The Commercial Section of the Court of First Instance of Las Palmas de Gran Canaria has issued a pioneering order by denying a citizen debt forgiveness for appreciating a pattern of progressive indebtedness "that was assumed with full awareness of the difficulty, if not impossibility, of meeting it."
According to what the High Court of Justice of the Canary Islands reported this Wednesday in a statement, magistrate Matías Martínez, a specialist in Commercial Law, has therefore rejected applying the Second Chance Law to a natural person who had requested it, despite lacking assets and the absence of opposition from the creditors who appeared.
The resolution applies, for the first time in the Commercial jurisdiction of Las Palmas, the doctrine established by the full bench of the Civil Chamber of the Supreme Court in four rulings from last February 18, which reinforce the ex officio control of the judge over the requirements of the debtor's good faith in second chance procedures, the note indicates.
The magistrate attached to the Presidency of the TSJC reminds that the exoneration can only be granted to the "good faith debtor" and emphasizes that "the verification of the requirements of article 487.1 of the Insolvency Law must be carried out ex officio by the insolvency judge, without the law subordinating said control to the opposition of any creditor", even when the insolvency administration and the creditors agree or remain silent.
After examining the documentation, the magistrate concludes that the interested party did not prove the good faith required by articles 486 and 487 of the law, upon observing "a pattern of progressive indebtedness in which each new obligation was assumed with full awareness of the difficulty, if not impossibility, of meeting it with the available resources."
Furthermore, it was verified that it was not accredited what their income was at the time of incurring each of the debts, nor what asset information they provided to the financial entities.
The order highlights that "contracting credit obligations in a situation of recognized economic precariousness, without a well-founded and accredited expectation of being able to meet them, constitutes negligent conduct that article 487.1.6 of the Revised Text of the Insolvency Law contemplates as a cause for exclusion of good faith, regardless of whether it has not merited a judgment classifying the insolvency as culpable".
He adds that the personal and labor condition of the debtor "does not exempt from the duty of elemental prudence in the assumption of economic commitments".
In application of this doctrine, the Court denies the discharge of unsatisfied liabilities and agrees to the conclusion of the insolvency proceedings, so that creditors fully retain their actions against the debtor, setting a relevant precedent in the restrictive interpretation of good faith in second chance procedures.
The Sectoral Board of Commercial Judges of the Judicial District of Las Palmas had met last March 5 to unify criteria regarding the provision of documentation when requesting the exoneration of the liability under the new jurisprudence, states the TSCJ note.