A good share of the money-related enquiries we receive at the firm open with the words «I have been defrauded», and in most of them there is no fraud, there is someone who is not paying. The belief that not paying is a crime is widespread, both among those who are owed and among those who owe and fear ending up in prison, and the Spanish codes do not support it. Article 1911 of the Civil Code provides that a debtor answers for the performance of his obligations with all his assets, present and future, and that is the consequence of non-payment, a patrimonial one enforced against whatever the debtor owns. For the matter to reach a criminal investigating court something more than non-payment is required, and that something more is defined in four specific offences, fraud under Article 248 of the Criminal Code, concealment of assets to the prejudice of creditors under Article 257, criminal insolvency under Article 259 and non-payment of maintenance under Article 227. I explain when each applies, what penalty it carries and how long it takes to become time-barred, for the creditor and for the debtor alike.
The general rule, not paying is a civil breach
A loan that is not repaid, an invoice a customer leaves unpaid, work that was paid for and delivered late and badly, or rent in arrears are breaches of civil obligations. They are pursued through the civil courts, with a formal demand first and a claim afterwards, through the order-for-payment procedure where the debt is documented or the oral procedure where the amount does not exceed 15,000 euros, the threshold in force since Royal Decree-Law 6/2023. At the end of that road lie the attachment of wages, accounts and assets, default interest and costs. There is no criminal record and no prison, however large the sum and however badly the debtor behaved during negotiations.
Supervening insolvency is not a crime either. Someone who contracted in good faith, was able to pay and then lost that ability because they lost their job, closed their business or accumulated other debts still owes the same amount, but commits no offence. The practical difficulty in those cases is not legal but one of recovery.
When non-payment is fraud, the deceit has to come first
Article 248 of the Criminal Code punishes anyone who, for gain, uses sufficient deceit to cause another to err, inducing that person to make a disposition of property to their own or a third party’s prejudice. There are five elements and the order matters. First the deceit, then the victim’s error, then the handing over of the money or goods, and as a result the loss. Fraud exists when the deceit precedes the handing over and causes it. If the deceit appears afterwards, once the debtor already has the money and starts making excuses, what you have is a breach of contract, however untrue the excuses may be.
The courts call this antecedent intent, and it is what separates the «criminalised contract» from a deal that went wrong. A contractor who takes a deposit without having a business, workers or any intention of starting the job commits fraud. A contractor who starts the job, runs out of cash halfway through and walks away owes the deposit, but is not a fraudster. Someone who advertises online a product they do not have, takes payment and disappears commits fraud, the pattern we describe in the post on Bizum scams. Someone who sells a flat or a car knowing it is not theirs, or sells it twice, commits the improper fraud of Article 251 of the Criminal Code, punishable with one to four years’ imprisonment. Someone who takes out a loan with a forged payslip commits fraud even if they pay the first instalments, because the deceit lies at the origin.
The deceit must also be «sufficient», enough to mislead a reasonably diligent person in the relevant line of business. A businessman who hands over 60,000 euros’ worth of goods to a stranger without asking for a single reference will struggle to argue that he was deceived, and the courts will tell him the loss stems from his own lack of care.
What makes fraud a demanding route is evidence. The debtor’s intention at the time of contracting cannot be seen, it is inferred from circumstantial evidence, and that evidence has to be found and documented. That they had no business licence, that they did not own the asset, that they vanished once paid, that they have done the same to others, that the company you dealt with had no real activity. Without that, the complaint is dismissed and the creditor has lost months.
What fraud is punished with and when prison is real
Basic fraud is punished under Article 249 of the Criminal Code with six months to three years’ imprisonment. If the amount defrauded does not exceed 400 euros it is a minor offence punished with a fine of one to three months. Article 250 raises the penalty to one to six years’ imprisonment and a fine of six to twelve months where the amount exceeds 50,000 euros, where a large number of people are affected, where the fraud concerns housing, or where the offender abuses a personal relationship with the victim or their business or professional credibility, among other cases. Where the amount exceeds 250,000 euros the penalty is four to eight years’ imprisonment and a fine of twelve to twenty-four months.
