Courts in the Alicante region recorded the largest quarterly volume of bankruptcy proceedings in its history. Yet the surge seems less driven by a deeper economic decline and more by a reform that tightened the so‑called express competitions after the new law took effect on September 26. This change has prompted many small business owners and individuals to pause and rethink their plans.
Experts interviewed for this report point to the latest figures from the General Assembly of the Judiciary, which show unusual activity in this sector, as soon as new data were released. Between July and September, state courts registered 283 new bankruptcy cases, a rise of 92% from the same period the previous year, setting a new Alicante record.
Unlike earlier quarters, the most notable growth occurred in special competitions, which are increasingly linked to the so‑called second chance law becoming better known. The rise is strongest in commercial courts, where filings by companies and freelancers increased. In 2021 there were 208 cases, compared with 75 in the same period this year. Non‑business individuals accounted for 75 cases, up from 68 last year.
A policy context note: Various experts point to the summer disclosures by Galsán Consultores and the broader legal environment. Corporations and debtors lacking assets to cover debts have dominated many filings, a pattern often seen in small businesses occupying rented premises or similar locations.
Until now, the law allowed such debtors to initiate a claim during the express competition window. The new law, which entered into force on September 26, eliminates that option and requires a 15‑day period before any creditor can request the appointment of a manager, delaying the typical process and potentially creating additional hurdles for debtors, according to Sebastián Crespo of Devesa & Calvo.
Alicante economists argue the new bankruptcy framework may help more companies endure
The reform has given many small firms and self‑employed individuals the chance to address their debts in court, with some choosing to file before the legislative change. This shift reflects a belief that there are now more tools to manage obligations without immediate collapse.
Shift in mindset
Experts agree that the rise in proceedings is not simply about dodging the new rules. Pedro Algarra notes that more businesspeople and individuals are no longer deterred by applying for protection. The idea of a bankruptcy process is no longer a taboo, and a change in mentality is evident. Those who once shielded personal assets or kept debts separate from the company may now find themselves in a bankruptcy scenario despite the company no longer existing. Rising energy costs have also prompted many firms to reassess their finances, increasing filings across various sectors.
In addition, the new regime makes it easier to shield habitual residences, offering another incentive to consider bankruptcy and the second chance framework. Previously, only corporations enjoyed such mechanisms; now individuals can file to settle debts with creditors while preserving essential living arrangements.
Of course, the reform also creates new dynamics in private bankruptcies. It simplifies the path to the so‑called liability exemption, removing the need to demonstrate good faith and submit a formal payment plan subject to creditor rejection. The new framework enables direct filing for bankruptcy and a straightforward route toward liquidation and relief from liability, notes Crespo, who has observed many companies preparing for these processes amid liquidity pressures and rising energy costs.
End of the moratorium and its impact
Alongside the changes in the law, the end of the pandemic moratorium is cited as another driver of rising bankruptcies. The dean of the Alicante College of Economists, Francisco Menargues, suggests that filings will continue to rise in the coming months, noting that insolvency statistics in Spain have historically been underutilized; many troubled firms delay liquidation rather than pursuing a formal process.
Concerns about a flood of bankruptcies
On the European scene, Spain records 47 competitions per 10,000 companies, while a broader perspective shows the amount of work handling bankruptcy matters tied to the Salary Guarantee Fund. Some analysts forecast a 15% increase in filings sooner rather than later, though Menargues cautions that many firms maintain solvency more than commonly assumed and that actual trends may differ from early projections.