Experts

All about the second chance law for self-employed workers

The Second Chance Law is vital for the self-employed, allowing them to start over, renegotiating their debts. But how do we apply this law? Should work activity stop when you are in the process? Gerard Salcedo, lawyer and chief operating officer, answers all the frequently asked questions on this topic.
Gerard Salcedo
Lawyer and Chief Operating Officer
5 min

Course transcript

What is the Second Chance Law

The Second Chance Law is a legal mechanism that allows debtors to exonerate their debts after complying with a series of legal requirements and procedures. It focuses on facilitating the renegotiation of debts for the self-employed and microenterprises.

Procedure for Self-Employed Workers

As of January 1, 2023, freelancers and independent professionals can try to renegotiate their debts. Should this negotiation fail, they can request the exemption of their debts through the court.

Who can take advantage

Self-employed persons, consumers, independent professionals, and entrepreneurs in a situation of current or imminent insolvency who are unable to meet their obligations are eligible.

Requirements to comply with the law

The main requirements are:

  • Be in current or imminent insolvency
  • Have no criminal record for property crimes
  • Do not have serious administrative penalties.
  • Not having participated in a similar process in the last 5 years.
  • Not be in the process of bankruptcy.

Benefits for the self-employed

Self-employed workers can have their debts exonerated, allowing them to start over without the financial limitations of an unrepayable debt.

Exoneration from public debt

Of debts to the Treasury or Social Security, the first €5,000 is completely exempted. Of the rest, 50% up to a limit of €10,000. For example, a debt of €20,000 would be reduced to a partial exemption and only part of it would remain.

Continuation of professional activity

Self-employed workers can continue their professional activity during the procedure and, if they meet the requirements, they will see their debts exonerated without the need to cease their activity.

Acceptance of the legal process

The law requires the intervention of a lawyer and a prosecutor to start the process. Depending on the debtor's financial circumstances, a bankruptcy trustee may also be required. The fees of these professionals can be paid in installments.

Duration of the procedure

The duration varies between 6 months and 2 years, depending on the debtor's situation. If the debtor has no assets, the The process usually lasts approximately 4 to 6 months.

Final result and deletion from delinquency records

After completing the procedure, the debtor may exonerate himself from his debts and, if he is in a register of delinquency, exercise your right to delete this data to start from scratch without financial limitations.