In today’s article we are going to talk about the Express insolvency process and bankruptcy in Spain. That is, what it consists of, and what are its main characteristics, requirements, etc.
What is the Express insolvency process?
It is known as Express insolvency process, the process regulated in articles 470 to 472 of the Spanish Insolvency law. It is known that way, because it is agreed the declaration of the insolvency process and its conclusion, at the same time.
Objective of this type of procedure
The aim is to avoid a long, expensive judicial procedure, etc.
Thus, it is allowed to end the procedure immediately, declaring insolvency, and that the assets are not sufficient. This happens when it is evident that there are no assets, or they are of very little value. Thus, it would not make sense to start a long bankruptcy procedure, when the result is already known. It is about minimising time, costs, etc.
Thus, the following requirements must be met:
– The judge should appreciate that there are not enough assets to cover the costs of the bankruptcy procedure.
– And that is not foreseen, reintegration actions, etc. That is, that assets could be recovered, etc.
– Nor should it be foreseeable, that the bankruptcy is classified as guilty. That happens when there is bad faith of the debtor.
Request or application
It may be requested by natural persons, that is, individuals; and also companies in a situation of insolvency. And they must meet the requirements outlined above. Therefore, the documentation must be provided, proving that they comply with them.
The documentation to present in these cases is the normal one. That is, the general one provided for in the bankruptcy law. Specifically in its article 7, which says that it must be presented:
1. An expressive memory of the economic and legal history of the debtor. Regarding your activity or activities developed during the last three years …
2. Full inventory of the assets and rights part of the debtor wealth …
3. The list of creditors, in alphabetical order, stating their identification, amount of the debt …
4. Number of employees …
Effects in the case of natural persons. Individuals
When the debtor and bankrupt is a natural person, if there are no assets, the procedure will conclude.
If there is any property, a bankruptcy administrator will be appointed, who will be in charge of the liquidation of the assets. And with the proceeds of its sale or liquidation, the existing credits will be paid.
After liquidation, the debtor may request forgiveness of the debts. What is known as the exoneration of the unsatisfied liability.
The information provided in this article is not intended to be legal advice, it merely conveys information related to legal issues.
Carlos Baos (Lawyer)
White & Baos.
Tel: +34 966 426 185
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