Starting over is a right recognised by Spanish law
Spain's Second Chance Law allows individuals and self-employed workers acting in good faith to be legally released from debts they cannot pay. Here is how it works — rigorously, and without empty promises.
General information only. Every case requires an individual assessment by a qualified professional.
What is the Second Chance Law?
It is a legal mechanism — now part of the Spanish Insolvency Act, as reformed in 2022 — allowing an insolvent individual to obtain a discharge of unpaid debts: to legally stop owing them. Since the 2022 reform it is a right of the good-faith debtor, with two possible routes: discharge with liquidation of assets, or a payment plan that allows you to keep certain assets, such as your main home in some cases. It also applies to foreign residents with debts in Spain.
Who can apply?
Individuals
Private persons and the self-employed, including foreign residents with debts in Spain. Companies follow a different insolvency route.
Insolvent
Unable to regularly meet payment obligations as they fall due, or foreseeing that this will become impossible in the coming months.
In good faith
No recent convictions for economic offences, no final serious tax penalties, and no concealment of assets or information.
Which debts can be written off — and which cannot?
Generally dischargeable
Personal and consumer loans, credit cards and revolving credit, payday loans, overdrafts, debts to individuals and suppliers, and guarantees given for third parties.
With limits
Debts to the Spanish Tax Agency and Social Security are discharged only up to statutory limits (generally up to €10,000 per body, under specific calculation rules). Mortgage debt is not discharged while the security covers it.
Not dischargeable
Child and spousal maintenance, civil liability arising from criminal offences or personal injury, criminal fines and certain penalties, and some procedural costs.
The procedure, step by step
Viability assessment
An individual analysis of debts, income, assets and circumstances: whether the case is viable and which route suits it best.
Preparing the file
Gathering the documentation and drafting the statement of affairs, inventory and list of creditors required by law.
Court filing
Filing before the Commercial Court. Most consumer cases proceed as an expedited 'no-asset' insolvency.
Debt discharge
Requesting and obtaining the court order declaring the debts discharged. In the liquidation route, the effect is final from that moment.
Frequently asked questions
Will I lose my home?
Not necessarily. It depends on whether there is a mortgage, its amount versus the property's value, and the route chosen. The payment-plan route can, in certain cases, allow you to keep your main home. It is a core question of the viability assessment.
How long does it take?
As a guide, 8 to 14 months for the no-asset liquidation route, depending on the court's workload. The payment-plan route runs for 3 to 5 years until the final discharge.
Are debts to the Tax Agency and Social Security cancelled?
Only partly: the law sets limits per public body with specific calculation rules, and surcharges and interest have their own treatment. Public debt above the limits survives and must be negotiated separately.
What about my guarantors?
The discharge does not benefit them: guarantors remain liable for the debts they secured. This must be considered when planning the procedure.
Can I apply if my salary is already being garnished?
Yes. The insolvency declaration halts ongoing enforcement and garnishments over necessary assets, which usually brings immediate relief.
Will I have access to credit again?
After the discharge you can request deletion of your data from credit blacklists (ASNEF and similar), progressively rebuilding your financial life.
Practical guides
Want to know whether your case qualifies?
This service line is in preparation. If you would like to be informed when it launches, or receive general guidance about the law, write to us.
📩 Write to info@santiagolegalconsulting.esThe information in this section is general guidance only; it does not constitute legal advice and no outcome is guaranteed. Any court proceeding requires a licensed lawyer.