The out-of-court settlement of payments is a mechanism set forth in the Bankruptcy Law that attempts to resolve the debts contracted by a natural or legal person with its creditors without having to reach the courts.
“The attempt at an out-of-court settlement of payments not only constitutes a viable mechanism to solve insolvency without the need to go to court, but also becomes imperative to obtain the exemption of the dissatisfied liability.
And this because the Lay n demands, in order to obtain the definitive cancellation of the debts, in addition to other requirements (fortuitous bankruptcy, non-existence of economic crimes, ...) it demands that the extrajudicial payment agreement has been tried. And it says well, "tried", since with the mere attempt of agreement it is understood that the requirement has been fulfilled to the point that the impossibility of appointing the mediator by the notary would serve the debtor for that purpose.
Regulation of extrajudicial payment agreement
This concept has its origin in the commercial legal order. Its regulation is based on a legislative connection that begins as follows.
It appears for the first time in Law 14/2013, of September 27, of support for entrepreneurs and their internationalization. Last update published on 12/29/2018.
Subsequently, we can find it in Royal Decree-Law 1/2015, of February 27, on a second chance mechanism, reduction of financial burden and other social order measures. Initial and only text published on 2/28/2015.
And finally, the previous rule makes a modification in Law 22/2003, of July 9, Bankruptcy, specifically, in its articles 231 and following. Being the last modification of this Law on 10/2/2015.
It is convenient to clarify that: the commonly called Second Opportunity Law (Royal Decree-Law 1/2015, of February 27, of second chance mechanism, reduction of financial burden and other measures of social order) has modified articles 231 and following Law 22/2003, of July 9, Bankruptcy (Bankruptcy Law).
Therefore, the Second Opportunity Law and the out-of-court settlement of payments are connected, but not the same.
While the Second Opportunity Law is a Royal Decree that has its own legal virtuality, the extrajudicial payment agreement is a Title (a section), specifically ten, of the Bankruptcy Law.
Subjects that may benefit from the out-of-court settlement of payments
Article 231 of the Bankruptcy Law
- Natural person. Anyone, provided debts do not exceed five million euros.
- Natural person entrepreneur. Not only those who had such a condition in accordance with commercial legislation, but those who exercise professional activities or have that consideration for the purposes of Social Security legislation, as well as self-employed workers.
- Legal persons, whether or not they are capital companies (associations, foundations, etc.), which meet the following conditions:
- They are in a state of insolvency.
- In case of being declared in contest, said contest will not have to be particularly complex in the terms provided in article 190 of this Law.
- That they have sufficient assets to meet the expenses of the agreement.
Subjects who CANNOT benefit from the out-of-court settlement of payments
Article 231 of the Bankruptcy Law
- Those who have been convicted in a final sentence for crime against the patrimony, against the socioeconomic order, of documentary falsehood, against the Public Treasury, Social Security or against the rights of workers in the 10 years prior to the declaration of insolvency.
- Persons who, within the last five years, had reached an out-of-court settlement of payments with creditors, had obtained judicial approval of a refinancing agreement or had been declared in creditors contest.
- Those who are negotiating with their creditors a refinancing agreement or whose contest application has been admitted for processing.
- Insurance and reinsurance entities.
- Copy of identity documentation: DNI / residence permit / NIE and passport or ID CARD
- Prior advice.
- Processing of service.
- Sending of supporting documents.
- Backup file of digitized documentation.
- Attention of requirements when necessary.
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