Judge Francisco José Soriano Guzmán is among the speakers invited to the Mediterranean Professions Congress in Benidorm. The Alicante Bar Association and the Society of Community Economists will host a discussion roundtable exploring updates to the Second Chance Law and how it applies to individuals seeking to resolve old debts. Soriano Guzmán has been a long-standing figure in the Provincial Court of Alicante and a member of the European Union Trademark Court since 2004. He now presides over Commercial Court No. 19 in Madrid and has been vocal about how regulations favor public creditors over private sector debtors. He notes that the Second Chance Act, enacted in 2015, did not gain real traction until after 2020, when case numbers began to rise meaningfully. He questions why it took so long for practical impact to materialize and suggests that a key obstacle has been the tendency to seek out court-free settlements rather than pursuing formal bankruptcy proceedings.
The human story behind the law is clear: people who face overwhelming debt often need a credible path to recover and rebuild. The time lag in widespread adoption reflects a gradual shift from informal arrangements to a more structured legal framework that can genuinely reset financial obligations and allow a fresh start.
Are individuals actually reaching their goals under this framework? The pace of practical implementation has picked up slowly, and leaders in the judiciary and in business communities acknowledge the journey is still far from meeting the projected caseload.
What is the typical profile of applicants for this relief? Self-employed individuals, small business owners, and increasingly directors of companies entering insolvency who bear responsibility for creditors and tax obligations. In some cases, interpretation by provincial courts leads to different outcomes, with examples from Seville showing degrees of public debt relief not mirrored in Murcia. The European Court of Justice in Alicante has been asked to clarify these divergent interpretations.
What shortcomings have been identified in how the law has been implemented so far? The judge argues that the law does not fully restore those whose assets are exhausted, because public debt remains largely untouched. This leaves former debtors unable to engage in new economic activity and risks pushing them into the informal economy. In neighboring countries, liquidation can clear all debts, including public liabilities, which would constitute a true second chance. The commercial division of the Alicante Court has pushed the issue to the EU Court of Justice for a preliminary ruling to interpret rules related to public credit relief.
Have the changes introduced at the end of last year addressed these concerns? While legal amendments have been made, questions about interpretation persist among lawyers and judges, which the judge views as a warning sign.
Is it fair for the administration to maintain this privilege and restrict full write-offs of debts? The judge previously argued that even if all assets are liquidated, public credit retains a preferential status that does not disappear entirely, and the proper balance under European directives remains disputed. Exclusion, which is a key element of the bankruptcy directive, continues to be debated as a justified necessity.
What criteria must debtors meet to qualify for relief? The law requires a debtor to act in good faith, but the precise meaning of this term is not defined, and there are no explicit exemptions for certain crimes or serious tax offenses, or for reckless behavior.
A major concern concerns the habitual residence and whether it can be protected. Remedies offered by commercial courts vary, but there is a tendency to allow remaining assets to be retained if the debtor can keep up mortgage payments while liquidating other assets.
Do experts expect a rise in cases, and have resources kept pace? The belief is that numbers will grow as new commercial jurisdictions are established and more courts handle these matters.
What safeguards exist to prevent abuse and can professionals exploit the system to leave debts unsettled? Some borrowers may fall under specific exceptions within the law and could be barred from reappearing in the system for a period of two to five years if prior relief was granted. The recommendation remains to seek experienced guidance to ensure a legitimate fresh start, enabling a real restart in business and economic life. (Citation: Alicante Court discussions and EU Court of Justice inquiries)