Can’t keep up with your payments? Do you have debts in Spain? Welex’s team of professionals lawyers in Marbella can help you understand the second chance law in Spain and renegotiate or even partially or totally eliminate your debts in Spain.

If you are unable to pay part or all of the debts in Spain, at Welex, law firm in Marbella, we can help you to renegotiate or even eliminate all or part of your debts when you are unable to make the payments in Spain.

For this reason, in this blog we are going to talk to you about something that I am sure many of you do not know about, and that is the insolvency proceedings for individuals in Spain.

the second chance law in spain

What is the second chance law in Spain?

The second chance law in Spain is aimed at individuals and the self-employed who are overwhelmed by their debts in Spain situation and who, due to circumstances beyond their control, are unable to meet their payments, giving them the opportunity to “get their lives back on track and even risk new initiatives, without having to drag around indefinitely a debt burden that they will never be able to meet” (Explanatory Memorandum of Royal Decree-Law 25/2015).

Therefore, a person who has several creditors can file for voluntary insolvency proceedings, and from that moment on, the attachments will be lifted, and executions cannot be exercised, as all the assets will belong to the insolvency proceedings’ liabilities.

Firstly, an attempt will be made to reach an out-of-court agreement with your creditors in Spain.

An attempt will be made to renegotiate the debt in Spain by extending the deadlines or reducing the amount of the debts, commonly known as “quitas” or “esperas”, with the aim of improving the conditions of the debt in order to be able to repay the money. A plan and a payment schedule must be developed so that the debtor can meet the debts, and we will have a period of two months to reach this agreement.

Once an agreement has been reached, and the conditions of the debts have been improved in such a way that the debtor can pay them, an insolvency administrator is appointed, this is the person responsible for managing and administering the insolvency proceedings, and is appointed by the judge.

Therefore, the debtor will continue to have access to his or her assets, but they will be administered by the person appointed as administrator, in order to be able to pay his or her debts as agreed.

But what happens if we do not reach an agreement with our creditors or, having reached an agreement, we do not have sufficient economic capacity to comply with it?

This is usually the most common situation, as we would move on to the phase of consecutive insolvency proceedings where a judge can exonerate us from 100% of the debt.

If you need any type of consultation, contact the Welex office for any legal advise relating to the second change law in Spain.