The short answer: a Spanish bank can sell your debt to a fund without asking you, but the fund cannot charge you more than you owed the bank, and you keep every defence you had. Before paying, ask in writing for proof of the assignment and a breakdown of the amount, and check whether the debt is time-barred. If the debt is genuine, a fund that bought it at a discount will often prefer a deal to a long court case, and that is the way out where both sides win.
In this article
Why your debt no longer belongs to the bank
Banks sell their unpaid loans in bulk, as portfolios of NPLs (non-performing loans), to specialist funds, usually for well below face value. More in what an NPL is.
It is legal. The Spanish Civil Code governs the assignment of debts in articles 1526 to 1536 and does not require your consent. For commercial debts, article 347 of the Commercial Code adds that telling the debtor is enough. The assignment carries the guarantees with it, such as a personal guarantee or a mortgage (article 1528 of the Civil Code).
What does protect you:
- If you paid the bank before you knew it had sold the debt, that payment counts and you are released (article 1527 of the Civil Code).
- Once you are notified of the assignment, pay the new creditor or whoever is authorised to collect for it, which is sometimes still the bank (article 347 of the Commercial Code and 1162 of the Civil Code).
First step: ask for proof before you pay
Reply using a method that leaves a record (a burofax or registered post). Without admitting anything yet, ask for:
- Who now owns the debt and under which contract, with the extract of the assignment listing your loan.
- The original contract and the statement of the debt.
- A breakdown of the amount: principal, ordinary interest, default interest, fees and costs, with dates.
- If there is a mortgage, whether the assignment is registered at the Land Registry. Against third parties, the assignment of a debt over a property takes effect from registration (article 1526).
If the bank had already sued you, the fund has to prove to the court with authenticated documents that it has taken the bank's place (article 540 of the Civil Procedure Act for enforcement).
Something new: Royal Decree-law 29/2026, in force since 8 October 2026, added article 25 bis to Law 5/2019 on real estate credit. For mortgage loans assigned from that date, you keep against the fund the same defences you had against the bank, including set-off, and the bank's codes of good practice still apply. If the loan was overdue and secured on your main home, and within six months of being told of the assignment you prove you meet the conditions of Royal Decree-law 6/2012, the selling bank may have to buy the loan back and offer you those measures, subject to the article's exceptions. The bank also can no longer assign loans of debtors already covered by them. It still awaits ratification by Parliament, so it may change.
Is the debt time-barred?
The main time limits:
| Type of debt | Time limit | Rule |
|---|---|---|
| Personal loan, card or overdraft arising on or after 7 October 2015 | 5 years from when it could be claimed | Art. 1964.2 Civil Code |
| Personal debt arising before 7 October 2015 | Transitional rules | Art. 1939 Civil Code and Law 42/2015 |
| Mortgage action (against the mortgaged home) | 20 years | Art. 1964.1 Civil Code and art. 128 Mortgage Law |
Debts from before October 2015 had a fifteen-year limit. Under the transitional rules, many became time-barred five years after that date, unless the clock was stopped. Also, limitation periods were suspended during the 2020 state of alarm (additional provision four of Royal Decree 463/2020). The exact count depends on each case.
The clock stops and starts again with a court claim, with an out-of-court demand from the creditor and with any act in which you acknowledge the debt (article 1973).
Buying out a disputed debt
Article 1535 of the Civil Code lets a debtor extinguish a disputed debt that has been sold by paying the buyer what it paid, plus legal costs and interest on that price. The limits are strict:
- The debt only counts as disputed if there is a lawsuit, a defence has been filed and the case questions whether the debt exists or is payable.
- You have nine days from when the buyer demands payment.
- There are exceptions, such as an assignment to a co-heir or to a creditor in payment of its own debt (article 1536).
- Where debts are sold in bulk portfolios with no individual price for each one, the courts have limited its use.
Details in the right to buy out a disputed debt in NPL deals.
Your options, from least to most conflict
1. Check and reply
If the assignment is missing, the breakdown does not add up or the debt is time-barred, say so in writing with reasons.
2. Negotiate a discount or a payment plan
The fund bought at a discount, so collecting part today can suit it better than waiting years for a court case. You settle the debt for less, with instalments you can afford. Always get the agreement in writing, with the final amount, a waiver of the rest and a commitment to remove you from any bad-debt registers it reported you to. If it is a mortgage, read a fund bought my mortgage: what can I negotiate.
3. Handing back the property
If there is a mortgaged home and you cannot pay, handing it over in exchange for cancelling the debt (dación en pago) is an option to negotiate. When it makes sense: deed in lieu: when it is worth it.
4. Defending the court claim
If the fund files a fast-track payment claim (monitorio), the court gives you twenty days to pay or to file a reasoned objection (article 815 of the Civil Procedure Act). If you do neither, enforcement is ordered against you (article 816). Depending on the amount, the objection needs a lawyer and a court representative (article 818).
Since 3 April 2025, before a monitorio or an ordinary claim, the creditor must generally try an appropriate dispute resolution method (article 5 of Organic Law 1/2025). This is not required to start enforcement, including mortgage enforcement. Direct negotiation between the parties counts. If you answer the fund's letter with a serious offer, your position is on record. If the debt is a mortgage and an auction is already under way, see my home is going to auction: what can I do.
Common mistakes
- Ignoring the letters. A monitorio does not wait: twenty days go by fast.
- Paying before the assignment is proven. You might pay someone who does not own the debt.
- Acknowledging the debt in writing without checking the time limit. An acknowledgement stops the clock (article 1973).
When to get help
When the debt is large, when there is a mortgaged home, when court papers have already arrived, or when you are not sure whether the debt is time-barred. A well-built offer usually settles these cases without going to court.
Frequently asked questions
Can the bank sell my debt to a fund without my permission?
Yes. Assigning a debt does not need the debtor's consent (articles 1526 to 1536 of the Spanish Civil Code and 347 of the Commercial Code). But you keep the same defences you had against the bank.
What does the fund have to prove before I pay?
That it owns the debt (the assignment that includes your loan) and how much you owe, with a breakdown of principal, interest, fees and costs. Ask for it in writing before paying.
How long before a bank debt becomes time-barred?
Personal debts arising on or after 7 October 2015 become time-barred 5 years after they could be claimed (article 1964.2 of the Civil Code). The mortgage action, after 20 years. Any demand or acknowledgement stops the clock.
Can I pay the fund what it paid for my debt?
Only through the right to buy out a disputed debt (article 1535 of the Civil Code): there must be a lawsuit with a defence filed that questions whether the debt exists or is payable, and you must use it within nine days of the fund demanding payment. With bulk portfolio sales and no price per debt, the courts have limited it.
Do funds accept a discount?
Often, yes, because they buy at a discount and a deal saves them time and costs. It is not a debtor's right, it is negotiated. Always sign the agreement in writing, with the final amount and a waiver of the rest.