Category: Law and ownership
Anticresis
A contract whereby the debtor hands over an income-producing property to the creditor so the creditor collects the property's income against interest and/or principal of a debt.
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A traditional figure of Paraguayan civil law, regulated by articles 2386+ of the Civil Code. Less common today than mortgages, but still seen in informal financing: the owner hands the property to the creditor, who rents it or uses it, and applies the income against the debt until amortized. Unlike a mortgage, the creditor takes possession. Often used in family arrangements or informal loans without bank access.
Example
A debtor hands over, in anticresis, a house that rents for Gs. 4,000,000 a month. The creditor collects that rent and applies it to a Gs. 300,000,000 debt — interest first, then principal — until it is paid off, at which point possession returns to the owner.