Assets exempt from seizure in Chile: what the law protects and the exception almost no one knows about

Quick answer: the list is in article 445 of the Code of Civil Procedure and article 57 of the Labour Code. The essentials: wages and social security contributions cannot be seized, and only the part exceeding 56 unidades de fomento can be affected. Also excluded are bedroom, dining room and kitchen furniture used by the family, and necessary clothing. The property the debtor occupies with their family is protected when its assessed value does not exceed 50 monthly tax units, but with a decisive exception: that protection does not apply in proceedings where the Fisco, the Chilean State, is a party.

That last line is what changes the outcome in debts owed to the State, which are precisely the ones that most often end up in seizure. It is worth knowing this beforehand, not once the seizure is already registered.

Wages

Article 57 of the Labour Code is categorical: workers' wages and social security contributions cannot be seized. What exceeds 56 unidades de fomento can be seized, but only for the part above that limit.

There are three cases in which up to 50% of a wage can be seized, and they are worth knowing because they are an exhaustive list of exceptions:

• Court ordered maintenance owed by law and ordered by a court.
• Fraud, theft or robbery committed by the worker against the employer in the course of their duties.
• Wages owed by the worker to people who worked for them.

What this means in practice. An ordinary debt, whether it is a bank debt, a tax debt or a CAE debt, does not allow a deduction from your wages. If that happens, there is a specific way to complain, and you should not accept it.

The family home, and its exception

Article 445 number 8 of the Code of Civil Procedure declares that the property the debtor occupies with their family cannot be seized, provided its assessed value does not exceed 50 monthly tax units, or it is emergency housing covered by the special regulations. The same numbered provision protects bedroom, dining room and kitchen furniture used by the family, and the necessary clothing of the debtor, their spouse and the children who depend on them.

That is why the answer to "can they take my house?" depends on who the creditor is. Against the Fisco, which is the scenario for CAE debts and tax debts, the rule does not protect the property.

What else is exempt from seizure

• Salaries, bonuses and grace, retirement and survivor's pensions paid by the State and the municipalities, except up to 50% for court ordered maintenance.
• Social security contributions.
• The essential family use assets already mentioned.
• Books and tools necessary for the debtor to practise their profession or trade, within the limits the same provision sets.

Bank accounts: the question everyone asks

This is where you have to be precise, because a lot of overly optimistic information circulates. The law does not declare "the current account" or "the sight account" exempt from seizure as categories. What the law protects is the origin of certain funds, not the container they sit in.

The practical consequence is uncomfortable: once the wages have been deposited and mixed with other funds, proving that money is the protected wage becomes a matter of evidence. What helps is being able to show the origin with payslips and bank statements, and raising it within the proceedings.

A practical piece of advice. Keeping the account where you receive your wages separate from your operating account makes it much simpler to prove the origin of the funds if you ever have to argue the point. It is not an additional legal protection, but it is the difference between being able to prove it and not.

How to assert the exemption from seizure

• It does not apply on its own. You have to raise it in the proceedings where the seizure was made, and within their deadlines.
• It has to be proven. With payslips, appraisal certificates, or whatever is appropriate for the asset in question.
• You can ask for the seizure to be lifted over the protected asset, without that meaning you dispute the underlying debt.
• The deadlines are short. That is why good arguments end up being lost.

What to gather before arguing the exemption from seizure

Exemption from seizure has to be proven, not assumed. Before appearing before the court, it is worth having these documents gathered, because without them the argument goes nowhere:

• The latest payslips. They prove the amount of the wage and allow you to calculate whether there is any excess over the 56 unidades de fomento.
• The property's current assessed value certificate, if what was seized is the family home. It is the document that proves whether it is within the 50 monthly tax unit cap or not. That same assessed value is used to calculate contribuciones, so if it looks high to you, it is worth checking whether it has been properly set.
• The bank statements for the affected account, if what was seized is deposited money and you have to show it comes from a protected wage or pension.
• The employment contract or a certificate from the paying institution, depending on whether the wage comes from a private employer or a State pension.
• The order or the seizure record, which shows exactly what was seized and under which case file. The deadlines to raise an argument run from that date.

The court does not take it as given that a particular deposit is the month's wage: that has to be proven with documents, not a verbal explanation.

