The Barcelona judiciary wants to put a stop to the picaresque in the contests of private creditors who go to court to obtain the forgiveness of debts.
Since the reform of the bankruptcy law entered into force in September 2022, the procedure has been simplified and the courts have received an avalanche of requests driven by companies that have announced with great fanfare the ease of obtaining the exoneration of debts. “We estimate that a quarter of the debtors do not have the right to obtain forgiveness because they actually have the ability to satisfy the liability”, comments magistrate Ignacio Fernández de Senespleda, head of commercial court number 10. Another quarter of the debtors, he assures, “they are over-indebted people who have financial capacity but no savings culture”, while “half of the debtors are individuals in a precarious situation who are suffering the effects of the financial crisis”. In view of this panorama, the twelve commercial courts of Barcelona have agreed to increase control. “We’re looking to increase the transparency of the process and avoid piracy,” says magistrate José María Fernández Seijo, head of commercial court number 11.
According to the agreement on the unification of criteria (published in mid-December), the courts consider the salary as active mass of the competition as long as the amount exceeds the minimum interprofessional salary, can cover the costs of the competition and satisfy the basic needs of the debtor The amount will vary depending on each case, but as a guideline it is 1,800 euros per month. In any case, the key will be to prove that the debtor can withstand a “reasonable effort” to repay the debts. If this is the case, the bankruptcy will be declared with active mass, a bankruptcy administrator will be appointed (who will supervise the process) and a payment plan will be agreed which will oblige the debtor to return all or part of the debt within a period of three or five years
The Barcelona judiciary – which has been a pioneer in other bankruptcy matters such as the creation of the prepack process to speed up the sale of the production unit – wants to make the population aware that everything is not enough when it comes to requesting forgiveness of the debt The lawyer Josep Pujolràs, from the RocaJunyent law firm, considers that “the criteria are adequate to bring the law closer to reality and to properly base judicial decisions and avoid practices that harm creditors”.
Cristian Valcárcel, from the RCD firm, says that “the intention is good to avoid abuse” but that “we need to see the effectiveness of the criteria and the real amount that will be returned to creditors”. It also indicates that “the fact that administrators are appointed in these contests could further collapse the courts because the processes will be slower.”
In addition to the salary issue, the Barcelona court has also agreed to require the debtor to have an official appraisal of the value of his properties if he has them. The deed and any other valuation by a valuation entity approved by the Bank of Spain will do. “This will avoid less rigorous assessments, such as those obtained for free via the internet”, comments Valcárcel.
The agreements also include the creation of a single form for tenders without mass which aims to simplify the work of the courts. Judicial sources admit that they are overwhelmed. “In 2023, each commercial court handled an average of around 800 tenders, which means a workload three times higher than expected. 75% were natural persons”, they note.
