Companies and the self-employed in a bankruptcy situation can take advantage of an express bankruptcy, now known as bankruptcy without mass, and settle their debts in two months. It is not surprising that, over the years, these types of contests have grown. Already in 2022 they experienced a 20% rise compared to 2021, according to the Registry of Forensic Economists (Refor) of the General Council of Economists of Spain.
To this day, since the reform of the Bankruptcy Law was introduced, the figure has dropped, but the express bankruptcy or without mass continues to be the appropriate way for companies that have been insolvent for a while and want their debts to disappear “with a stroke of the pen”.
The contest without mass is the procedure that replaces, from September 2022, the express contest. It is available to any type of company, whether self-employed or a company, that is in a situation of insolvency and cannot meet its payment obligations, which may lead to its closure. It is especially interesting because of its speed: while the most “traditional” contests can last between one and three years, the contest without mass lasts between one and three months, since this type of procedure is characterized by its speed and simplicity.
For their part, in bankruptcy without mass, creditors recover a significant part of what the self-employed owe them, and the latter can emerge from the insolvency situation. But if there is something that stands out, it is that the costs associated with these procedures are significantly lower than those of an ordinary bankruptcy.
When a company is in a situation of current or imminent insolvency, it is their duty to declare a bankruptcy within two months. Failure to do so could result in the administrators being held personally liable for the company’s debts and facing legal action (called a Bypass of Liability). For this reason, when a company goes bankrupt, the bankruptcy must be requested. In this case, it is best to always do it by express way.
Since the reform of the Bankruptcy Law, which entered into force on September 26, 2022, the express bankruptcy no longer exists and has become known as bankruptcy without mass. This figure is designed so that small businesses that have ceased their activity due to lack of income can settle their debts in the shortest possible time but, unlike what happened with the Express Contest, creditors have greater control and can request the appointment of a bankruptcy administrator to assess the possible liability of the employer, as indicated in articles 37 et seq. of the reform of the Bankruptcy Law. They can also decide if the case meets the requirements to be processed as express or should be done by conventional means.
The success of the bankruptcy without mass lies, therefore, in that it is processed as such, since, if it is considered that it does not meet the requirements, it will be considered a conventional bankruptcy, whose duration can be between one and three years. That is why the bankrupt is always recommended to request the bankruptcy without mass advised by a lawyer.
To request a bankruptcy procedure without mass, a series of requirements must be met. If they are fulfilled, the self-employed person or businessman will be able to settle his debts in two months thanks to this contest.
The requirements are:
If all these requirements are met, you can proceed to submit the application.
To qualify for bankruptcy without mass, it will be necessary to present a series of documents:
Once the declaration of bankruptcy has been filed, if the insolvency is verified and it is confirmed that the bankrupt does not have sufficient assets or rights to cover the cost of the procedure, the judge will declare the bankruptcy. Thus, if the requirements are met, the company can disappear “with a stroke of the pen”, or within a period of two months.
