ECONOMIC CONSEQUENCES AFTER THE CORONAVIRUS HEALTH CRISIS, WHAT IF WE TURN TO THE SECOND CHANCE LAW?
The Covid-19 health crisis, in the economic sphere, is leaving millions of people worldwide in a state of total insolvency. People affected by loans, garnishments, and credits, whose professional activity has been halted, have seen their income reduced to zero in many cases. They are unable to live with dignity and meet the payments they were regularly making before the COVID-19 crisis.
What can we do?
The solution = SECOND CHANCE LAW
Known as “FRESH START” or SECOND CHANCE, it has been a reality since 2015, regulated by Royal Decree-law 1/2015, of February 27, on the mechanism of second chance, reduction of financial burden, and other social measures. It allows an individual to file for bankruptcy to liquidate their debt and start anew, especially in situations that have worsened or arisen due to the economic halt caused by the Covid-19 pandemic.
Who can benefit from the Second Chance Law?
The LSO procedure is designed for individuals and self-employed persons. There are limits, but generally, it is accessible. However, each case must be analyzed to determine if it is the appropriate procedure.
How is debt forgiveness achieved? An individual can obtain a judicial declaration of debt cancellation if, declared bankrupt due to insolvency, they are in good faith in accordance with Article 178 bis of the Bankruptcy Law.
Therefore, it is necessary to prove good faith as a debtor, make an out-of-court payment agreement, and pay the necessary administrative expenses.
So, do not hesitate and if you need to know if you can take advantage of the Second Chance Law, what the requirements are to start the procedure, which debts can be canceled, or if they are canceled permanently, do not hesitate to contact our law firm.
WE LOOK FORWARD TO YOUR INQUIRY!!
Leocricia González Abogados.