The order in which to act

Once a seizure has already been made, the order in which things are done matters as much as doing them:

• Check what assets were actually seized. It does not always match what you assume, and sometimes the seizure lands on assets it should not have.
• Work out the deadline you have to raise your argument, counted from notice of the seizure, not from when you found out about it.
• Gather the supporting documents before appearing, following the list above.
• Raise the exemption from seizure or ask for the seizure to be lifted over the protected asset, without needing to dispute the whole debt.
• At the same time, check whether the underlying debt allows for another defence. With CAE debts, for example, the best tool is often not the exemption from seizure but challenging the procedure being used to collect it.

Common mistakes when reacting to a seizure

• Assuming the protection applies on its own. As explained, you have to raise it within the proceedings and within the deadline. No one applies it automatically if the debtor does not assert it.
• Letting the deadline pass because you did not know it was running, or because you waited to see what would happen. It is the costliest mistake, because a good argument gets lost for being out of time.
• Not distinguishing who the creditor is. The protection for the family home changes completely if the creditor is the Fisco, as happens with CAE debts. Arguing as if it were an ordinary creditor, when it is actually the Fisco collecting, leads to a predictable rejection.
• Mixing the funds without keeping a record that lets you separate the origin later. The more your wages and other income get mixed together, the harder it is to prove.
• Signing something before reviewing it. An agreement or an acknowledgement of debt can close off arguments that were still available, including the exemption from seizure of a specific asset.

Frequently asked questions

Can my wages be seized for a bank debt?

Wages cannot be seized, and only the part exceeding 56 unidades de fomento can be affected. The three exceptions that allow up to 50% are court ordered maintenance, fraud against the employer, and wages owed to your own employees. An ordinary bank debt is not on that list.

What about an old age pension?

Retirement and survivor's pensions paid by the State are on the list of assets exempt from seizure, with the 50% exception for court ordered maintenance.

My house has a high assessed value. Am I unprotected?

The exemption from seizure under article 445 number 8 is conditional on the 50 monthly tax unit assessed value cap, so above that amount it does not apply. It is worth checking whether the assessed value has been properly set, because sometimes it has not, and that can be corrected under the grounds we explain in how to reduce contribuciones.

Does it help to put the house in someone else's name?

It is not a strategy, it is a risk. Transfers made to evade creditors can be challenged, and on top of that you lose control of the asset to the person it was put in the name of. We cover this in the costly mistake of transferring the house to your children.

Can I declare my house a bien familiar to protect it?

A bien familiar declaration has its own effects within family law and is not a general shield against creditors. It is worth not confusing it with the exemption from seizure under article 445, which is a different thing with its own requirements.

They seized an account where I receive my wages. What do I do?

You have to raise it within the proceedings by proving the origin of the funds with payslips and bank statements, and ask for the seizure to be lifted over that part. The more mixed the funds are, the harder it is to prove, but that does not mean it cannot be done.

Can work tools be seized?

The law protects the books and tools necessary for the debtor to practise their profession or trade, within the limits it sets itself. It is one of the least invoked protections, and it can be decisive for independent trades.

Does the protection for the family home cover a second property or one I rent out?

No. Article 445 number 8 protects the property the debtor occupies with their family. A second home, a commercial premises or a property leased to a third party are not covered by this rule, even if their assessed value is low.

On top of the seizure, they are collecting the CAE from me. Does that change anything?

Yes, quite a lot. When the creditor is the Fisco, which is what happens after the subrogation in CAE debts, the protection for the family home does not apply, and on top of that there are defences specific to the collection procedure that can be more effective than arguing the exemption from seizure. They are explained in the guide to defences against CAE collection.

How we handle it

When a seizure arrives, the first step is to check exactly what was seized and whether that asset falls within the protected categories, because it often lands on assets it should not have and no one raised the point.

After that come the deadlines, which are short, and the evidence, which is what makes the difference: payslips, assessed value certificates, and bank statements that allow the origin of the funds to be traced.

At the same time we look at the underlying debt, because in several cases the best defence is not the exemption from seizure but the procedure being used to collect it, as is happening today with CAE debts.

If the asset seized is a property with unclear registration history, we also arrange a title study, because a poorly identified seizure or a property with pre existing problems changes the picture, and it is worth knowing that beforehand, not at the hearing.

All of this is handled by our litigation team. Send us the notice of seizure and we will tell you which assets are protected, what deadline is running, and what has to be proven.