The Law of Second Chance, a medicine to get out of insolvency

This mechanism has gained great popularity as a result of the epidemic and the fatal consequences that the disease has indirectly caused in many local economies.

With the passage of time. One looks at the calendar and the months of quarantine, curfews and restrictions on movement or on the capacity of entertainment establishments and restaurants seem to be behind us. Although it sounds old, many entrepreneurs and freelancers don’t forget that these were the toughest months of their career. The majority managed to save the situation thanks to measures such as ERTE or ERE, although they also There are those who did not suffer this fate And that they should reduce the level of blind people and close their businesses permanently.

For the latter it was quite a blow To see how completely unexpected and miraculous circumstances led them to utter ruin. The bills kept coming in and there was too much red in the checking account for too little green. then played looking for a solution That would allow them to put an end to this phase of stress and discomfort.

In their search, many did something as simple as writing in Google: “How do I get rid of my debts”. Among the results obtained, the most common were the following: second chance law. Mechanism in force in Spain since 2015 These people are allowed in the event of insolvency to renegotiate their debt with the payment plan (and a significant discount of about 75% of the initial debt) Or they even completely forgive each other Thanks to what is technically known as Benefit Exemption from Unfulfilled Liability (BEPI).

Regardless of which option is chosen, the goal is only to award applicants second chance financially This allows them to be reintegrated into the economic circle and allows them to risk starting new projects in the future. Some projects that not only bring personal benefit to the person who benefits from the law of second chance, but also generate collective benefit by creating new virtual jobs.

How long does it take to get rid of your debt?

The law of second chance can be made It consists of two or three steps depending on the applicant’s intentions and the degree of insolvency. It is generally recommended to resort to this mechanism if Debt exceeded 20,000 euros. What is clear is that regardless of the outcome The first step will be purely documentaryIts purpose is to provide as much detail as possible about the applicant’s insolvency status and to check whether his or her profile meets the pre-established legal requirements.

pass the second step Celebrating trying to settle out-of-court payments Between the debtor, creditors and bankruptcy broker. In the case of concluding an agreement with a payment plan, the procedure will end in a period of 4-7 months. This option will be interesting in cases where the applicant wants to keep some of his assets.

yes against Both sides do not reach a common pointyou will have to go to courtAnd the third and final step in the search for forgiveness for all debts in a sentence. In these cases, the process takes a little longer in time period of about one year. The time already since 2020 and 2021 has passed since early applicants mired in insolvency problems decided this mechanism to forget about the pandemic debt and start over. The Law of Second Chance allowed these people to breathe a sigh of relief now.