Leaving Spain with debts? Use the Second Chance Law first

What happens to Spanish debts when you move abroad

Spanish banks and card issuers can still pursue you, and so can the Tax Agency (Agencia Tributaria, known as Hacienda) and the Social Security Treasury.

The EU rule on enforcing judgments covers civil and commercial matters only (art. 39 of Regulation (EU) 1215/2012); tax and Social Security debts fall outside it (art. 1). Outside the EU, enforcement depends on local law.

Can you wait abroad until the debts are time-barred?

Under Spanish law, a contractual money claim with no special limitation period becomes time-barred five years after payment could be demanded (art. 1964.2 of the Civil Code, as worded by Law 42/2015). That period is interrupted by a court claim, by an out-of-court demand from the creditor and by any act in which you acknowledge the debt (art. 1973 of the Civil Code). A demand letter sent to your new address can be enough.

Tax debts become time-barred after four years (art. 66.b of the General Tax Act, LGT). Any collection step taken with your formal knowledge restarts the clock (arts. 68.2 and 68.6 LGT), including steps taken abroad through mutual assistance between tax authorities (art. 68.5 LGT).

Filing in Spain before you move: the COMI rule

Within the EU, insolvency proceedings are opened in the Member State where your centre of main interests (COMI) lies: the place where you habitually manage your interests in a way third parties can recognise (art. 3.1 of Regulation (EU) 2015/848). Spanish law uses the same test (art. 45 of the consolidated Insolvency Act, TRLC).

For individuals, the Regulation sets two rebuttable presumptions (art. 3.1, third and fourth subparagraphs):

• With no business or independent profession, your COMI is presumed to be your habitual residence, unless you moved that residence to another Member State in the six months before filing.
• If you are self-employed, it is presumed to be your principal place of business, with a three-month window.

Once you have settled abroad, the presumption points to your new home. If you moved to another EU country less than six months ago, the presumption does not apply there, and the court weighs objective facts that creditors can see: where you manage your finances, where you earn and spend most of your income or where most of your assets are (CJEU, case C-253/19 (ECLI:EU:C:2020:585)). You or any creditor can challenge the court's jurisdiction (art. 5.1 of the Regulation). Your registration on the padrón is one indication of where you live, not proof on its own.

Keeping a flat in Spain does not, in principle, bring the case back here, because owning your only property in another Member State does not rebut the presumption (C-253/19). If your COMI is no longer in Spain, a Spanish court could only open territorial proceedings, limited to your assets in Spain, and only if you have an establishment here: a place where you carry on a lasting economic activity with human and material resources (art. 49 TRLC; art. 3.2 of the Regulation).

File first, move later

The safest order is to file in Spain while your life is still based here and move once the case is under way. The CJEU has ruled that the court where an application is lodged keeps exclusive jurisdiction even if the debtor's COMI moves to another Member State after filing and before the court decides (case C-723/20, Galapagos BidCo (ECLI:EU:C:2022:209)). That ruling concerns moves between EU countries; for a move outside the EU, the firm has found no equivalent ruling.

You do not have to wait until you can no longer pay. Imminent insolvency is enough: you foresee that within the next three months you will not be able to meet your obligations regularly (art. 2.3 TRLC).

Choosing the route before you leave

The discharge of unpaid debts (exoneración del pasivo insatisfecho, EPI) is requested within insolvency proceedings (concurso de acreedores) and has two routes: with liquidation of your assets, or with a payment plan (art. 486 TRLC).

If you have nothing worth realising and no creditors holding at least 5% of the debt ask for an insolvency administrator within 15 days, you can apply for the discharge (arts. 37 bis and 37 ter TRLC). If no creditor objects and the requirements are met, the judge grants it in the decision that closes the proceedings (art. 502 TRLC). A creditor can still ask for revocation within three years in limited cases, such as hidden income or an inheritance that substantially improves your finances (arts. 493 and 493 bis TRLC).

With a payment plan, your assets are not liquidated as a whole and you pay according to a schedule approved by the court (art. 496 TRLC). It normally lasts three years, or five if your main home is not sold or if the payments depend mainly on your future income (art. 497 TRLC). Until the final discharge you must keep informing the court, with a report every six months (art. 498 ter TRLC), and creditors can ask the court to restrict how you manage or dispose of your assets (art. 498.1 TRLC). No rule deals specifically with moving abroad during a plan, so raise it before the plan is drafted.

For someone about to leave with little or nothing to liquidate, the liquidation route ends with one decision and leaves no plan to supervise from abroad.

