Bankruptcy filings in Alicante set a new quarterly record in the first three months of the year, but the surge wasn’t driven by the typical corporate cases. For the first time, private citizens filed more petitions than companies and freelancers, rising by nearly 35% over the previous year.
Experts link this uptick to a combination of lingering pandemic effects on local economies and the impact of the so-called Second Chance Law. This legislation allows individuals to clear their debts permanently, provided they can show genuine efforts to repay and that those efforts failed.
Provincial courts received more requests from January through March, according to the latest data from the General Assembly of the Supreme Court. There were 236 bankruptcy petitions, a 14% increase from the same period last year and the highest quarterly figure in the history of the statistic, which dates back to 2007.
The growth varied by applicant type. The rise was most pronounced among non-commercial natural persons—citizens seeking to extinguish debts and escape lifelong liability. In total, these filings reached 128, up 35% from the year before and more than double the figures seen in the same months of 2020 or 2019.
Fewer Companies
Citizen petitions surpassed those filed by companies, keeping the overall number of filings slightly lower for businesses than a year earlier. Legal entities filed 108 petitions, compared with 112 in the prior year. Distinctions also emerged as filings by freelancers rose, with 34 petitions versus 31 previously.
The trend is prompting commentary from industry leaders. David Devera, CEO and co-founder of Devesa & Calvo, a labor-law firm, notes that the increase in personal bankruptcy filings is linked to the economic strain caused by the pandemic, leaving many individuals unable to meet loan obligations.
Beyond the current moment, Francisco Menargues, dean of the Alicante Economists Association, observes that these numbers are supported by knowledge that Spanish law has allowed discharge provisions since 2015. Before that change, debtors faced lifelong obligation to repay unless the full amount was settled.
Another notable element is the ongoing rise in mediation efforts as a precursor to relief. The so-called Exemption from Unmet Liabilities (BEPI) has seen more activity in recent months, signaling greater awareness of debt relief avenues.
Campaigns from specialized law firms, particularly on mortgage-related clauses, have also amplified public understanding of the Second Chance Law. While commercial bankruptcy filings show a modest dip, government-backed moratoriums during the pandemic had delayed filings for many companies, shielding managers from criminal liability and stalling some procedures. As the economy and consumer confidence recover, most firms have improved their numbers, though there is concern about what may happen after summer if the moratorium ends, consumption slows, and operating costs rise due to inflation. For now, the overall climate remains calm, with little evidence of widespread bank-debt renegotiations.
Examples and personal debts highlight common scenarios. Francisco Menargues, in Alicante, identifies two frequent patterns behind these cases. One involves individuals who stood as guarantors for loans to help family members, or entrepreneurs who guaranteed their own business loans with personal assets. The second pattern involves excessive borrowing through consumer credit, especially revolving credit cards, where debt accumulates after a few decisions. Law firms have raised concerns about usurer-like terms in some credit products.
Last year, 325 residents of Alicante sought to have bankruptcy relief granted by the court, a 27% rise over the previous year. If current trends persist, this figure is expected to rise again in the coming period.
A case in Elda illustrates the real-world implications, with a marriage exempted from a debt of 100,600 euros, underscoring the practical reach of the Second Chance framework. As awareness grows, mediation and settlement discussions with creditors remain a key step before relief can be pursued, and many expect the pace of such negotiations to accelerate in the near term.
Overall, the data point to a broader shift in how debt relief is approached in the region. The combination of legal reassurance, public awareness, and evolving economic conditions is shaping a marketplace where personal bankruptcy filings are increasingly common, and the pathway to relief is becoming clearer for many residents. Sources and analyses are attributed to official regional statistics and industry experts in Alicante. [Source attribution provided by the General Assembly of the Supreme Court and local economic associations.]