The Second Chance Law in Spain as a shield against the Covid-19 Crisis

Due to the current circumstances, the Second Chance Law stands as one of the protective shields, which can cover individuals (not companies) who, in the face of the crisis that is approaching, see their business models at risk due to lack of liquidity, up to the point of making them unsustainable. This is a protective rule for the debtor and it’s based around the principle of good faith, which prevents those who, due to their negligence or intentionally, caused their insolvency, to avail themselves of it. The current health crisis caused by COVID-19 would leave practically all those affected economically by the pandemic under the umbrella of the Second Chance Law, and this because it is an event of unimaginable magnitudes, at every angle unpredictable and, in any case, inevitable by the subjects in the manner of a force majeure. The procedure established in the regulation begins with the out-of-court settlement of payments, the purpose of which is to reach an agreement with the creditors in relation to them, in order to, in the lack of this agreement, judicialize the process and thus try to obtain the exoneration of the unsatisfied liability.