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.
Answer with approximate figures and you will get an orientation on your situation, how much public debt the law allows to be written off, and which of the two routes fits your case better. This is not a legal opinion.
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Step 1 of 4
Your situation
Can you regularly meet your payments as they fall due?
Are you, or have you been, self-employed or a business owner?
After covering your household's basic expenses, how much is left each month?
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?
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Individuals
Private persons and the self-employed, including foreign residents with debts in Spain. Companies follow a different insolvency route.
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Insolvent
Unable to regularly meet payment obligations as they fall due, or foreseeing that this will become impossible in the coming months.
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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
1
Viability assessment
An individual analysis of debts, income, assets and circumstances: whether the case is viable and which route suits it best.
2
Preparing the file
Gathering the documentation and drafting the statement of affairs, inventory and list of creditors required by law.
3
Court filing
Filing before the Commercial Court. Most consumer cases proceed as an expedited 'no-asset' insolvency.
4
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.
Debt from a revolving credit card? Before considering insolvency it is often worth examining the contract itself: revolving cards and usury claims.
Before you start you need the full list of your creditors, and the first document is your CIRBE report from the Bank of Spain, which gathers every debt and guarantee in your name. Learn how to get your CIRBE report for free.
News and official notices
Updated daily from official sources (BOE, ministries and public bodies).
Tribunal SupremoSeis sentencias de 18-02-2026 (254, 259, 260, 261, 262 y 263/2026)
Public debt is discharged creditor by creditor, not as a whole
The Supreme Court set out doctrine on article 489.1.5 of the Insolvency Act: the cap applies to each public creditor independently — the first €5,000 are discharged in full and 50% of the remainder up to €10,000 per creditor. It reaches every public-law debt, not only the Tax Agency and Social Security: town halls, regional governments, provincial councils and foral treasuries too. The final figure depends on how many public creditors there are in each case.
Tribunal SupremoDoctrina de 18-02-2026
Surcharges and late-payment interest are discharged in full
Enforcement surcharges, late-filing surcharges and default interest are classed as subordinated debt and are discharged in full, without the cap that applies to the principal of public debt. In older tax or social security debts that part is often substantial.
CriterioDoctrina de febrero de 2026
Good faith is examined by the judge on its own motion, and a derivation of liability no longer bars the discharge automatically
The court assesses good faith even if no creditor objects: the debts for which discharge is sought must be listed in full and the origin and growth of the debt explained. Conversely, a derivation of tax liability only bars the benefit where there was wilful or seriously reprehensible conduct equivalent to a very serious infringement — it is no longer an automatic obstacle.
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.
The 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.
