In these uncertain times, many businesses in Spain face the possibility of insolvency, a situation that is always daunting. At CostaLuz Lawyers, we offer full support for businesses in or about to enter financial difficulties.
Our aim is to make the proceedings run as smoothly as possible and as always, provide you and your company with full support should you need to declare bankruptcy in Spain.
As well as helping you throughout the bankruptcy process, we ensure your business is as well protected as possible. We also make sure your personal assets remain unaffected by proceedings.
We also offer services designed to help you with debt problems so that these are alleviated and you no longer have to declare your business insolvent.
What is the Legislation for bankruptcy in Spain?
Insolvency proceedings in Spain (known as concurso de acreedores) are regulated by the 2003 Bankruptcy Law, designed to simplify the process and alleviate financial difficulties.
The law puts the onus on business owners to be proactive and declare current or imminent bankruptcy before creditors start debt-collection proceedings.
In exchange for this requirement, the law frees company administrators from the obligation to pay off debt with their own assets. This is particularly important for businesses owned by companies in Spain.
What are the requirements of the bankruptcy law in Spain?
The law is effective only for individuals and companies who formally request bankruptcy proceedings to start. They must make this request within two calendar months of knowing that they are either about to become insolvent or will be in the near future.
As we said earlier, this puts the onus firmly on the business owner. However, as we explain below, this is the best option and has the fewest ill effects on your business.
What happens if I fail to request bankruptcy in Spain?
If you or your company does not formally ask for insolvency proceedings to start, the chances are that one of your creditors will initiate the process. This has serious consequences for you and your company because a court may declare you of causing or worsening bankruptcy.
In the case of a company, the effects can be particularly serious because the entity will be deemed guilty of the insolvency.
This means that when the company is liquidated (or wound up), its assets do not satisfy payment of its debts then the administrators (i.e. you) could be forced to pay them off with their own assets.
Help is at hand
If your company is entering insolvency or you feel that this scenario is on the horizon, contact us immediately. We offer a free consultation of your case to ascertain how best to help you at this difficult time.
Our expertise in this field allows us to weigh up different scenarios and plan the best course of action for you and your company with the ultimate aim of avoiding personal responsibility.
Did you know? We also offer help with getting a second chance after bankruptcy in Spain.
This is known as a segunda oportunidad and ensures that insolvency proceedings do not affect you and your future business concerns. You can find out more about the legislation regarding second chances here. Link to other services page.
What is Pre-bankruptcy in Spain?
Spanish law also allows for a period of grace (known as preconcurso de acreedores) for companies in financial difficulties. This stage is designed as preventative or preparatory action to stop your company from reaching actual bankruptcy.
If this turns out not to be possible and you do enter insolvency, courts look very favourably on businesses that have first used the preconcurso.
The period of grace starts when you notify the authorities that you’re finding it difficult to meet your financial obligations. It has three main advantages:
- It protects your company from certain actions by creditors.
- It allows or facilities the restructuring of your company debt.
- If negotiations and restructuring fail, the preconcurso shows you acted in good faith and did what you could to avoid entering bankruptcy in Spain.
What help is available for business debt in Spain?
Businesses who choose to take the preconcurso route benefit from our range of services designed to help you plan ahead and ultimately avoid bankruptcy. We look at several areas in your company with the aim of putting it back on the right financial track.
Business viability studies – these examine your company and its products and/or service offerings. We then offer alternative business strategies for the future, designed to avoid or alleviate bankruptcy.
Restructuring assets – this is one of the best ways of dealing with possible bankruptcy in Spain. We look at your company’s active and passive assets and recommend ways of restructuring these to allow you, in turn, to satisfy your current debts and/or avoid future insolvency.
Bank negotiations – getting new or different credit terms with your current providers or exploring new options can avoid bankruptcy. Using our experience with financial entities and banks in Spain, we negotiate the best options for your business.
Preventative actions – our fourth pillar looks at ways your company can avoid insolvency or prevent from happening now and in the future.
Our specialist team uses its expertise to help you and your business in difficult financial times. Get in touch to find out how we can help you avoid or alleviate bankruptcy in Spain.
Read more: Business Debts and Debt Recovery
What do you charge for help with bankruptcy?
As always, at CostaLuz Lawyers, our aim is to help you and your business as much as possible. Our services explain the proceedings under Spanish law in clear layman terms so that you understand all the implications.
Our objective is to find the best solution for your company and our fees reflect this.
We adjust our charges to your particular circumstances and business type. We fully understand the real challenges of insolvency, which are heightened when you’re in a foreign country. All our clients find our fees to be more than reasonable as, we trust, you will too.
Contact us for a quote for our services to help you and your company.