Family house and insolvency in different legislative scenarios

Abstract

It is not correct to say that a good part of foreign jurisdictions the debtor family housing is shielded from its creditors while in Spain lack of protection in this regard. The second statement is unfortunately true but the first one requires studying the multiple constraints and situations where the family home is responsible for the debts of its owner even in those systems where the house has special protection. In this paper we analyze different legislative scenarios focusing on the Spanish system where it could receive greater protection the tenant of a house declared insolvent that the owner in the same circumstances. The truth is that the loss of housing not only harms the debtor ’s personal and family interests and the possibility of a «second chance» but that does not benefit at all, the interests of the creditors. This philosophy is what inspires some recent court decisions in Spain on this matter without a specific regulatory support. This lack lead us to demand immediate legislative reform that allows the conservation of the mortgaged family home because liquidation of housing could prejudice also mortgagees, after an eventual fresh start, because of the remission of all that debt that has not been satisfied with the performance of warranty.