How to cancel a bank or debt collection agency foreclosure.
Foreclosure is a legal procedure in which the creditor (bank or debt collection agency) attempts to recover an outstanding debt through a bailiff. However, there are situations in which the foreclosure can be contested and annulled, either in whole or in part, if the debtor proves that it is illegal or abusive. In this article, we will detail the main ways in which you can annul a foreclosure.
1. Check the legality of the enforcement documents
Before contesting the foreclosure, you must analyze whether the procedure has complied with all legal requirements. Check the following:
Is there a certain, liquid and due claim?
The creditor must demonstrate that the debt is clear, well-determined and due. If there are errors in the calculation of the amount owed, the enforcement can be contested.
Has a decision approving the enforcement been issued?
The bailiff must obtain the enforcement approval from a court. The lack of such approval makes the entire procedure illegal.
Are the issued documents complete and compliant?
All procedural documents (summonses, garnishments, notifications) must be correctly drawn up and communicated to the debtor. Failure to comply with these obligations may result in the cancellation of the enforcement.
2. Contesting the enforcement
If you discover irregularities in the enforcement procedure, you can file a contestation against the enforcement. Here are the main steps:
a) Filing the contestation with the court
Deadline: The contestation must be filed within 15 days of receiving the first enforcement document (e.g. the summons) or from the enforcement document that you are contesting.
Competent court: The contestation is filed with the court of the debtor's domicile.
b) Common reasons for appeal
The claim is not due: For example, the debt has been paid, but the creditor continues the enforcement.
The enforceable title is invalid: Some credit agreements, for example, may include abusive clauses that can be contested.
Prescription of the right to request enforcement: In the case of bank loans, the general prescription period is 3 years.
Exaggerated costs: Taxes, interest and penalties may be calculated incorrectly or unreasonably high.
Illegal attachment: If the attachment exceeds the legal limits (e.g. maximum 1/3 of the salary) or if income that cannot be enforced is affected (e.g. allowances, disability pensions, indemnities granted under special laws).
c) Request for suspension of enforcement
As part of the appeal, you can request the temporary suspension of the enforcement until the case is resolved.
A deposit set by the court is required, but this step can prevent abusive measures until the legality of the enforcement is clarified.
3. Invoking the statute of limitations
One of the most common reasons for annulling the enforcement is the statute of limitations of the right to request and/or continue the enforcement:
The general statute of limitations is 3 years, calculated from the date of the last unpaid due date in the first case and in the second case more than 3 years have passed before the issuance of the last contested enforcement document and the executor has not issued enforcement documents (addresses, inquiries, requests for insistence do not constitute enforcement documents).
If the debt has been assigned to a debt collection company, the term remains the same.
Attention: The statute of limitations must be invoked by contesting, otherwise the court will not consider it ex officio.
4. Challenging unfair terms
In the case of banking contracts, many forced executions are based on clauses considered unfair, such as:
Interests unilaterally increased by the bank.
Excessive penalties for minor delays.
Unjustified fees (e.g. risk fee, disproportionate management fee).
What can you do?
Invoke the unfair terms as part of the enforcement challenge or in a separate process to establish the nullity of the contractual terms.
5. Irregularities in the assignment of the claim
If the forced execution is initiated by a debt collection company, check the following:
Are the recovery companies legally registered?
Check whether the company is registered in the Special Register of the National Authority for Consumer Protection (ANPC).
Has the assignment of the claim been notified?
The debtor must be officially informed of the assignment before the enforcement begins.
If these conditions have not been met, you can request the cancellation of the execution.
6. Amicable settlement with the creditor
Before or even during the forced execution procedure, you can try to negotiate with the bank or debt collection company. Amicable solutions may include:
Rescheduling the debt: Setting lower monthly installments.
Reduction of penalties: Sometimes creditors agree to eliminate penalties if the debtor assumes the payment of part of the debt.
Full payment of an amount
7. The Role of a Lawyer in Canceling a Foreclosure
Hiring a lawyer specializing in foreclosures can make a difference. A lawyer can help you:
Identify and invoke the legal grounds for the challenge.
Prepare the necessary documents for the court.
Negotiate more favorable terms with the creditor or executor.
Conclusion
Cancellation of a foreclosure is possible if it does not comply with the legal provisions or if the debtor can demonstrate irregularities in the procedure followed by the bank or debt collection company. It is essential to act quickly, within the legal deadline, and to consult a lawyer to maximize the chances of success. Through a careful analysis of the documents and the procedure, you can prevent abusive measures and protect your assets.