Actually going to prison for basic fraud is uncommon for a first offender, because sentences of up to two years may be suspended under Article 80 of the Criminal Code, normally on condition that civil liability is paid. In aggravated fraud, imprisonment is the rule. In every case the conviction includes the obligation to return what was defrauded, because civil liability arising from the offence is decided within the criminal proceedings themselves.
At the firm we practise criminal defence in these matters, acting for the prosecution and for the accused, and we conduct the civil recovery of the debt in parallel where the criminal route is not the right one or where it makes sense to keep both open.
Concealment of assets, when the debtor becomes penniless on purpose
Article 257 of the Criminal Code punishes with one to four years’ imprisonment and a fine of twelve to twenty-four months anyone who removes their assets to the prejudice of their creditors, and anyone who carries out any disposal of property to delay, hinder or prevent an attachment. The debtor incurred the debt legitimately and there was no deceit at the outset. The offence lies in what they do afterwards to avoid paying.
There are three requirements. A real debt, even if not yet claimed in court. An act by the debtor concealing, selling, gifting or putting assets in someone else’s name. And, as a result, total or partial insolvency towards that creditor. The creditor does not need a judgment and enforcement does not need to have begun. Article 257.2 clarifies that it applies to obligations of any kind, including public-law debts, and Article 257.3 raises the penalty to one to six years’ imprisonment where the debt being evaded is owed to the Tax Agency or Social Security.
Selling an asset while in debt is not always an offence. If it is sold at its real price and the money goes to pay other debts or ordinary expenses, there is no crime. There is one when the house passes to the spouse under a separation of property signed the week the formal demand arrives, when the car is gifted to a child, or when it is sold for a derisory sum to an acquaintance who lets the debtor keep using it. Article 258 further punishes with three months to one year’s imprisonment or a fine of six to eighteen months a debtor who, already within enforcement proceedings, files an incomplete or false list of assets with the court.
Criminal insolvency and the director who empties the company
Where the debtor is a company, the company’s arrears are not an offence and its directors do not incur criminal liability merely because the company fails to pay. They do when the company is hollowed out. Article 259 of the Criminal Code punishes with one to four years’ imprisonment and a fine of eight to twenty-four months anyone who, in actual or imminent insolvency, conceals assets, carries out ruinous transactions, sells below value, keeps no accounts or keeps double accounts, or destroys records. The offence is only prosecutable if the debtor has ceased to meet obligations regularly or has been declared insolvent by a court. Article 259 bis raises the penalty to two to six years where the loss exceeds 600,000 euros or affects most creditors in an especially serious way. Article 260 punishes a debtor who, already insolvent, favours some creditors over others without authority.
The typical case is the director who leaves the company without activity or assets and opens another with the same customers, premises and staff. A supplier left unpaid can go to the criminal courts, but also to the civil courts against the director personally. Debts to the Tax Agency and Social Security follow a different logic. Non-payment as such is not a crime and is enforced administratively. Tax fraud under Article 305 requires defrauding more than 120,000 euros, and the offence against Social Security under Article 307 more than 50,000, in both cases with concealment, not mere failure to pay.
Unpaid maintenance, the only non-payment that is a crime in itself
Article 227 of the Criminal Code punishes with three months to one year’s imprisonment or a fine of six to twenty-four months anyone who fails to pay, for two consecutive months or four non-consecutive months, any financial provision in favour of their spouse or children established in a court-approved agreement or a judicial decision in separation, divorce, annulment, filiation or maintenance proceedings. It is the only debt whose non-payment is a crime without deceit or concealment of assets, and there are conditions. The maintenance must come from a judge or a court-approved agreement, not a verbal arrangement. Whole monthly instalments are counted, and partial payments stop counting, according to case law, when the amount paid is merely token. The offence is only prosecuted on a complaint by the injured party or their legal representative, under Article 228.
