A judge exempts a bankrupt from their debts by applying the Second Chance Law

The Commercial Court number 10 of Barcelona has exempted a bankrupt from its debts by applying the Second Opportunity Law , once the affected party had paid up to 28% of its ordinary credits.

The order, to which Good Finance has had access, indicates that the bankruptcy administration requested an end to the bankruptcy of the affected party for having sold all its assets.

Disposal of assets involved the payment of loans against the estate

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It also indicates that the disposal of assets involved the payment of loans against the estate, privileged loans and 28% of ordinary loans, which is why it was eligible for the Second Opportunity Law.

The bankruptcy administration also noted that the affected person’s behavior had been “faultless”, “strictly” complying with all the requirements. In addition, he noted that in this process there were no viable reintegration actions or liability actions to third parties and that the bankruptcy proceedings on the cause of the case had been “fortuitous”.

Over-indebtedness 

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In this regard, the order recalls that the bankrupt claimed that the main cause of his insolvency was “over-indebtedness caused by no fault of his own”. “The liability of the contest, mostly financial in nature, has its origin in the reduced income of the bankrupt and his wife, which could not cope with the payment of debts generated by this over-indebtedness,” he says.

As a result of the indebtedness, “the bankrupt and his wife, with their committed assets, have lost the same, leaving only their retirement pensions as income”.

For all these reasons, the magistrate understands that this case responds to a “passive over-indebtedness”, in which the consumer acts responsibly, “but is overwhelmed by unexpected and unpredictable contingencies having acted in good faith, so that the legal system cannot penalize those who have requested their amparo through the mechanism of the bankruptcy proceedings ”.

Benefit of debt exemption

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For these reasons, it orders the end of the contest for liquidation and grants the bankrupt the benefit of debt exemption under the conditions set forth in article 178 bis of the Bankruptcy Law.

Even in Hammurabi Babylon, general annulments of the debts of its citizens were proclaimed. What has been called the Hammurabi Code, was probably written in 1762 before JC. Its epilogue proclaimed that “ the powerful cannot oppress the weak, justice must protect the widow and the orphan (…) in order to do justice to the oppressed .

” Thanks to the deciphering of the numerous documents written in cuneiform, historians have found the incontestable imprint of four general cancellations of debt during the reign of Hammurabi (in 1792.1780, 1771 and 1762 before JC).

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