They forgive a debt of €540,000 to two entrepreneurs after losing their businesses and keep their home
Since its implementation in 2015, the Second Chance Law has allowed many natural persons in a situation of insolvency to start a new life without debt. With the economic problems caused by the pandemic, many businesses have had to close and even some people have been involved in debt due to requested loans. This measure can help get rid of them and even maintain their properties no need however.
It should be noted that this same year a reform of the bankruptcy law was approved that incorporates different updates to adapt our regulations to the European Directive 2019/1023. Among which are some maximum deadlines for achieve forgiveness of debtsthe suppression and even the reduction of many added costs of this process and the possibility of keeping the habitual residence as property if a provisional waiver.
This is precisely the option that has allowed a couple of businessmen get rid of a debt of more than half a million euros that they contracted after the 2008 crisis, when their businesses failed and they were unable to meet the resulting expenses. As they point out from the Debt Relief Association, which has provided them with the necessary assistance to win this trial.
Debts for two failed businesses
The couple of entrepreneurs from Madrid decided create a company in 2007, but a couple of years later, when the economic crisis hit, they were forced to close before the situation got any worse. It was then that they began to have debts with the Tax Agency and his only income came from unemployment benefit.
Years later, in 2015, they decided reopen a business of wholesale trade, but their turnover was not as expected and due to the delinquency of the clients they had to close in 2019. At this time they had contracted obligations of 539,000.32 eurosso they were forced to ask for help to breathe easy.
They keep the house and two cars
The lawyers of the Entrepreneurship Assistance Association studied their case and determined that these debtors could avail themselves of the Second Chance Law. “Courts are becoming more and more aware that public credits must be included in the exemption, following the European Union directive. In addition, with the bankruptcy reform, it is already expressly included in the Law that 10,000 euros with each administrator must be exonerated, practically, without questioning,” says the firm’s lawyer, Fran Bautista.
Although initially an attempt was made to reach an agreement with the creditors through a proposal of payments according to income, was denied. Finally, they had to resort to the law and thanks to this the marriage has managed to get rid of this debt of more than half a million euros. Furthermore, they managed exclude property owned from liquidationbeing able to maintain their habitual residence with an associated mortgage that they can continue paying the installments and two vehicles that are necessary for them to work.
According to the agreement, the debtors will only have to pay a payment plan corresponding to the “non-exemptible” public debt, specifically 200 euros for 5 years. With this ruling, the creditors will not be able to claim any further payment. nor include in the delinquent file to this marriage. Likewise, they can try to set up another business if they wish, with the condition that they will not be able to return to this Law in 10 years.
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