Spanish Insolvency and Bankruptcy Law: A Clear Path to Financial Recovery

Spanish insolvency and bankruptcy law provides a structured legal framework for individuals and businesses facing financial difficulties, fully aligned with other European legal systems and the EU Insolvency Directive.

Following recent legislative reforms, insolvency proceedings in Spain have become simpler and faster, aiming to discharge the debts of both businesses and self-employed individuals whose main activity has been based in Spain for at least three months. These reforms open the door to a genuine fresh start, free from the burden of past debts.

For private individuals without commercial activity in Spain, the minimum required period of residence increases to six months in order to access debt relief through the “second chance mechanism”. This often allows for full exoneration of debts owed to private creditors, and up to €10,000 from both tax authorities and social security institutions.

While corporate entities are typically liquidated in these proceedings, individuals benefit from the potential total or partial cancellation of debts, provided they are financially able to comply with a payment plan for any remaining liabilities. Each case must be carefully evaluated to determine eligibility and options.

Importantly, Spanish insolvency procedures can also cover debts incurred outside of Spain, as well as Spanish debts with cross-border legal effects, provided these are duly assessed and documented.

At RBS Legal, we specialise in assisting German-speaking clients who are affected by or wish to initiate insolvency proceedings in Spain. We understand the challenges that come with financial distress and provide tailor-made legal strategies to protect your interests, defend your rights, and help you move forward under the best possible conditions – free from the financial burdens of the past.