End of the suspension of the obligation to file for insolvency in Spain

On 30 June 2022, the suspension of the insolvency filing requirement in Spain, which was introduced under the COVID-19 pandemic by Royal Decree-Law 8/2020 of 17 March and subsequently extended, ended.

Insolvent debtors were exempted from the obligation to file for insolvency by the special regulation. This was to prevent non-compliance with the 2-month filing deadline from leading to the insolvency being classified as culpable, which could, for example, lead to liability on the part of the directors.

Upon the occurrence of the end of the suspension for the obligation to file for insolvency, the statutory obligation of the insolvency debtor to file for insolvency within a period of 2 months, calculated from the day on which he knows or should have known of his current insolvency, now revives.

If the debtor fails to comply with this insolvency filing obligation within the time limit, the insolvency may be classified as culpable. This may entail full liability with the private assets for all liabilities that have not been fully satisfied from the insolvency estate.

Also, applications by third parties authorised to file applications, such as creditors, will now be admitted again. Their applications were not admitted until further notice.

Before the end of the suspension, a possible further extension of the suspension beyond 30 June 2022 was discussed in order to prevent the feared wave of insolvencies. The Spanish government rejected the proposal for a further extension. Currently, the number of insolvency applications has increased significantly in July, but the feared wave of insolvencies has not yet occurred.

Autor: Axel Roth