A sentence forgives a Canary Island her debt to the bank for a home
Justice has condoned a Tenerife businesswoman, specifically from La Laguna, her debt of 124,538 euros with two banks and a vulture fund in application of the Second Chance Law. It is the second sentence that is passed on the Island with the same sense so far in 2021 after which last February it allowed a chicharrero to cancel what he owed, a total of 113,859 euros. Ana Isabel García, a lawyer from the specialized firm Repara tu Deuda, which has handled the case, assesses: "The Courts of First Instance of Tenerife are working very well, effectively and quickly." It should be noted that in February it was one in Santa Cruz –number 10– and now another in San Cristóbal de La Laguna –in this case, 7–
The victim is a middle-aged woman, separated, who had a tobacconist and at the same time Lottery Administration. To set up the business and be granted the loan, he had the endorsement of his grandmother - now deceased - who contributed his home to the bank. At first everything was fine, but then the situation changed and she could not pay. PHe had another loan with the guarantee of his family to face the first but that meant getting into a loop of no return. The bank kept the house, and another in its name, but when it did not cover one hundred percent, it had to continue paying. Even in 2013 the entities proceeded to foreclosure including launch.
The sentence, says the lawyer, "now frees her from this unjust backpack that takes on an eternity tinge for the affected person." Also "many people are going to feel identified because they have gone through a similar casuistry." As if that were not enough, adds Ana Isabel, "one of the banks assigned part of the debt of one of the loans to a vulture fund that applied abusive interest to it."
Self-employed, salaried and ...
The lawyer values that "this person, who was autonomous and then a salaried worker before becoming unemployed, can start over from scratch and stop the seizures of accounts and properties." From Repara tu Deuda Lawyers recall that the woman came to them because she accumulated these debts and only had a monthly income of 1,000 euros in unemployment benefit. The judge has issued what is called the Benefit of Exoneration of Unsatisfied Liabilities (BEPI), Repara tu Deuda Abogados is the pioneer law firm in the Second Chance Law in Spain. Originating in Catalonia in 2015, it has spread throughout the country and has already managed to cancel more than 30 million euros of debt. Ana Isabel García summarizes: “With this there are already six debt cancellations in Tenerife and there are almost a thousand people about to get it. García establishes that "the average time of the process is one year and a half." He acknowledges again that "in the courts of Tenerife a lot has been gained in agility in the last year".
An order issued on February 3 by the Court of First Instance number 10 of Santa Cruz de Tenerife exonerates a self-employed islander from the payment of a debt of 113,859 euros also based on the Second Chance Law. In addition to condoning what is owed in the private sphere to 24 creditor banking and financial entities, a total of 112,254 euros, it is also forgiven what it owes to public administrations, in this case 1,605 euros. As in the first case, the person was self-employed and then salaried before becoming unemployed. He currently has income from unemployment benefits of 430 euros per month and has accumulated debt until he owes 24 banks ”. Now you can start over after the court dictates what is technically called BEPI.
Law 25/2015, of July 28, on a second chance mechanism, reduction of the financial burden and other social measures, popularly known as the Second Chance Law, aims to be an oxygen balloon for small businessmen and individuals who in this way they find a legal vehicle in case their entrepreneurial adventure has failed and they cannot cope with the debts incurred. García sums up: “Spain has followed the tail of the EU in applying the regulations. The issue is often of a cultural and customary nature ”.
The Second Chance Law It was designed in 2015 for individuals and self-employed professionals (self-employed) who have failed in their business adventure. Until that moment, only companies could request the exoneration of their debts. The entrepreneur / debtor must try to reach an out-of-court settlement with his creditors. In this process, supervised by a judge, you can liquidate your assets to pay the debts that you can pay or agree on a payment schedule. The law establishes some requirements to be eligible. Among them, the debtor proposes to his creditors a viability plan and that calendar with a term to pay that may not exceed ten years.
Ana Isabel García provides statistical data: “According to the INE, in the fourth quarter of 2011 there were 350 people in the Canary Islands in this situation. In the same period of 2020, there were already a thousand ”. This legislation allows individuals and freelancers to be exonerated from the payment of debt to creditors provided that it is shown that previously the debtor has acted in good faith, as well as attempted an agreement to postpone the debt. If this agreement is not reached, which happens in 99% of cases, they can request cancellation to the court. Debts don't go away forever. Any creditor may ask the judge to revoke the exoneration if, within five years after the admission of the second opportunity, he understands that his debtor has acted in bad faith or has obtained income in the underground economy. If the creditor requests the revocation of the debt forgiveness and the judge accepts it, the entrepreneur will no longer be subject to this law and will re-incur his debts.