum legal wage, assuming “unattachable” the amount of 961 Euros.


However, if your debt is not set up with the bank but with the Tax Authorities or Social Security Department (Treasure), the issue is different because the amount they can not garnish is 641.40 Euros, corresponding to the minimum wage, so the most of your salary can be removed.

The limit of the salary that can not be garnished increases to 30% for each dependent member with no income that is in the same family, although this is not useful for the public debt.

It is also noteworthy that the law gives the Treasury the possibility of up to 20,000 Euros to garnish automatically but of course, the law requires the administration to follow an order in foreclosures: bank accounts, personal property (cars, for example) , securities, cash, wages and finally buildings.

To find out which part of the pay roll can be affected, follow the rule explained in the respective regulations:

1st. The legislation states that the minimum wage can not be demanded. Already indicated which corresponds to an amount of 641.40 Euros.

2nd. With that clear, the government may seize 30% of pay roll up to twice the minimum wage, which is 1282.00 Euros.

3rd. That 30% can be increased to 50% for the portion of salary that is equivalent to three times the minimum wage and so proportionally until reaching 90% for taxpayers earning more than 3,840.00 Euros.

A person who earns three times the minimum wage, ie 1924.20 euros, fi
nance may withhold more than 500 Euros, as follows:

1. The first 641.4 Euros are unalienable.
2. Hacienda can get 30% of the following 641.40 Euros salary, which would be 192.42 Euros.
3. 50% on the remaining amount to 1942.2 Euros payroll, that would be 320.7 Euros

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Finally, that mortgage debt follows the same rule, but the minimum as explained at the beginning, stood at 961 Euros.

Contact VP ADVISERS for further details.

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