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.
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.
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.
The main requirements are:
Self-employed workers can have their debts exonerated, allowing them to start over without the financial limitations of an unrepayable 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.
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.
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.
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.
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.
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