What is the second chance law?
Posted on 8/2/2023
José Montero, managing partner of Montero de Cisneros Abogados comments that "the second chance law is a tool that individuals and the self-employed can use to leave behind a serious economic situation. This is achieved through a series of negotiations and under a kind of legal "umbrella", which allows for the cancellation of debts".
To take advantage of this mechanism, it is necessary to comply with a series of requirements established by Law 25/2015 on the second chance mechanism and reduction of financial burden.
Regarding the operation, Montero comments that "this mechanism works in such a way that people who are in this situation of over-indebtedness have the opportunity to cancel all debts and take advantage of what is known as BEPI (Unsatisfied Liability Exemption Benefit). To do this, the affected party must declare bankruptcy, and within that protective shield, the BEPI will be requested, which will give rise to the second chance mechanism being applied."