Tenerife woman has 124,500€ bank debt cancelled by the courts under the "second chance law".

The Court of First Instance No. 7 of San Cristòbal de La Laguna cancelled a debt of 124,538€ contracted by a Tenerife woman with two banks, when she availed herself of the Second Chance Law.

According to the law firm 'Repara Tu Deuda Abogados', the woman went to them having accumulated debts that she could no longer afford to repay after losing her job.

The judge in the case issued a beneficio de exoneración del pasivo insatisfecho (BEPI), or benefit of exemption from unstatisfied liabilities, which freed the woman from the debts.

The legislation under which the debts were cancelled was introduced in 2015 (Bankruptcy Law and Law 25/2015 of 28 July) and allows both individuals and the self-employed to be exempted from paying debt to creditors provided that; There is a lack of assets to pay debts, the amount of the debts do not exceed 5 million euros, it can be demonstrated that the debtor has previously acted in good faith and has attempted to reach an agreement with creditors to postpone the debt.

If such an agreement cannot be reached then individuals can request that the courts cancel the debt.

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One of the many law firms that specialise in the "Second Chance Law", Repara Tu Deuda Abogados have so far managed to have over 30 million euros of debt wiped out.

In this regard, the lawyers of this firm have highlighted that they have invested millions of euros in technology and in publicising the Second Chance Law throughout the country. "We have been the ambassadors of the Second Chance Law since our beginnings in Catalonia," they said.

Nevertheless the law which has been around for a number of years is still not that well known, however given the current economic downturn that may be about to change and could potentially prove to be a lifeline for many Spanish residents.

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