If a few years ago there was talk of Second Chance Law As an unknown salvation not only in Murcia, but throughout Spain, this situation has gradually changed over time and more specifically as a result of the appearance of Covid-19. Unfortunately the economic consequences of the pandemic have pushed many people to flirt with debt or, in the most fateful cases, to fall into a state of insolvency from which they have not managed to get out despite your efforts and efforts.
This is where many people have noticed this legal mechanism that, as gives those debtors in bankruptcy the possibility of having their debts canceled and thus being able to start a new life, has become especially important in the last year and a half. To the point that a reform is being considered for the beginning of the year 2022 of this law in order to shorten procedural times and so that applicants can benefit as soon as possible from the option to cancel your debts, technically known as the “Unsatisfied Liability Exemption Benefit” or “BEPI”.
And it is that, from the outside, everything seems to indicate that there is two ideas to modify on the table with this new reform. A, shorten the procedures and dispense with the notarial part and the extrajudicial payment agreement (With the current regulations, an attempt had to be made at an out-of-court settlement prior to the judicial phase, purely focused on achieving the BEPI) and granting the possibility of going directly to trial; and two, that The debts contracted with the Public Treasury and Social Security can no longer be exonerated (forgiven). Although this last thesis is not entirely safe, as you can read later.
What changes are going to be introduced in this very fashionable mechanism?
While is true that These two changes are the ones that are generating the most impact, the economist and CEO of the firm specializing in this procedure, Lawyers for your debts, will be in charge of detailing what are the other modifications that also deserve the attention of all applicants who at some point may resort to this legal mechanism.
He, Cristian Tanase, adds other reforms to the two premises already mentioned, such as “the recognition of the BEPI as a right, something that places the debtor in a more advantageous position; the best chance of saving common homes with a mortgage, as long as they are up to date with payment and the value of the mortgage is equal to or greater than the market value; the claim to protect the debtor to the point of presuming his good faith, in such a way that it will be the creditors who will have to prove the acts of bad faith of the applicant and greater control of the Bankruptcy Administrator’s work”.
Although, once all these changes have been mentioned, he prefers to stop at the “exclusion of exoneration of the debts of the Public Administration”, One of the points that undoubtedly is generating more controversy since it would not allow those insolvent people to get rid of the debts contracted with institutions such as the Public Treasury or Social Security.
However, and contrary to popular belief, Cristian Tanase believes that “This decision can probably be saved with the interpretation of the Courts and Tribunals, as has been done to date.”, Because we must not forget that this premise was related to the Second Chance Law from its inception until later it had to change as a result of the judicial decisions that had been given in favor of the cancellation of this type of debt.
And it is that the economist considers that “this hardening regarding debts with the Public Administration must be failed and shall overcome the legal interpretation, relying on the European directive and the jurisprudence established in Spain”. A change that if not finally produced would leave “a very positive reading of this reform, since it will allow the exoneration to be conceived as a right” and also that “judicial procedures can be resolved in the shortest possible time”, since in the Currently this type of process can extend for three years in time.