Which debts the discharge cancels and which survive

The discharge covers all unpaid debts except those listed in art. 489.1 TRLC, whatever the nationality or address of the creditor (art. 251.1 TRLC). Once it is granted, the creditors concerned cannot take any action to collect (art. 490 TRLC). The exceptions are:

• Maintenance
• Civil liability arising from a crime, and non-contractual liability for death or personal injury
• Compensation for workplace accidents and occupational diseases
• Your employees' wages for the last 60 days of work
• Criminal fines and very serious administrative penalties
• The costs of your own application
• Secured debt, up to the value of the security
• Public debt, except the partial discharge explained below

Up to €10,000 of Tax Agency (Hacienda) debt can be discharged: the first €5,000 in full and 50% of the rest until that cap is reached. Social Security debt can be discharged on the same terms (art. 489.1.5.º TRLC). The Supreme Court applies this to all public-law debt, whoever collects it, with a separate limit for each public creditor (STS 260/2026, of 18 February (ECLI:ES:TS:2026:436)). Surcharges and interest on public debt are subordinated claims, so they are discharged in full without using up the limit (STS 264/2026, of 18 February (ECLI:ES:TS:2026:440); art. 281.1.3.º TRLC). This relief for public debt is only available the first time (art. 489.3 TRLC).

Guarantors and joint debtors are not released (art. 492.1 TRLC), so a relative who signed for your loan stays liable.

Does a Spanish discharge protect you abroad?

When the main proceedings are opened in Spain because your COMI was here, Spanish law governs the effects of closing them and the rights of creditors afterwards (art. 7.2.j and k of Regulation (EU) 2015/848). The opening decision is recognised in the other Member States with no further formality (arts. 19 and 20.1), and decisions on the course and closure of the proceedings are recognised automatically (art. 32.1), unless their effects are clearly contrary to public policy (art. 33). Because the Spanish discharge is granted in the closing decision or by order of the insolvency judge (arts. 500.1 and 502.1 TRLC), the firm's view is that it falls within art. 32.1, although it has found no court decision on the point.

Rights in rem, such as a mortgage, over assets located in another Member State are not affected (art. 8), and the Spanish case gives way in a Member State where secondary proceedings are opened (art. 20.1). Denmark does not take part in the Regulation (Annex A and recital 5 of Regulation (EU) 2025/2073).

The UK is now a third country. The Regulation applies to UK-related cases only if the main proceedings were opened before the transition period ended on 31 December 2020 (art. 67.3.c of the Withdrawal Agreement; C-723/20, para. 39). Recognition there is not automatic: it requires an application to the British courts under their own law (Cross-Border Insolvency Regulations 2006). If you owe money to UK lenders, read UK debts and Spain's Second Chance Law after Brexit.

Norway, Switzerland and every other non-EU country are outside the Regulation: in Spain the discharge still protects you (art. 490 TRLC), but there its effect depends on local law (art. 741.2 TRLC).

What happens to your ASNEF entry

Leaving does not clear a Spanish credit file: the entry can stay while the debt is unpaid, for up to five years from the due date (art. 20.1.d of the Data Protection Act, LOPDGDD). The discharge decision orders creditors to report it to the credit files they informed, and you can send a certified copy to those files yourself (art. 492 ter TRLC).

Running the case from abroad

The case runs in Spanish (art. 231 LOPJ; art. 142 of the Civil Procedure Act, LEC). If you have to give evidence and do not speak Spanish, the court clerk can appoint an interpreter (art. 143.1 LEC). Documents in another language need a translation, which can be private; if another party challenges it within five days, an official translation is ordered (art. 144 LEC). Foreign public documents need legalisation or an apostille unless a treaty or special law says otherwise (art. 323.2 LEC).

The case is heard by the Commercial Section of the Court of Instance (Sección de lo Mercantil del Tribunal de Instancia) of your province (art. 87.7 LOPJ). The application is signed by a court representative (procurador) and a lawyer, under a notarial or apud acta power of attorney (art. 6.2 TRLC).

Wherever you live, the law requires your cooperation: failing to cooperate with and inform the judge and the insolvency administrator bars the discharge (art. 487.1.5.º TRLC), and the judge checks the grounds for exclusion even if no creditor objects (STS 262/2026, of 18 February (ECLI:ES:TS:2026:439)). Keep a working postal address and email for the whole procedure.

Who can apply

Any individual in good faith can apply, with no nationality requirement (arts. 1.1 and 486 TRLC). Good faith means not falling into the closed list of exclusions in art. 487.1 TRLC, such as certain criminal convictions or reckless borrowing. You must also provide your Spanish income tax returns (IRPF) for the last three years, including any you should have filed (arts. 495.1 and 501.3 TRLC). Since Law 16/2022, you no longer have to attempt an out-of-court agreement first. The general rules are on the firm's Second Chance Law page.

Cost and how to start

The firm's fee is €999 for cases without special complexity and up to €4,500 for complex ones, for example with many creditors, real estate or high public debt. Both figures include IGIC (the Canary Islands indirect tax) and the procurador, and the fee is agreed in writing before any work starts. Details are on the fees page.

If you are planning to leave Spain, have your case assessed before you move. Request a consultation by video call and the firm will propose a date and time.