Do you require the services of a bankruptcy lawyer? You can rest assured that the expertise of our team of dedicated lawyers will meet all your needs, ensuring that every option is taken into account in order to provide you with the best possible solution for your case.
Counting on the advice of an expert bankruptcy solicitor and the assistance of an experienced team of professionals is essential in order to find the most adequate solution and attain the best possible results. These are delicate situations that require expert knowledge and experience, which is why our team of specialised lawyers is at your complete disposal.
Do not hesitate to contact our firm of bankruptcy lawyers and insolvency mediators via our website or the other communication channels available to you.
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Professional lawyers for bankruptcy and insolvency services
Our team of bankruptcy and insolvency lawyers offer a wide range of professional services, with the aim of providing our clients with a specific solution for any issue you need to resolve.
In order to understand exactly how our experts can help you, we invite you to learn more about the comprehensive services we offer.
Our lawyers will provide you with specialist advice on bankruptcy proceedings; pre-insolvency and insolvency situations; negotiation with creditors and debtors, and restructuring, or refinancing, of debts. All of these cases can present scenarios that are extremely delicate and complicated to solve, therefore counting on the help of a professional attorney is undoubtedly the best way to ensure you find the best solution.
Bankruptcy Proceedings
Bankruptcy proceedings are a judicial process with the objective of mitigating the impact on both the creditors and the debtor, enabling those in a situation of insolvency to face their debts with creditors, always within their possibilities.
Such procedures can be initiated for and by individuals, companies, or anyone who holds claims against an insolvent debtor; cases in which the collection of the totality of the outstanding debt is simply impossible.
Taking the above into account, this is a legal process that aims to offer different payment alternatives so as to to permit the continuity of the debtor’s economic activity, and thus achieve continuity of payment; a partial but equal payment solution for all debtors and, in the worst case scenario, the liquidation of the debtor’s assets in order to recover the debt owed.
Therefore, if you find yourself in this situation, it is essential to seek the services of a specialist bankruptcy lawyer.
Pre-insolvency restructuring and insolvency
Over the course of time, our law firm has built up a reputation for excellence in bankruptcy cases and insolvency proceedings.
From the debtor’s perspective, we will be able to perform an analysis of the business environment and provide the most effective solutions to overcome the financial crisis, as well as business risk strategies. We manage the implementation of restructuring plans, using judicial and extrajudicial procedures, as well as advising on the sale of assets or production lines.
From the creditor’s point of view, we will be able to create collection strategies, and provide counsel on the defence of claims and credit ranking in the event of insolvency situations. We can take care of the execution of shares or stocks, as well as the negotiation with the insolvency administration in order to improve the return and recoverability of claims.
Negotiation between creditors and debtors
Once the situation has become complicated and payment defaults occur due to lack of liquidity, it is crucial to negotiate. Agreements can be reached with creditors and banks. In the case of large companies, negotiation with financial institutions is the most common course of action, and refinancing agreements are usually reached.
On many occasions, the problem is that the debts of small and medium-sized companies are not usually with financial institutions, but with workers, suppliers and the Administration. In the latter case, there is no possibility of negotiation; the only option is to try to reach an agreement on deferrals with the Social Security and the Treasury. It is also advisable to try to reach private agreements. The most typical plan of action is to negotiate a refinancing plan with suppliers.
Refinancing / Restructuring
The first thing to clarify is that a refinancing agreement is a settlement reached between debtors and creditors, in which an extension of credit can be agreed; or a modification or termination of obligations can be made by extending the term or establishing other obligations, although it must always respond to a viability plan that allows the continuity of the activity.
There are a number of benefits and prerequisites for requesting a refinancing agreement, starting with the fact that both companies and individuals who are in a situation of current or imminent insolvency can benefit.
In the case of individuals, the value of the liabilities must not exceed €5 million and in the case of legal entities, the value of the liabilities must not exceed €5 million, or they must have fewer than 50 creditors; provided they can prove that they have sufficient assets to be able to cover the processing costs.
Second Chance Law
When we talk about the Second Chance Law, it must be made clear that we are referring to the second chance mechanism, which is a legal resource that offers self-employed workers and individuals the opportunity to totally or partially eliminate, or renegotiate debts that they are currently unable to pay.