The most contested element is ability to pay. A person who proves they could not pay because they had no income or assets does not commit the offence, because the Code punishes those who fail to pay while able to. What does not work is simply stopping the payments. If circumstances change, the family court must be asked to modify the measures, and until the maintenance is modified it is owed in full. Article 227.3 provides that reparation of the harm always includes payment of the amounts owed. On the civil side, child maintenance can be attached above the normally unattachable minimum under Article 608 of the Civil Procedure Act, and arrears become time-barred after five years under Article 1966 of the Civil Code.
What each party faces, in one table
| Conduct | Provision | Consequence or penalty | Limitation period |
|---|---|---|---|
| Simple non-payment of a debt | Art. 1911 Civil Code | Attachment of assets, interest and costs, no criminal record | 5 years (Art. 1964 Civil Code) |
| Basic fraud | Arts. 248 and 249 Criminal Code | 6 months to 3 years’ imprisonment (fine of 1 to 3 months if not over 400 euros) | 5 years (1 year if a minor offence) |
| Aggravated fraud | Art. 250 Criminal Code | 1 to 6 years’ imprisonment and a fine (4 to 8 years if over 250,000 euros) | 10 years |
| Concealment of assets | Art. 257 Criminal Code | 1 to 4 years’ imprisonment and a fine of 12 to 24 months (1 to 6 years if the debt is public) | 5 years (10 if aggravated) |
| Criminal insolvency | Art. 259 Criminal Code | 1 to 4 years’ imprisonment and a fine of 8 to 24 months | 5 years (10 if aggravated) |
| Unpaid maintenance | Art. 227 Criminal Code | 3 months to 1 year’s imprisonment or a fine of 6 to 24 months | 5 years |
The criminal limitation column follows Article 131 of the Criminal Code, which sets ten years for offences whose maximum penalty exceeds five years’ imprisonment without exceeding ten, five years for the rest and one year for minor offences. Time runs from the commission of the offence and, for continuing and permanent offences, from the last act or from when the unlawful situation ends.
Which is time-barred first, the debt or the crime
The civil action to claim a debt with no special term is time-barred after five years under Article 1964 of the Civil Code, the same period as basic fraud and concealment of assets. The difference lies in how it is interrupted. The civil period restarts with any reliable out-of-court demand, a registered letter suffices under Article 1973 of the Civil Code, which is why a properly pursued debt takes a long time to expire. The criminal period is only interrupted when proceedings are directed against the suspect, under Article 132.2 of the Criminal Code, and a private demand does not stop it. In aggravated fraud the opposite happens, the criminal action lasts ten years and may outlive a civil debt nobody claimed. Tax debts are time-barred after four years under Article 66 of the General Tax Act, and Social Security debts likewise after four.
Civil claim or criminal complaint, what arrives and what is at stake
If you are pursued civilly, you will receive from the court an order for payment or a claim with a short deadline to respond through a lawyer and court agent. If you do not respond, the proceedings continue without you and end in enforcement against your assets. If you are reported to the criminal courts, you will receive a summons to give a statement as a suspect, and nobody should attend that statement without a lawyer or improvise it. What you say there shapes the rest of the case. Afterwards comes either dismissal, which is the usual outcome where the complaint is a disguised debt claim, or the opening of trial with the penalty and a criminal record at stake.
For the creditor, a criminal complaint has an advantage and a cost. The advantage is that a conviction includes repayment and the threat of a penalty moves the debtor to pay. The cost is that the investigation takes time, demands proof of initial deceit and, if dismissed, leaves the creditor having lost time and the debtor having gained confidence. Filing a complaint knowing there was no deceit, merely to apply pressure, may amount to a false accusation under Article 456 of the Criminal Code, and threatening a complaint in order to collect strays into threats and coercion. The same reasoning applies to online purchases from sellers who never deliver, which we cover in the post on third-party seller scams on Amazon, where the line between a slow seller and a fraudster is drawn by the same antecedent intent.
