“The first case of cancellation of debt with the Second Chance Act in a court of 1st instance of Spain Judge Javier León Mata of the Court of First Instance No. 4 of Badalona has issued the order 14/2017 by which is exempted of 27,000 euros for the first time in Catalonia to a person in situation of over indebtedness through the Law of the Second Chance, approved in July 2015.
Manel Fores, Legal Legal Director of Repara tu Deuda, explains the case: “AC, 55, engaged in a separation of assets and with a child, charged 1,480 euros per month and his creditors claimed approximately 50% of his salary”. Faced with this critical situation, he was over-indebted to be able to pay off his credits until there came a time when he could not face it and stopped paying. The creditors were BBVA, Banco Cetelem, Carrefour, FGA Capital Spain EFC, TIT Finance and Banco Santander.
Pol Andreu, lawyer and head of the legal department of Repara tu Deuda, points out that the present Order allows studying and analyzing the legal reasoning used by the Judge to substantiate the concurrence of the necessary requirements to agree on the exemption of the dissatisfied liability. “In this particular case, we are faced with a debtor in good faith, which also implies compliance with one of the legal requirements to be able to benefit from the exemption of the dissatisfied liability, one of the axioms that lead our legal system and whose concurrence, in cases like Mr. Casado’s, may be more than relevant to be able to resolve the exoneration on a pro forma basis “.
“Therefore, we must consider this Order as the first Judicial Resolution and, therefore, of interest and public access, which may be taken into account by other Courts and other legal professionals, and which, through its own casuistry and judicial practice, will allow create precedent and even generate jurisprudence “.
With his monthly salary as the sole asset, the client went to Repair Your Debt, a pioneer credit repair in Spain, in January 2016. “He had fixed expenses of 1,300 euros per month, leaving almost nothing to live on,” explains Fores. Repair your Debt attended him and offered all the service for 950 euros, to pay in 10 monthly payments. “First I went to four law firms – explains AC – that just to assist me they asked me for a provision of funds between 2,000 and 4,000 euros, also requesting total amounts for the procedure between 6,000 to 8,000 euros, so I can say that repairs your Debt has changed my life and given me the opportunity to start from scratch. “
It is the first case that a First Instance Court resolves in Spain through the Second Chance Act. Repair your Debt is the first credit repair firm through the Second Chance Act in Spain and currently has more than 800 cases pending resolution. “To this day, 100% of the files that we have managed have been successfully completed and given the typology of our clients -with little or no economic capacity- we believe that judges will end up forgiving the debt to all our clients”, says Manel Fores.
“The courts of first instance are demonstrating their competence with respect to the merchants even if they are not familiar with mercantile issues or related to the law of the second opportunity,” stand out from Repara tu Deuda. The non-entrepreneurial natural persons attend the courts of first instance and civil matters such as abuse, divorce, etc. are dealt with. “In just over a year, most of these courts have been updated with this new law and are undoubtedly proving their effectiveness as confirmed by the case of Badalona, which has favorably resolved the first case in Spain.”
According to the repairer, based in Sabadell and present throughout Spain through franchises, is a procedure that could be welcomed by many people but ignorance makes it a tool still little used. In Spain, the number of competitions presented is around 1,400, compared to more than 100,000 per year that are processed in France or Germany.
Repair your Debt helps people who are in extreme situations to start from scratch. Although there is still a long way to go, since the approval of the Law, more than 150 cases have been resolved in Spain.