By means of the Second Chance Law, it is possible to overcome a situation of financial distress that has been caused by over-indebtedness, without neglecting the collection rights of the different creditors.
As explained previously, by means of the second chance mechanism, the aim is to rescue those who are unable to pay their debts from a critical situation. The Second Chance Law and the Bankruptcy Law are inspired by ethical principles with the objective of guaranteeing, to the extent possible, debt collection for creditors.
Expert advice in cases of bankruptcy, insolvency and restructuring of debt
Legal advice for debtors
As a law firm that specialises in the Second Chance Law, we help our clients to get out of debts that prevent them from moving forward. Many people seek this type of solution in order to resolve bankruptcy situations.
However, it should be borne in mind that only a small proportion of all these cases end up in court, as the matter is usually settled out of court, or in other cases, because the defaulter does not meet the conditions to qualify under the law. Before going to court, the process begins extrajudicially, by trying to reach an agreement with the creditors in order to establish a payment plan. These are handled by specialised law firms, such as ours. When this is not achieved, an insolvency proceeding is started and the debtor's assets are liquidated in order to be able to pay the creditors the maximum amount of money possible.
Legal advice for creditors
Since the Second Chance Law came into force, individuals, above all, have at their disposal a specific legal procedure through which they can obtain a discharge of their debts. It is a procedure with a two-stage structure, the first being the extrajudicial mediation, and the second, consecutive bankruptcy proceedings.
The main legal grounds for enabling this procedure is the need to allow the debtor to negotiate with their creditors in terms of viability, which means that the corresponding payment agreements have been reached, in accord with the economic situation. In the event that an agreement cannot be reached, the second phase allows the debts to be discharged by means of the liquidation of assets.
Frequently asked questions about bankruptcy and insolvency
What is a bankruptcy lawyer and what can they do for you?
A bankruptcy lawyer is a professional who is responsible for expediting all negotiations in the event of a debtors’ insolvency. This type of professional has the capacity to intervene in proceedings when the second chance mechanism is activated. They can take charge of communicating proposals and bringing positions closer together, which can be extremely beneficial when reaching an agreement.
The Second Chance Law has reinforced the role of the bankruptcy mediator, as the professionals responsible for facilitating negotiations and working on guarantees of the same. It should be borne in mind that the appointment of the insolvency mediator is proposed by the Notary, in order for the procedure to be carried out.
When is a company declared bankrupt?
Bankruptcy proceedings are governed by the Royal Legislative Decree 1/2020 of May 5, which approves the revised text of the Insolvency Act. This stipulates that any company that finds itself in a state of insolvency has the capacity to declare bankruptcy proceedings.
This means that the debtor is unable to fulfil their payment obligations towards their creditors, and this procedure is intended to enable them to do so.
An important detail to bear in mind is that insolvency can occur in two different cases:
- Current insolvency: when an individual or company can no longer meet their financial obligations when they fall due, the debt can be claimed by the creditors.
- Imminent insolvency: when the financial statement shows a forecast that obligations cannot be met in the future.
Is it better to file for bankruptcy or restructure debt?
When an insolvency situation arises, the simplest solution may be to refinance the debts with a bank, although it is important to determine at what price. Refinancing by banks usually imply reaching an agreement to defer the debt, applying fees and interest that end up making the operation more expensive.
Generally speaking, in limited liability companies, the partners contribute capital, or commit to do so. Unless personal guarantees have been provided in favour of the company, the liability for debts is limited to these amounts.
When a company has financial problems, it will typically try to negotiate a refinancing or restructuring agreement with its creditors. Refinancing agreements with creditors can, in principle, lead to a better solution than having to file for bankruptcy proceedings.
Can a situation of insolvency be resolved without resorting to bankruptcy proceedings?
One of the main problems for a company in a state of insolvency is the lack of financing or insufficient funding. The Spanish legal system includes a series of instruments developed in order to provide a better structure to negotiations with creditors, allowing a restructuring of the debt and thus improving the chance to ensure the viability of the company and the preservation of jobs.
There are currently sufficient legal procedures focused on corporate insolvency which can prove to be effective, provided they are applied in time. It should be kept in mind that delaying the implementation of these measures may mean that the company’s issues extend to including non-payment of wages, decline, abandonment of investments, etc., which can become even more problematic to resolve.