Carlos Baos

Insolvency process in Spain. When the debts could be considered definitively cancelled. White Baos Lawyer

By Euro Weekly News Media • Updated: 18 Mar 2022 • 13:02

Since 2015 there is a possibility in Spain when it comes to cancel debts. Thanks to the Second Chance Law the possibility of cancelling the debts of the insolvency proceedings is contemplated (provided that specific requirements are met).

Sometimes, nevertheless, we are often asked by our clients what happens once the debt is cancelled. Is the cancelled debt cancelled forever? Indeed, cancelled debts, once the five-year revocation period has passed, will be cancelled forever.

Although there are different ways of cancelling the debts, no one can claim this debt once five years have passed without the benefit being revoked.

But could creditors in insolvency proceedings claim debts again that had been cancelled? Actually, creditors in insolvency proceedings may only claim debts again in the cases expressly determined in the Second Chance Law. The bankruptcy judge could revoke the granting of the exoneration if, during the five years following its granting, it is found that the debtor has concealed assets or income in order to be able to pay the bankruptcy, unless these are non-attachable assets.

When the discharge has been granted by a payment plan, creditors could also ask for the revocation of the grant of the discharge if the debtor fails to comply with the payment plan. They can also claim if the debtor improves his financial situation and is able to pay all claims, for example, when an inheritance has been received. And they can also ask for the revocation if the debtor loses the requirements of being a bona fide debtor.

So it could be concluded that if five years have passed and there is a final judicial decision in which the debt is exonerated, debtors can’t be requested for the outstanding money.

If your situation is that of a creditor or debtor in an insolvency proceeding and you have more doubts related to this, please contact us.