Criminal Lawyers in Second Chance Law

The Spanish Second Chance Law, originally enacted as Act 25/2015 and deeply reformed by Act 16/2022 (transposing EU Directive 2019/1023 on restructuring frameworks), is the legal mechanism allowing individuals (private citizens and self-employed) in insolvency to obtain the discharge of unsatisfied liabilities (EPI), previously known as BEPI. Its objective is to articulate a fresh start for honest debtors caught in over-indebtedness without serious fault or fraud. Consolidated case-law from the 1st Chamber of the Supreme Court has delimited the contours of the benefit: good faith is presumed and compliance with legal requirements must be evidenced to trigger debt cancellation.

The procedure is articulated in several phases. First, the preliminary viability analysis: composition of liabilities, assets, identification of public credits (Tax Authority and Social Security) and private credits, and evaluation of any potentially excluding actions (socioeconomic offences, asset concealment, forgery). Second, the attempt at out-of-court payment agreement before an insolvency mediator or notary, unless the direct judicial route reinforced by the 2022 reform is chosen. Third, the consecutive insolvency proceedings with liquidation of realisable assets. Fourth, the application for discharge of unsatisfied liabilities, which may be direct (without payment plan) or conditional on a payment plan of up to 3 years (5 if affecting the habitual dwelling). Act 16/2022 simplified the itineraries, eliminating the mandatory out-of-court agreement in many cases.

The dischargeable debts reach, as a rule, all private debts: credit cards, personal loans, microcredits, supplier debts, personal guarantees underwritten by administrators in business operations and, partially, mortgage credits for the amount not covered by the security after enforcement. A key innovation of the 2022 reform is the partial discharge of public credits: up to EUR 10,000 per debtor before the Spanish Tax Authority and another EUR 10,000 before the Social Security Treasury, with the first EUR 5,000 fully discharged and the remaining tranche (5,000-10,000) discharged at 50%. Excluded from discharge are debts for alimony, civil liability indemnities arising from wilful tort, criminal fines, court costs and, in general, salary credits for the last 60 days.

The technical defence and application planning are built on several lines. First, good-faith certification (Art. 487 of the Insolvency Restatement): no convictions in the previous 10 years for crimes against property, socioeconomic offences, document forgery, against the Tax Authority or Social Security, and no insolvency culpability declaration by intent or gross negligence. Second, delineation of liabilities: identification of contingent credits, accrued interest, overdraft fees and abusive clauses susceptible to parallel civil challenge. Third, protection of the habitual dwelling via the 5-year payment plan when the property is necessary for the debtor and family. Fourth, coordination with accessory criminal liability: if the debtor has personally underwritten corporate operations or acted as a culpable insolvency administrator, the strategy must be articulated with the corresponding criminal defence.

In current forensic practice, we observe a strong increase in second-chance applications after the 2022 reform, especially among self-employed people affected by the health crisis, guarantors of failed business operations and consumers over-indebted by revolving credits (cards with APR above 20%) declared usurious by case-law. Organic Law 1/2025 on Justice Service Efficiency and the reform of the Insolvency Restatement by Royal Decree-Law 1/2024 have streamlined deadlines and reinforced judicial control over the payment plan. At Alonso Sala, we tackle each file with cross-cutting commercial-criminal analysis: we conduct prior patrimonial audit, evaluate latent criminal contingencies (especially Arts. 257-261 CP on punishable insolvencies), articulate the application and defend the granting of the discharge against typical challenges by the Tax Authority and creditors. We treat each file as a comprehensive patrimonial reset operation, not as a mere insolvency formality.