The recent development surrounding the Second Chance Act has triggered a dramatic surge in demand across Alicante and beyond. Courts are grappling with a rising number of individuals seeking debt relief, facing the stark choice between relief from debt and the looming risk of ongoing embargoes. The growing volume of cases is clear, and it has not been matched by a compatible response from all quarters, leaving some debtors waiting for a resolution that may never come.
In the first three quarters of 2023, the trend became evident across many states. There were 1,169 cases filed in which private individuals pursued non-commercial debt forgiveness. This figure, when compared with the same period the year before, signals a substantial increase and reflects data from the General Assembly of the Judiciary.
Some observers note that this rise has pushed the private bankruptcy workload to new highs. Within the Commercial Courts of the region, the increase is noticeable, while corporate filings show a different pattern with a notable reduction in certain categories. The number of corporate cases fell from 394 to 178 over the same span, highlighting a shift in how different types of debt are addressed under the law.
Second opportunity worth 3.4 million euros for a businesswoman from Alicante
Even though individuals have long had the chance to benefit from a suspension of payments since 2015, the most recent amendments to the Bankruptcy Law have produced an unprecedented rise in cases. The reform introduces a streamlined transaction path for cases where the debtor lacks assets to satisfy the debts, making prolonged administration impractical. This is the express competition procedure, designed for doughless competitions where assets do not meet obligations.
Requirements
In these situations, the debtor must show good faith, no prior enforcement history, and no previous use of the procedure. If a creditor does not file a request within 15 days of the bankruptcy declaration being published in the Official State Gazette, a new exemption comes into play. This exemption allows relief without appointing a bankruptcy administrator in many instances, resulting in debt forgiveness for most affected parties.
Archive image of the computer installation before starting in one of the Commercial Courts of Alicante.
This simplified approach has drawn attention from both victims of scams and law firms that market similar services. Economists emphasize the risk that some firms may take advantage of the situation by offering aggressive legal help, while many people who have faced long-standing financial difficulties see a path to relief. The history of debt in past decades shows how a mortgage default could leave a person indebted for life even after the property was taken.
Currently, more than half of insolvency proceedings in Alicante originate from individuals
The applicant pool is increasingly diverse, including many people with outstanding debts, rotating cards, investors who lost money in cryptocurrencies, and self-employed individuals who rely on personal assets. The surge in filings has overwhelmed the courts, prompting authorities to seek alternatives to preserve the Second Chance Act’s effectiveness. One option under consideration is a pilot program in Alicante that would begin accepting applications through automated processes assisted by artificial intelligence to streamline parts of the procedure.
Recent cases highlighted by the Repara tu Deuda office reveal notable outcomes under the Second Chance Law. In one example from the 6th First Instance Court of Alicante, a woman received relief from debt amounting to approximately 35,000 euros. The debt originated from loans taken by the deceased mother, transferred to the daughter after the parent’s death. Facing mounting payments, the debtor sought ordinary bankruptcy and then requested the discharge of unfulfilled obligations through the court. These contexts illustrate how the exoneration mechanism can function in practice.
Ultimately, the Second Chance mechanism offers a potential reprieve for many workers and families who previously faced limited options. As the Alicante courts adapt to rising demand, the emphasis remains on compassionate, clear paths for debt relief while maintaining safeguards to protect creditors and avoid abuse, as explained by legal experts.