⚖️ What Is Bankruptcy in Spain?
Bankruptcy in Spain is legally referred to as “concurso de acreedores” and applies to both individuals and businesses that can no longer meet their financial obligations.
There are two main types:
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🔹 Voluntary bankruptcy – initiated by the debtor
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🔹 Involuntary bankruptcy – initiated by creditors or court
Spain’s Insolvency Law governs all bankruptcy matters and aims to protect creditors, restructure debt, and facilitate recovery or liquidation.
🧭 When to Declare Bankruptcy in Spain
You should initiate bankruptcy if:
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💳 You’ve missed payments and can’t meet obligations
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📉 Your business is experiencing sustained losses
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🧾 You’ve defaulted on loans, taxes, or supplier invoices
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🛑 A court or creditor has demanded insolvency proceedings
Failing to file within the legal time frame may result in personal liability for directors or managers.
🔍 The Bankruptcy Procedure: Step-by-Step
1️⃣ Pre-Insolvency / Warning Period
Before filing, debtors may initiate a pre-insolvency communication (preconcurso) to inform the court of imminent insolvency. This:
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Grants 3 months to negotiate with creditors
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Halts certain enforcement actions
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Offers a chance to avoid full bankruptcy
2️⃣ Filing for Bankruptcy
The application must be submitted to the Commercial Court and include:
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Balance sheets and financial statements
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List of assets, debts, and creditors
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Contracts and company records
We assist in preparing and submitting the full legal dossier.
3️⃣ Court Admission & Insolvency Declaration
Once the court reviews the documents, it will:
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Declare insolvency
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Appoint an insolvency administrator (administrador concursal)
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Suspend certain payments and actions
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Notify all creditors
4️⃣ Creditors’ Claims
Creditors must submit their claims within one month of the public notice. The administrator:
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Verifies and classifies claims
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May challenge unlawful or fraudulent debts
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Begins evaluating the company’s assets
5️⃣ Restructuring vs Liquidation
🔄 Restructuring Plan
If recovery is possible, a restructuring plan is created to:
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Renegotiate terms
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Reduce or suspend payments
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Allow business continuity
💥 Liquidation Process
If recovery is not viable, liquidation begins:
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Assets are sold
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Proceeds are distributed to creditors
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The company is closed and removed from the registry
6️⃣ Discharge of Debts (For Individuals)
Under Spain’s Second Chance Mechanism (Ley de Segunda Oportunidad):
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Individuals may be discharged from remaining debt
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Conditions apply: good faith, no fraud, limited thresholds
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Full debt relief possible after liquidation or structured payment plan
👤 Who Needs Bankruptcy Legal Help?
✅ Business Owners
We guide companies through complex commercial insolvency, helping with:
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Court filings and representation
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Negotiating restructuring plans
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Defending director liability claims
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Managing labor or tax debts
✅ Individuals & Sole Traders
We assist self-employed professionals and consumers with:
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Filing for personal bankruptcy
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Accessing second-chance discharge
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Protection from aggressive creditors
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Court defense during enforcement
🛡 Why Choose Borderless Lawyers?
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📘 Experts in Spanish & EU bankruptcy law
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⚖ Full support from court filing to resolution
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🌍 Multilingual service for international clients
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💡 Strategic focus on restructuring & risk management
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✅ Transparent flat fees & ongoing updates
We operate throughout Spain, including Madrid, Barcelona, Valencia, Malaga, and beyond.
📞 Speak With a Bankruptcy Lawyer Today
Navigating bankruptcy can be overwhelming—but with the right legal partner, you can protect your rights and reset your financial future.