THE SECOND-CHANCE PROCEDURE INTRODUCED BY ROYAL DECREE-LAW 1/2015 OF 27 FEBRUARY

Abstract

In this article the author examines the reform introduced into the Insolvency Law by Royal Decree-Law 1/2015 of 27 February, on the second-chance mechanism, a reform which consolidates into law an existing case law practice whereby consumers without resources had unpaid debts written off following the bankruptcy settlement. After examining the objective and procedural eligibility requirements for the two existing ‘fresh-start' arrangements, there follows an explanation of the subjective requirements that the applicant debtor must meet (good faith objectively determined by law). The article concludes with an examination of the differences between the two second-chance channels (meeting the requirement for a minimum debt threshold in the bankruptcy settlement or agreeing to be subject to the repayment plan), and their effects on creditors' loans in those cases where this status is revoked or consolidated in the five years following the decision.