Bankruptcy law in Spain – Insolvency and elimination of debts

0
Bankruptcy law in Spain - Insolvency and elimination of debts

SPANISH bankruptcy law, in relation to insolvency and elimination of debts, stipulates that there are a number of actions which are unacceptable and which if proven can negate the insolvency process.

Guilty Insolvency

-- Advertisement --

If a bankruptcy is declared guilty, it means that it is understood that the bankrupt or insolvent is responsible for the insolvency.

Legally, this can be declared, when the debtor, voluntarily or in a negligent way, has created or worsened the insolvency.


However, the insolvency will be classified as unplanned, if it is not the fault of the person declared insolvent.

For example: if a self-employed person becomes ill, is unable to work and accumulates debts which results in their insolvency. In this case, it is clear that the insolvency is not their fault or intention.


The benefit of elimination of the unsatisfied liability (in Spanish known as BEPI)

The exoneration of the unsatisfied debts (BEPI), is a possibility provided for in Spanish bankruptcy law in order to forgive unpaid debts.

This possibility is normally conditional upon the complete liquidation of the debtor’s assets.

Obviously, the BEPI, in individuals, is the ultimate goal and the main objective when starting a bankruptcy process.

Therefore, it is essential to take the necessary steps and meet the requirements, to be able to access it.

One of the requirements to be able to access the BEPI is that the bankruptcy has not been declared GUILTY.

Actions and behaviours that will cause consideration as Guilty Insolvency.

The new Bankruptcy Law, in its articles 443 and 444, reviews the actions of the debtor, which may affect the declaration of the bankruptcy as guilty.

Due to their seriousness, they always lead a Guilty Consideration;

When the debtor disposes or transfers all or part of their assets to the detriment of the creditors.

When during the two years prior to the bankruptcy, they fraudulently remove or transfer goods or rights from their patrimony.

Any serious inaccuracy in the documents presented as part of the bankruptcy.

When being obliged to keep accounts, the existence of “double accounting” (different sets of books).

It may also lead to a Guilty Decision. (although not always);

If the debtor breaches the duty to request the declaration of the insolvency on time, etc.

If the debtor breaches the duty of collaboration with the reviewing judge.

Conclusion

Therefore, and in view of the above;

If you are an individual and you are going to start a bankruptcy procedure, you should seek advice from a lawyer.

The final objective will be to forgive debts that cannot be paid. It is what is known as benefit of exemption of the unsatisfied liability (BEPI).

It will allow you to start over from scratch, WITHOUT DEBT.

But it is essential not to engage in conduct that prevents you from accessing this benefit which leads to the declaration of the insolvency as guilty.

If you have questions about the insolvency and elimination of debts in Spain, contact us at www.white-baos.com.

The information provided in this article is not intended to be legal advice, it merely conveys information related to legal issues.

White&Baos
Tel: +34 966 426 185
E-mail: info@white-baos.com
White & Baos 2020 – All Rights Reserved.





LEAVE A COMMENT

Please enter your comment!
Please enter your name here