Bankruptcy Procedures in Spain
Bankruptcy Procedures in SpainUpdated on Monday 18th April 2016
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Businesses in Spain that encounter various financial problems can initiate the bankruptcy procedures as means of dealing with those issues. Although the country has a relatively low bankruptcy rate, compared to other European countries, Spanish companies also have alternative methods to deal with debt, before filing for bankruptcy.
Our law firm in Spain can offer you solutions and advice for any financial or debt issues you might encounter while running a business in the country. When dealing with foreclosure or liquidation, company owners can rely on the help and expertise of a lawyer who can negotiate with the creditors and handle all the debt collection procedures.
When do Spanish companies need to file for bankruptcy?
Spanish companies may be declared bankrupt if they are no longer able to fulfil their obligations towards their creditors, if they fail to pay loans or their business partners or fulfil other types of financial obligations. Individuals can also be declared bankrupt and this is applicable in case of small business types, like the sole proprietorship where the assets of the individual are the same as the company’s.
There are two types of bankruptcy in Spain:
- voluntarily: when the debtor files for bankruptcy himself;
- mandatory: when the creditor or other parties file for bankruptcy.
The company in debt must file for bankruptcy within two months after it became insolvent. One of our lawyers in Spain can help you with either one of these procedures.
What is the bankruptcy procedure in Spain?
The bankruptcy procedure starts by filing a petition with the Commercial Court (also referred to as the Mercantile Court) belonging to the company’s registered address. The petition is filed in writing and it is accompanied by other relevant documents. The company must observe the two month time-frame for filing for insolvency but there is no time limit for creditors or shareholders who want to file this petition, provided that there are reasonable motives to file such a claim against the company.
Our lawyers can also help you if you are a Spanish business owner that acted as the creditor for a company and need to secure any unpaid or outstanding debts.
Contact our law firm in Spain if you need any more information regarding foreclosure and the laws for insolvency and bankruptcy in Spain.