In this time of crisis, many people are accumulating debts; that sadly, they will never be able to pay. Even so, legally they have the possibility to cancel the debts in Spain, and restart from 0. All this, thanks to the Second Chance Law, which was approved in 2015.
Exoneration of the unsatisfied liability or forgiveness of debts (BEPI).
This is the mechanism, by which unpaid debts are cancelled or forgiven, provided that certain requirements are met. The idea is that a person with debt has a new opportunity. So, he can start over, without the accumulated debts preventing him from making business or becoming solvent again.
Personal or subjective requirements.
For the forgiveness of debts or BEPI exoneration, several requirements must be met:
.- The debtor must be a natural person. That is, it does not apply to companies, only to individuals.
.-And must be considered as a good faith debtor, so:
.- the bankruptcy or insolvency process must NOT be declared GUILTY
.- He must not have been convicted of crimes against property, falsification of documents, against social security, etc.
Objective requirements (article 488)
.-Normally, the special credits (such as the fees of the bankruptcy administrator, etc.) and the privileged credits (mortgages, etc.), must be paid.
.- And he must have tried to reach a prior out-of-court agreement, before the start of the bankruptcy process.
Possibility of cancelling debts even if privileged credits cannot be paid, etc.
Although in principle the payment of the said credits is required. It is possible to cancel the debts in Spain and that they are forgiven, even if they cannot be paid.
This could happen with the waiver or exoneration of the debts based on a payment plan.
To do this, the following requirements must be met:
1. The debtor should have not rejected within the four years prior to the declaration of insolvency, a job offer appropriate to his capacity.
2. Must fulfil the duties of collaboration and information during the bankruptcy process.
3.º Should have not been the beneficiary of another benefit of exoneration of the unsatisfied liability within the last ten years.
In addition, even if the payment plan is not fulfilled, it is possible to request the forgiveness of debts. When a part of the income of the debtor has been used to try to fulfil with the payment plan approved, even if it is not possible to fulfil it.
The second chance law is a legal vehicle to cancel the debts in Spain that cannot be paid.
It means to be able to start from cero, without accumulated debts.
It is foreseen for individuals, not companies.
Therefore, if you have debts that you cannot pay, and you are prepared to liquidate your assets, cancel the debts in Spain and be able to start over again, thanks to the second chance law you can do it, contact us and we will help you.
The information provided in this article is not intended to be legal advice, it merely conveys information related to legal issues.
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Carlos Baos (Lawyer)
White & Baos
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