Lawyers specialized in the Second Chance Law in Girona

What is the Second Chance Law?

Law 25/2015, of July 28, on the Second chance mechanism, debt reduction, and other social measures is designed for individuals and self-employed workers who are in a state of insolvency and cannot meet their debts. This law aims to avoid extreme measures like asset seizure or loss of personal property, offering a chance to start anew financially. Under this law, there are two main routes: attempting an extrajudicial payment agreement or requesting debt cancellation through a judicial procedure with the benefit of exemption from unsatisfied liabilities (BEPI). The Second Chance Law allows you to cancel personal loans, credit cards, mortgages, and other debts through exoneration of unsatisfied liabilities.

Our firm will guide you through every phase of this process, from extrajudicial negotiation with creditors to representation in court, ensuring that you access the benefits of the Second Chance Law with the utmost legal guarantees. Our experience in managing insolvency cases allows us to provide optimal protection of your rights throughout the procedure.

What are the benefits of the Second Chance Law?

Self-employed individuals and individuals facing financial deadlock or over-indebtedness due to unpaid debts can benefit from the exemption from unsatisfied liabilities. This measure provides a new opportunity to exit from insolvency.

The Second Chance Law is similar to the Bankruptcy Law, which allows companies to benefit from creditors’ bankruptcy. However, the Second Chance Law is focused on individuals and self-employed workers and is designed to help them overcome over-indebtedness by offering a path to cancel debts and the possibility of starting over without losing all personal assets.

The benefits of this law include:

• Overcoming overdue debts and exiting credit bureaus such as ASNEF or RAI, which can help avoid the risk of social exclusion.
• Regaining access to the labor market and the possibility of applying for aid and grants.
• Halt executions, asset seizures, creditor harassment, and interest increases.
• Continue your business if you are self-employed or maintain your job.
• Cancel debts through the exemption of unsatisfied liabilities (BEPI).

With the Second Chance Law applied to individuals, those who have suffered financial difficulties will no longer have to respond to debts with their present or future assets (such as housing, vehicles, or salaries) indefinitely, thus offering a fresh start.

Self-Employed and the Second Chance Law

The Second Chance Law is not only for individuals but also for self-employed workers facing financial difficulties. If you are self-employed and have debts you cannot pay, this law allows you to cancel your debts and resume your business activity without the unsustainable burden of past obligations. Our team specializes in debt restructuring for self-employed workers and defending their interests. Our services include:

• Complete advice on the Second Chance Law: We help you understand the process, your rights, and the available options for total or partial debt cancellation.
• Debt restructuring for businesses: We negotiate with creditors to reach agreements that allow you to continue your business activities while reducing or restructuring your financial commitments.
• Protection of essential assets for the business: We ensure that you can keep the necessary assets for your business operations, minimizing the impact on your ability to generate income.

The Second Chance Law offers self-employed individuals the opportunity to restart without being trapped in a spiral of debt. This legislation is a crucial tool for revitalizing your business and recovering financial peace of mind.

What are the requirements of the Second Chance Law for exemption from unsatisfied liabilities (BEPI)?

To apply for the Second Chance Law and obtain debt cancellation, you must meet a series of legal requirements:

• Attempt an extrajudicial payment agreement: Before requesting exemption, you must try to renegotiate the debts with creditors. If no agreement is reached, the judicial procedure can be initiated.
• Be considered a debtor in good faith: The debtor must meet certain conditions, such as not having been convicted of economic or social crimes, not having obtained debt exemption in the last 10 years, and not hiding assets. They must cooperate with the court and not incur more debts during the process.
• Be in a state of insolvency: The debtor must demonstrate that they cannot meet their payments, either in current or imminent insolvency.
• Not have sufficient assets to cover debts: The debtor must have liquidated their assets to pay off debts, except for protected assets such as the family home, if applicable.
• Pay unavoidable debts: Debts to Tax Authorities and Social Security cannot be fully exempted, although they can be restructured. Alimony payments, fines, and public penalties cannot be forgiven.
• No criminal records in the last 10 years for socio-economic crimes, property crimes, document falsification, or others related to Social Security or Tax Authorities.
• At least two debts with two different entities, with no maximum limit on the number of debts.
• Not having used the Second Chance Law in the last 5 years or in the last 2 years if a payment plan has been followed.
• No serious administrative offenses: In cases of serious violations, these must be paid off before requesting debt cancellation.
• The total debt cannot exceed 5 million euros.

These requirements ensure that only those who truly need it and have acted in good faith can benefit from the Second Chance Law and obtain debt exemption.

Debt Cancellation: Exemption from unsatisfied liabilities (BEPI)

If no extrajudicial agreement is reached, you can apply for the Benefit of Exemption from Unsatisfied Liabilities (BEPI). This benefit allows for the total or partial cancellation of debts, providing a true second chance for people who have acted in good faith. Our services include:

• Debt cancellation request: We handle the entire legal process to request debt cancellation, ensuring compliance with legal requirements, such as demonstrating insolvency and having attempted an extrajudicial agreement with creditors.
• Judicial representation: Our firm will represent you throughout the judicial procedure, ensuring your interests are properly defended in court. We will guide you through the process of requesting exemption from unsatisfied liabilities, ensuring all legal steps are followed correctly.
• Advice on exonerable debts: We help identify which debts can be exempted under the law, such as consumer loans, personal loans, mortgages, and other types of debt. It’s important to note that debts to Tax Authorities or Social Security may require special treatment and cannot always be exempted.

