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What is the second chance law?

What is the second chance law?

What is the Second Chance Law? 

La Second Chance Law It allows individuals and the self-employed to restructure their debts when certain conditions are met. This legal mechanism aims to save the bad situation of those who cannot pay their debts, without neglecting the collection rights of creditors.

Who can benefit from the Second Chance Law?  

La Second Chance Law It is a measure that self-employed people and individuals who find themselves in a situation of economic blockade or over-indebtedness can resort to, due to debts that they have not been able to pay off.

The procedure to avail of this legal remedy is practically identical in the case of individuals and self-employed workers, with the difference that individuals must initiate the process before a notary, and the self-employed in the corresponding Commercial Registry or Chamber of Commerce.


What is the Second Chance Law? - Murcia | ACC LEGAL LAWYERS

Requirements to benefit from the Second Chance Law

La Second Chance Law It is not only designed so that those people who find themselves in a complicated economic situation can stay afloat, but it also tries to save, to the extent possible, the collection of creditors.

Therefore, to resort to this mechanism the debtor must meet a series of requirements:

  • Be a debtor in good faith.
  • The amount of debts must not exceed five million euros.
  • Prove that you do not have sufficient assets to pay the debts.
  • Not be the subject of a guilty contest. That is, the insolvency situation has not occurred through fraud or gross negligence.
  • Having attempted to reach an out-of-court agreement with creditors.
  • Not having been convicted of economic crimes, crimes against workers' rights, property, the Public Treasury or Social Security.
  • Not having complied with this law in the last 10 years.

How does the Second Chance Act process work?

Although the Second Chance Law offers the possibility of starting from scratch, it must be taken into account that the debtor must invest all of his assets, if he had any, in paying off his debts.

Once the assets have been liquidated, you will be able to present an extrajudicial payment agreement, which will include the withdrawals and waits to form a realistic payment plan for the remaining debt.

Although the Second Chance Law requires that an attempt be made to reach an agreement, it is very common for this to be rejected due to lack of understanding between creditor and debtors. Therefore, we recommend that you have a team of lawyers specialized in the Second Chance Law in Murcia to help you present these agreements and promote the success of the operation.

If in the end it is not possible to reach an agreement, it will lead to consecutive competition, the judicial phase where the exoneration of outstanding debts will be requested.

If you still have doubts about what is the Second Chance Law, how it works and if you can benefit from this measure, we encourage you to contact our law firm in Murcia capital. Make an appointment!


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