What requirements are needed to implement the Second Chance Act?

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The Second Chance Act allows exemption from liability dissatisfied meeting certain requirements


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The Second Chance Act amended certain provisions of the Bankruptcy Act, allowing individuals could access the Dissatisfied benefit of exemption from liability. Namely, a debtor without sufficient rights or free goods can discharge its debt. This is what is called legally “Liabilities exoneration benefit Dissatisfied” BEPI.

In this post we review the Order of the Court of First Instance number 2 of Badalona 2 June 2019 in which it is granted Liabilities exoneration benefit Dissatisfied. Specifically, He has waived a debt amounting almost to 600.000 euros thanks to the Second Chance Act. The judge justified his decision to "not recording the existence of assets and property rights to satisfy claims ".

Fact background,,es,Juan Alberto and Paulina filed suit against FTA,,es,Asset Securitization Fund,,es,requesting the declaration of nullity for abusive of the floor and ceiling clauses contained in the novation contract of the mortgage loan of,,es,with the corresponding refund of amounts unduly collected,,es,The Securitization Fund Management Company,,es,Beech,,es,acting on behalf of FTA, he responded to said claim alleging that he lacked passive legitimacy since the entity had no legal personality and that it constituted only a private and open fund and that therefore the passive legitimization corresponded to BBVA as successor of Catalunya Banc that was the Company fund constituent,,es

Ms.. Maria Purification entered bankrupt after suffering business losses.

Your household only had revenues of 1.849 euros. While, its debt amounted to almost 600.000 euros.

After this situation, It began in the Court of First Instance No.. 2 I Badalona procedure that was insolvent Dña. Maria Purification.

The debtor applied for the benefit of exemption from liability dissatisfied (BEPI).

Primera Instancia

The 2 June 2019 the Court of First Instance No.,,es,of Almería dictated auto initiating the phase of liquidation of Construcciones Nativen S.L,,es,the insured initiated payment proceeding against the insurer in the amount of € 161,086.24,,es,the insured filed ordinary lawsuit for the same amount against the insurer,,es,who opposed, alleging the prescription of the action brought against him,,es,de Madrid ruled in favor of the insurer. & nbsp; The judge understood the action prescribed based on the art,,es,LCS that establishes a term of two years,,es,The dies a quo would be the,,es,two years after MELV was able to take action against the debtor,,es,The claim filed,,es,the action was prescribed,,es. 2 Badalona, where the procedure was followed concursal, He issued an order resolving the request of the insolvent.

The court decided to order the conclusion of the contest for insufficient active mass.

The judge cited Article. 176.1.3Number of the Insolvency Act (LC) It is establishing the possibility of concluding and archive the contest when there was a failure of the active material to satisfy claims against the estate.

To understand the meaning of the expression "failure of the active mass ", the judge referred to the art. 176 bis LC whereby the conclusion of competition proceed for insufficient mass active when "the assets of the insolvent debtor is presumably not sufficient for the satisfaction of claims against the estate, unless the court considers that these amounts are guaranteed by a third party sufficiently ". So good, the article itself set an exception, and it was when they were lawsuits pending reintegration of active mass or third party liability requirements.

In this case, the bankruptcy administration reported that there were not enough assets for the payment of claims against the estate generated. There were no viable reintegration actions.

It concluded that there was insufficient free goods for the payment of claims against the estate. It was concluded from the statement and file of the contest in accordance with art. 242.9º LC.

So good, was necessary to examine that met the requirements for the benefit of the exemption from liability dissatisfied. For this, the judge cited the art. 178 to LC.

this Article. 178 LC bis fixed dissatisfied that the exemption from liability could be obtained:

  • by debtor natural person and,
  • when the contest had ended by settlement or failure of the active mass.

This request for exemption should be submitted before the judge who was hearing the contest and within hearing that it had granted (second paragraph).

The benefit of the exemption debtors will only be accepted in good faith. The third paragraph of that article reflected that should be understood by good faith:

1.- That the contest would not have been convicted.

If he had been convicted, the judge in the circumstances and provided there was no willful misconduct or gross negligence, I could grant.

2.- The debtor I have not been convicted by final judgment for certain economic crimes in 10 years preceding the declaration of insolvency.

3.- The debtor would held or sought a settlement payment.

4.- The debtor would fully satisfied the claims against the estate and the privileged insolvency claims. For not having attempted a settlement payment, I have met at least 25% the amount of ordinary insolvency claims.

The, alternatively the above requirement, fulfill the following:

  1. Agreed to submit to a payment plan
  2. It had not breached its obligations of cooperation
  3. I would not have obtained the benefit of exclusion in the past 10 years old
  4. I would not have turned down a job offer to its optimum capacity within 4 years preceding the declaration of insolvency
  5. Formed expressly accept that obtaining profit consist in the special section of the Bankruptcy Public Registry for a period of 5 years old.

Once the application has, This transfer was given to the insolvency administrator and the creditors personates. Which had a period of 5 days to make the allegations they deemed necessary in relation to the grant of the benefit.

If the Bankruptcy Administration and creditors showed their accordance, the bankruptcy judge granted provisionally, the benefit of exemption. So, He declared the conclusion of the contest by the end of the liquidation phase.

If instead showed their disagreement They could just found it on the Failure to comply with any / s of the requirements previous. De ser así, the process continued by insolvency proceedings of incident.

Any bankruptcy creditor would be entitled to ask the bankruptcy judge to withdraw the benefit of exemption when the 5 years after their grant, income exist, hidden assets or rights of the debtor. With the exception of the attachable assets.

It could also be requested revoked if during the period for compliance with the payment plan:

  1. Incurred in circumstances (the taken into account for the existence of good faith) that would have prevented the grant of the benefit
  2. In breach of the obligation to pay non-exempt debts in accordance with the payment plan or,
  3. significantly would improve the economic situation of the debtor by inheritance, legacy, donation, game of luck, random. So he could pay all outstanding debts.

The procedure for revocation of the benefit would continue in accordance with the provisions of the Civil Procedure Act for the oral proceedings.

If the judge agreed to withdraw the benefit, creditors would recover fullness of their actions against the debtor to enforce appropriations not satisfied.

Conversely, After the deadline for compliance with the payment plan without the benefit it has been revoked, the bankruptcy judge, at the request of the debtor, auto dictate. At, recognize with definitive exemption from liability dissatisfied contest.

It could also, after hearing the creditors and under the circumstances, declare final exoneration of the debtor had not fully complied with the payment plan, as long as, He had intended to enforcement, at least, half of the income received during the period 5 years or a quarter of that revenue.

Examined the said article, the court concluded that the request transfer of Bepi was given to all parties in person and none opposed. Thus, conforme al art. 178.4 to LC, accord the benefit came as, prior to the insolvency of attempted a settlement payment. Concurred that the requirements of the Act.


For granting the benefit of exemption from liability dissatisfied the occurrence of certain requirements is necessary. These requirements aim to ensure good faith conduct by the bankrupt, avoiding obtain the benefit of exemption those who resort to fraud or act with gross negligence.

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