Asset retention

One of the key advantages of the Second Chance Law is the possibility of retaining part of your assets while cancelling your debts, as long as you meet the legal requirements.

• Protection of the primary residence: We can work to protect your primary residence from seizure, provided the circumstances allow. To cancel debts, it is not always necessary to liquidate all of the debtor’s assets. Under certain conditions, the debtor can keep essential assets, such as their primary residence, as long as legal requirements are met. This allows the debtor to keep their home while seeking a financial solution without losing all assets.
• Protection of essential assets: We help you retain the essential assets needed to continue your business, especially if you are self-employed or a business owner. The law offers protections for certain goods necessary for economic activity, helping your long-term financial recovery.

Which debts cannot be cancelled?

Not all debts are cancelled under the Second Chance Law. Debts with Tax Authorities and Social Security have specific limitations: they can only be cancelled up to €10,000 each, and independently. The remaining amount is managed through a payment plan with the relevant administration. Also, any new debts generated afterward are not included in the cancellation process.

Regarding mortgages, the Second Chance Law does not provide total protection, but it does have a special application. If a mortgage foreclosure occurs and the debtor cannot pay the remaining debt, the balance after the sale of the mortgaged property may be exempted. This can be achieved through dación en pago (a mechanism that allows the debtor to hand over the property to cancel the mortgage debt).

Thus, the law allows you to end your insolvency situation, as 100% of the mortgage debt could be cancelled if the home is handed over as part of the payment. This means that once the property is delivered, the debtor may be exempt from paying the remaining mortgage debt.

Do debts disappear permanently under the Second Chance Law?

Debts disappear once they are cancelled under the Second Chance Law. However, for a period of 5 years, the court may review the case if creditors request it. This could happen if there is suspicion that the debtor has not acted in good faith. If the debtor’s economic situation significantly improves during this period, the benefit of exemption from unsatisfied liabilities could be revoked. Otherwise, after these 5 years, the debts disappear permanently.

In the future, someone who has already used the Second Chance Law may apply again, as long as they do not file for bankruptcy within the next 10 years.

Our services in the Second Chance Law

Debt restructuring

The first step under the Second Chance Law (Law 25/2015, of July 28) is to attempt an extrajudicial payment agreement. This procedure is aimed at finding a more flexible solution with creditors. We can help by offering the following services:

• Mediation with creditors: We act as mediators to negotiate directly with your creditors to achieve a debt restructuring that is more convenient and feasible for you.
• Payment proposal: We design a realistic and feasible payment plan for your financial situation, which can be accepted by creditors. This plan may include reducing debt amounts or establishing new payment terms.
• Extrajudicial payment agreements: If an agreement is reached, we ensure it is legally formalized according to the legal requirements, thus avoiding future conflicts with creditors. These agreements have the same validity as a court ruling.

Required documentation to apply for the Second Chance Law

Applying for the Second Chance Law involves initiating a judicial process that requires the submission of specific documents. It is essential to present all documentation proving your debts and clearly demonstrating your insolvency situation. This information allows the court to assess the debtor’s financial situation and determine if they meet the requirements for benefiting from this debt exemption mechanism.

• Insolvency certificates
• Complete list of creditors
• Inventory of assets
• Accounting records (if self-employed or a business owner)
• Financial situation declaration
• Extrajudicial mediation attempt
• Tax documentation
• Bank statements
• Contracts and loan agreements
• Previous judicial rulings (if any)
• Criminal record certificate
• Collateral documentation

Why Choose us?

• Proven experience: With years of experience in managing insolvency cases and applying the Second Chance Law, our team of lawyers has helped numerous clients regain their financial stability. Our experience allows us to handle each case with maximum effectiveness and success guarantees.
• Personalized and tailored service: We understand that every situation is unique, so we offer completely personalized advice, adapted to your specific needs and individual circumstances.
• Comprehensive and complete solution: We take care of all stages of the process, from extrajudicial mediation with creditors to judicial representation in court, ensuring the procedure is managed professionally, efficiently, and without complications.
• Commitment to your future: Our mission is to help you leave behind your debts and regain financial peace. We are committed to offering continuous support throughout the entire process, developing a strategy that resolves your current problems and allows you to look forward with optimism.
• Transparency and trust: We know that trusting someone with your financial problems is not easy. That’s why we act with complete transparency throughout the process. We inform you of every step we take and ensure you clearly understand your options.

Contact us for a consultation

If you are struggling to meet your debts, don’t wait any longer. We understand how stressful this situation can be, and we’re here to help. Contact us today for a consultation, and we will analyze your situation in detail, providing you with the necessary guidance to make the best decisions toward your second financial opportunity. With us, you are not alone; we will guide you every step of the way to regain the peace of mind you deserve.