If you are the one who owes
A bank or a collection agency cannot report you for fraud because you stopped paying a loan, a card or rent you contracted with your real details. The threat is baseless unless you forged documents when contracting or it can be proven that you never intended to pay. What they can do is sue you civilly, attach your assets and, after a formal demand, list you in a default register. What you must not do is move assets into other people’s names once the debt is upon you, because that turns a civil matter into possible concealment of assets.
If you have already been reported and the debt is real, paying or depositing the money before trial does not by itself close the case, but it gives rise to the mitigating circumstance of reparation of harm under Article 21.5 of the Criminal Code, which reduces the penalty, and it makes agreements with the prosecution easier. In unpaid maintenance, paying what is owed weighs decisively. For the good-faith debtor who cannot pay, the way out is civil, the second-chance mechanism regulated after Act 16/2022 reforming the Insolvency Act allows discharge of unpaid liabilities, though it excludes anyone convicted of property offences in the previous ten years, one more reason not to let a default turn into a crime.
If you are owed, what you can do today
Keep the contract, the quote, the advertisements, the messages and emails exchanged and the receipts for every payment, and do not delete conversations however much they irritate you. Note the date and content of each excuse. Find out whether others have been through the same with the same debtor, because repetition is the strongest indicator of initial intent. Send a reliable formal demand, which interrupts the civil limitation period and leaves a record. Do not sign any «full and final settlement» document in exchange for a partial payment without a lawyer reviewing it, and do not threaten to report.
Doing it alone carries two specific risks. Reporting a civil default as fraud ends in dismissal and, at worst, in a complaint for false accusation or coercion against you. Pursuing genuine fraud through the civil courts forfeits the route that truly pressures the debtor and the possibility of a conviction that includes repayment. At the firm we review the documents, determine whether there is antecedent intent or concealment of assets, and either act as prosecution or criminal defence or conduct the civil claim, depending on what the case allows. You can call +34 677 841 007 or write to us through the contact page. Have to hand the contract or messages in which the deal was agreed, proof of payments, the date of your last contact with the debtor and, if you are the one accused, the court summons exactly as you received it.
Frequently asked questions
Can I go to prison for not paying a debt?
Not for the debt itself. Article 1911 of the Civil Code makes the debtor answer with their assets, not their liberty. You can end up in criminal proceedings if there was deceit when contracting (fraud), if assets are concealed or transferred to avoid paying (concealment of assets) or if court-ordered maintenance goes unpaid for two consecutive months or four non-consecutive months while you were able to pay. Even then, sentences under two years are usually suspended for a first offender who pays.
If I pay after the complaint, is the criminal case closed?
It is not closed automatically. If there was an offence, paying before trial is treated as the mitigating circumstance of reparation of harm under Article 21.5 of the Criminal Code and reduces the penalty, and in practice it makes an agreement with the prosecution easier or leads the complainant to lose interest in continuing. In unpaid maintenance, which is only prosecuted at the request of the injured party, paying what is owed carries great weight. If there was no offence, the case is dismissed whether you pay or not.
Can the bank or a collection agency report me for fraud for stopping payments on a loan?
If you contracted with your real details and stopped paying later, there is no fraud and the threat has no basis. It would only be possible if you supplied forged documents when contracting or if it can be proven that you never intended to pay. What they can do is sue you civilly, attach your assets and, after a formal demand, list you in a default register. If collection turns into constant calls, contacting relatives or threats, you may be the one filing the complaint.
Is it worth reporting fraud or is a civil claim better?
It depends on whether there is evidence of initial deceit. If the debtor never had the asset, the business or the intention to perform and there are indications of it, the criminal route applies more pressure and a conviction includes repayment. If the debtor contracted in good faith and stopped paying later, the complaint will be dismissed and you will have lost months. For documented, low-value debts the civil claim is faster and cheaper. And if the debtor is genuinely insolvent and has hidden nothing, neither route will get your money back in the short term, and you need to weigh whether the expense is worth it.