Since the creation of the Second Chance Law, in 2015, more than 15,000 people have been able to cancel their debts thanks to it. A relevant fact is that half of the people who have taken advantage of this law did so during the first half of 2021, as a consequence of the financial problems derived from the pandemic. The crisis situation derived from the COVID-19 pandemic caused a large number of companies to be on the brink of bankruptcy.
The Second Chance Law is an administrative process that allows individuals to cancel a portion of their debts. One of the things that characterizes this Law is the requirement that exists for an agreement to be reached between the creditor and the debtor. In addition to meeting certain conditions such as not exceeding 5 million euros in debt, proving that the debts have been contracted in good faith or not having opted for it in the last 10 years.
With the loss of employment, many times, we face very complicated financial situations. Due to the bankruptcy of his company, a man from Cordoba was left unemployed and seeing how little by little, in less than a year, his economy was deteriorating. To this we had to add the lack of renegotiations of his loans and credits. In a short time, the claims and the threats of embargoes were more and more pressing and the debt was growing little by little.
Through the help and advice of the lawyers from the Debt Assistance Association, this man took charge of the situation to process the Second Chance Law and reverse an increasingly untenable situation.
This situation was accelerated by the receipt of a notice of seizure of his home that implied the seizure of the property without the cancellation of his debts since these had reached a much higher value. Thanks to the Second Chance Law, the delivery of the home could be converted into full payment of the debt that had been contracted.
In the first place, for this file, a pre-bankruptcy proceeded to be presented. Thanks to this writing, it is possible to cease the payment obligation and, therefore, the embargo can be stopped.
In accordance with the old Bankruptcy Law, the out-of-court payment agreement process was carried out with the presentation of a proposal to the creditors. The answer was negative, but, thanks to the new bankruptcy reform, the procedure has become not mandatory, so we are facing a much faster and less expensive process.
Thanks to this, the debtor was able to request the forgiveness of his debts from the Court of Córdoba and on September 26, 2022 it was resolved by the Commercial Court of the same city.
Without any doubt, the application of the Second Chance Law was carried out in this case.
Recognized ordinary and subordinate credits.
Credits not recognized in the list, whatever their type, prior to the declaration of bankruptcy.
Public law credits and food credits with ordinary and subordinate qualification.
All this could be carried out thanks to the fact that the debtor met the requirements that were imposed to be able to be a beneficiary of the Second Chance Law:
The Second Chance Law allows you to cancel debts that remain pending after an auction and after the execution of a property. Those debts that had been contracted with Social Security or with the Tax Agency could not be cancelled.
In addition, there is no number of creditors from which a person can be released thanks to the Second Chance Law. Remember that the only limitation is not to exceed the debt of 5 million euros.
