Since last year, the Official State Gazette (BOE) has included the reform of the Bankruptcy Law, a rule that affects both individuals and legal entities in a situation of economic difficulties. In this sense, they have introduced new features for citizens in relation to the Second Chance Law. This process allows both individuals and the self-employed to get rid of outstanding debts and start a life without debts.
Among the novelties, it stands out that the out-of-court payment agreement (AEP) is no longer mandatory, so this represents a notable improvement in the terms to obtain debt forgiveness. Likewise, the cases will not exceed a year from the pre-contest until the final exoneration, as confirmed on August 25 in the Congress of Deputies.
On the other hand, the regulation by which the cancellation of public debts was prohibited is changed and now the payment exemption of 10,000 euros to each public administration is approved, leaving the remaining amount subject to a payment plan. This is precisely what a man from Albacete has benefited from, who in 2019 had to close his bar and began to receive unemployment benefits.
This is how he got rid of the outstanding debt
This resident of Albacete has managed to win the battle against the Public Administration by exonerating 190,000 euros of debts, including public debts. The decrease in the turnover of his business was the trigger for his situation. He made these financial commitments after closing his business in 2019 and applying for some additional loans to compensate all his workers and suppliers for this reason. The affected person began to receive an unemployment subsidy and the difference in income received affected his solvency capacity.
All this, along with certain irregularities with Social Security, meant more than 200,000 euros in duty. “The bankruptcy reform is clear with regard to public law debts. It has a privileged consideration, but not all of it, and may be included in the request for exoneration of debts,” says the lawyer for the Aid Association to Indebtedness, Fran Bautista.
After not accepting the initial petition, the appeal filed before the Provincial Court has forced the modification of the sentence and finally the foundations of the Second Chance Law have been correctly applied, they point out from the association. After communicating the insolvency of the affected party and with the suspension of all payments, a second step begins to request a consecutive bankruptcy in the courts of Albacete, including the debt with TGSS.
Finally, the exoneration of the 189,043.89 euros that he owed definitively has been granted. It will only have to compensate the “non-exemptible” part of this public debt, which has been agreed in 60 installments of 253 euros each, which translates into a total of 15,180 euros.
Requirements to benefit from the Second Chance Law
It is a mechanism that should not deal with the rights of creditors, but should also protect them, which is why not everyone can access it. First of all, it is important to highlight that no person can make use of this instrument, but that it is limited to people who meet all the previously established requirements.
Interested parties have to certify that they lack sufficient assets to be able to pay the debts, which cannot exceed five million euros in any of the cases, and they must be able to prove that they acquired the debts acting in good faith, that is, with all the intentions of facing your payment. Additionally, they cannot have accepted it in the ten years prior to their new application.