What asset protection planning is provided for under the Constitution of your jurisdiction?

Taken from International Asset Protection Planning: The debtor’s dilemma – planning for and protecting against future judgments
Virtual Round Table Series, December 2016: Private Client Working Group

Portugal is halfway between the UK and Florida in its position on asset protection. Both the Portuguese Constitution and the European Convention of Human Rights prohibit imprisonment by reason of a debt, provided no criminal activity such as fraud is committed. Should the debtor be momentarily incapable of meeting their obligations, they can apply for a PER (the equivalent of the US ‘Chapter 11’) in which case a reduction or rescheduling of debt may be granted. This allows a debtor to retain all their assets until the debt is paid off.

The important point for me, though, is not what’s in the constitution or statute books, but what happens in the field. The question should be, how easy is it for a creditor to get hold of the assets of a debtor? The agents of a Portuguese court can ask the banks directly if a debtor has accounts and they can seize any money directly, they can also seize tax rebates. They can access records to see how much property is in the debtor’s name and seize that.

They cannot touch the tools of the trade, as in the UK, but there could always be an agent working for the creditor who can overstep these barriers and actually seize assets that will cause a debtor permanent damage. The law regarding tax debt in Portugal was changed recently. Previously the government had the power to seize a debtor’s home, regardless of whether it was under homestead protection. Most houses were mortgaged to banks, so the government forced them to acquire the property at a discounted price. The Inland Revenue Service (IRS) got nothing, but it punished debtors who were owing taxes.

Now, if the property is a primary home, it can still be seized by the tax authorities, but not sold on. There is an eight-year statute of limitations regarding tax debts, so if they are not recovered within that time scale the debt goes away.