Luis Suárez Mariño, lawyer: “Without the Second Chance law, the underground economy and fraud grow”

–Until its entry into force, it was impossible for a person, consumer or entrepreneur to start over; Even if, in a state of insolvency, he went to a bankruptcy, once the asset was liquidated and the bankruptcy ended, the person continued to be liable for the debts that remained unpaid with all his future assets until their prescription.

– How many people resort to this legal procedure?

– Last August, 19,500 individuals and micro-SMEs had benefited from the law, according to the Center for Studies on the Second Chance Law, which uses data from the INE. However, the increasingly frequent news of people who have benefited from the law have accentuated the number of those who come to it in these first months of the year.

– In the midst of a pandemic, with hundreds of freelancers suffocated by debt, could this be an opportunity?

–Yes, of course, I am of the opinion that when the ICO credits begin to expire there will be a lot of small businessmen who will come to her because they cannot afford to pay them.

–In what types of individual cases is it possible to access this procedure?

-More than talking about possibility, we should talk about when it is indicated to go to it, which is in those in which with your monthly income you can not face your debts and with a reduction and / or wait you can get out of that situation and, in addition , it turns out that the amount of the debts is higher than the realizable asset. All this provided that this liability is not mainly made up of debts with Social Security or Public Finance, which are not exonerated according to the latest legal amendment.

–When you talk about the value of realizable assets, is that of the habitual residence among them? Is it possible to save it?

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-If the house is free of charges, it is not possible to save it, it will have to be settled in order to pay the debts in order of rank and equitably between the creditors, but if the house has a mortgage charge and the current value of the housing does not exceed the amount of the debt pending payment with the bank, it could be maintained, logically, if the debt continues to be paid.

–How long does the procedure take until the payment waiver is achieved?

–It has two different phases. One that tries to achieve an out-of-court payment agreement through the intervention of a bankruptcy mediator who will transfer the debtor’s payment proposal to the creditors, which will include a debt relief and / or deferral. This phase lasts for approximately two months from the moment the bankruptcy mediator accepts his position. If the agreement is not reached, which is the most frequent since financial institutions generally do not accept or even attend the call to reach the agreement proposed by the debtor, the consecutive bankruptcy will have to be instituted, which tends to settle the patrimony of the debtor, when there is an asset, and later request the benefit of exoneration of the unsatisfied liability, which is the judicial ruling that actually cancels all the debts. When there is no realizable asset [no hay bienes] With the bankruptcy application, the end of the same is already interested due to the absence of active mass and once the judge declares it, that benefit can be instituted. The processing of this second stage can extend the process up to six or seven months. However, the duration of each procedure will depend on the workload of the competent court to resolve the procedure.

– When do debts expire in Spain?

–Currently, the limitation period for personal debts, not guaranteed with a real estate mortgage or other real guarantee, is five years, as long as the prescription is not interrupted due to any judicial or extrajudicial claim, which, if the case arises, implies returning to count the deadline again.

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– The debts are canceled forever or is it possible that someone revokes it?

– Certainly the debts are canceled with the judicial resolution of exoneration of the unsatisfied liability, but the exoneration can be revoked if the debtor improves his fortune in the following five years or if it is shown, at the request of any creditor, that there has been bad faith of the debtor, for example, for having concealed assets.

“What about liens?”

–Once the file of the out-of-court payment agreement has been filed before the notary of the debtor’s domicile or commercial registrar if the debtor is a businessman, seizures and executions are paralyzed.

–Acting “in good faith” is the cornerstone of the Second Chance procedure, what exactly does it mean?

–Acting in good faith and going to bankruptcy mediation, requesting a file of an out-of-court payment agreement and proposing to the creditors an agreement to pay the debts is the greatest sample of that good faith included in the law. Then there are other requirements, such as that the consecutive bankruptcy has not been found guilty; although even when the bankruptcy has been declared guilty for breach of the duty to request the declaration of the bankruptcy in time, the judge may grant the benefit provided that no fraud or gross negligence of the debtor is appreciated; that the debtor has not been convicted in a final judgment for crimes against property, against the socio-economic order, of false documents, against the Public Treasury and Social Security or against the rights of workers in the 10 years prior to the declaration of insolvency , or that the debtor has not rejected an offer of employment “adequate to his capacity”, without the law clarifying what conditions the offer or the remuneration offered must meet

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– Can the objective of this rule be perverted?

–The standard is good, it exists in countries like Germany and France, to give two well-known and close examples, and it works. The rule tries to return to the economic system and recover for it people who without it would have no other way out than the underground economy. There may be, as in everything, picaresque, but the greatest picaresque is that of the financial entities that grant credits and loans, with abusive and disproportionate interests, knowing that some will be bankrupt, but those bankruptcies have already been discounted by their risk departments , today in the hands of algorithms. To realize that it compensates them, one only has to look at the bank’s income statement.

– I am bankrupt due to various circumstances, do you advise me to take advantage of this rule in the first place?

-Of course. Experience has shown that when there are no second-chance mechanisms, it is practically impossible to re-enter the regular circuit of credit and the economy, and this obviously does not favor the debtor himself, or the financial institutions, or the collecting administrations. of taxes; On the contrary, not availing themselves of this rule what facilitates, I insist, the increase in the underground economy and fraud. Precisely what is intended with the law is that a person, despite a business or personal economic failure, has the possibility of getting his life back on track, opening the doors of credit and even being able to risk undertaking new business initiatives, without having to drag indefinitely a slab of debt that you will never be able to satisfy.

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