We could define, without aiming to be exhaustive, the second chance mechanism as that legal procedure (judicial - Bankruptcy) that, in certain cases, allows individuals and the self-employed to start from scratch by eliminating their debts.
Requirements of the Second Chance Law
In order to benefit from the Second Chance Law, it is necessary to meet a series of requirements that we will present below. Keep in mind that some of these elements have a deeply subjective character and that it is highly recommended to consult with a lawyer specializing in bankruptcy law to verify if you meet them. These requirements are, among others:
- Demonstrate insolvency. It is necessary to be in a situation of insolvency, which may be current or imminent, in order to file the application with the competent commercial court.
- Be a debtor in good faith. In order to obtain the exoneration of the exonerable debts, it is essential to have been debtors in good faith. Although it is true that there is no exact definition in the Second Chance Law of what could be considered a debtor in good faith, and that it will depend on each specific case. Therefore, it is advisable to consult a lawyer specializing in the matter to determine if the requirements are met.
- Not having obtained an exoneration in the last 5 years. The exoneration can only be obtained once every five years (or two years if it is through a payment plan).
What are the benefits of the Second Chance Law?
1. Elimination of debts.
One of the most relevant advantages is, obviously, the possibility of seeing all or a large part of our debts exonerated (eliminated). All of this will depend on the type of debt we have and the judicial decision regarding certain types of debts, since there are debts that are not exonerable and/or are partially exonerable.
2. Leaving the delinquency files.
One of the consequences of the accumulation of debts is being registered in delinquency files that prevent us from accessing new financing and/or resources, such as ASNEF, RAI or BADEXCUG. After the elimination of the debt, if applicable, it will be possible to request the elimination of data from the delinquency registers.
3. Cessation of harassment calls.
Another advantage of the Second Chance Law is that once the exoneration of debts has been obtained and communicated to the creditors, they must cease the harassment calls.
4. Cessation of foreclosures.
If the debt has been exonerated, it is possible to suspend the executions and foreclosures that we have on our assets, payrolls, etc.
5. Restart of financial life.
This is, if possible, the greatest benefit of the Second Chance Law, which is none other than starting over. Having the possibility of obtaining new financing again and being able to restructure your budgetary life is, without a doubt, a great benefit of this Law.
Are all debts eliminated?
The answer is no. The legislator indicates in the Consolidated Text of the Bankruptcy Law which debts would not be, a priori, exonerable. Examples of this, without aiming to be exhaustive, would be debts for alimony, debts derived from extra-contractual civil liability for death or personal injury, etc.
Can debts with the Treasury and/or Social Security be eliminated?
The Bankruptcy Law establishes that debts for public credit are not, a priori, exonerable, except for debts with the Treasury and/or Social Security, up to a limit of €10,000.00, with specific conditions. However, this is an issue that, today, continues to be debated in the courts and tribunals of our country.
Lawyers specializing in Second Chance Law.
In short, this is a matter with a certain legal complexity, which requires the assistance of a Lawyer and Solicitor. Therefore, if you are looking for competent legal assistance and, therefore, a lawyer specializing in Second Chance Law in Lanzarote, Curquejo Abogados, is presented as a viable alternative for the management of your file.