Second Chance Law Spain 2026:
Cancel 100% of Your Debts
Spain's insolvency law for individuals cancels all unpaid debts — including tax debts — by court resolution. Available to EU and non-EU residents with their centre of main interests in Spain.
6-18 months
Average process duration
100%
Debt cancellation possible
85-90%
Approval rate
All nationalities
Available to foreigners
Key facts about the law
Spain's Second Chance Law (Ley 25/2015, amended by Law 16/2022) is modelled on the EU Insolvency Directive and follows principles similar to bankruptcy discharge in the UK and US.
6-18 months
Average process duration
100%
Debt cancellation possible
85-90%
Approval rate
All nationalities
Available to foreigners
Who qualifies?
All of the following conditions must be met to apply.
Natural person (not a company). Legal entities have separate insolvency procedures.
Genuine insolvency: unable to meet payment obligations as they fall due.
Good faith: no fraud, no criminal convictions for economic crimes in the last 10 years, no concealment of assets.
No previous discharge granted in the last 5 years.
Centre of main interests (COMI) in Spain. Nationality is irrelevant — residency suffices.
Have made a genuine attempt to reach an out-of-court payment agreement with creditors (or qualify for the simplified procedure under Law 16/2022).
What debts are cancelled?
The 2022 reform significantly expanded the scope of cancellable debts, including partial discharge of tax and Social Security debts for the first time.
| Debt type | Cancellable? | Notes |
|---|---|---|
| Bank loans | — | |
| Credit cards | — | |
| Tax debts (AEAT) | Since 2022 reform | |
| Social Security debts | With thresholds | |
| Mortgage residual debt | — | |
| Business debts (personal guarantees) | — | |
| Public fines | — |
How the process works
Four stages from first consultation to judicial discharge.
Free consultation & viability analysis
We review your situation, calculate total debts, and confirm whether you meet all legal requirements before you commit to anything.
Documentation & insolvency petition
We gather all required documents — creditor list, income & asset statements — and file the insolvency petition before the court.
Court proceedings & creditors meeting
The court appoints a liquidator. Creditors have a window to claim. If a payment plan is agreed, that phase runs first.
BEPI — judicial discharge order
The judge issues the Benefit of Exoneration of Unsatisfied Liabilities (BEPI), cancelling all qualifying debts by court order.
Can I apply if I'm not Spanish?
Yes. Spain's Second Chance Law follows the EU Insolvency Regulation (EC 1346/2000 and its 2015 recast), which determines jurisdiction by the debtor's Centre of Main Interests (COMI). If your COMI is in Spain, Spanish courts have jurisdiction — regardless of your nationality.
COMI is typically where you habitually reside and where most of your economic activity takes place. Factors courts look at: where you live, work, bank, pay taxes and have registered your main address. There is no minimum residency period required by law, though courts may scrutinise very recent moves.
We regularly represent British, German, Dutch, Latin American and other international clients in Second Chance Law proceedings in Gran Canaria and other Spanish jurisdictions. We handle cases in English from start to finish.
Foreign residents — what you need
NIE (Foreigner Identity Number)
Required for all court proceedings
Spanish bank account
For insolvency proceedings
Empadronamiento (municipal registration)
Evidence of COMI
Foreign debt documentation
Translated if not in Spanish
Tax returns / AEAT registration
If you have Spanish tax obligations
Power of attorney
Required for us to act on your behalf
Frequently asked questions
Is Spain's Second Chance Law available to foreigners?
Yes, any person (EU or non-EU) with their centre of main interests (COMI) in Spain can apply. Residency is sufficient; nationality is irrelevant. COMI is typically determined by where you habitually reside, work and have your main financial ties.
How long does the process take?
6-18 months depending on the court and whether creditors dispute the discharge. Straightforward cases with no assets tend to resolve faster. Cases involving property or business assets may take longer.
Can I keep my home?
In some cases yes: if you can maintain mortgage payments and reach an agreement with the bank, the mortgage can be restructured separately while other debts are cancelled. This requires careful planning from the start of the process.
What happens to my debts with the Spanish Tax Agency (AEAT)?
Since the 2022 reform (Law 16/2022), tax debts are partially dischargeable: up to €10,000 fully cancelled; between €10,000 and €50,000 at 75% cancellation; over €50,000 at 50% cancellation. This was a landmark change — before 2022, AEAT debts were entirely excluded.
How much does it cost?
Initial consultation is free. Fees are agreed before starting any proceedings. In no-asset cases (where there is no property to liquidate), total fees typically range from €1,500 to €2,500. We provide a detailed fee agreement before you commit.
Keep reading
Free initial consultation. We speak English.
Find out in 30 minutes whether Spain's Second Chance Law can cancel your debts. We handle cases for international clients entirely in English.