If you have debts you can no longer afford to pay, Spain's Second Chance Law may be the legal solution you are looking for. In Catalonia, this mechanism has allowed thousands of individuals and self-employed workers to cancel unmanageable debts — from bank loans and credit cards to debts owed to the Tax Agency or Social Security.

This guide explains exactly how the process works in 2026, what changed with the 2022 reform, and what you need to know before taking the first step.

What is the Second Chance Law?

The Second Chance Law (Law 25/2015, amended by Royal Decree-Law 1/2022) allows individuals — including the self-employed — to be discharged from debts that have become unsustainable through a court procedure. The aim is to allow those who have acted in good faith to cancel their debts and start afresh without being permanently burdened by past financial difficulties.

This is not a standard corporate insolvency procedure: it is a specific process for individuals who declare themselves insolvent and apply for exoneration of unsatisfied liabilities (EPI, Exoneración del Pasivo Insatisfecho).

Who can apply in Catalonia?

Individuals who meet the following conditions can apply for the Second Chance Law in Catalonia:

Current or imminent insolvency: inability to meet payment obligations with available assets and income.
Good faith: no criminal convictions for economic offences in the previous ten years, no concealment of assets, and no reckless accumulation of debt.
Natural person: private individuals, self-employed workers, or former company directors, even if the company has since closed.

Since the 2022 reform, it is no longer mandatory to attempt an out-of-court payment agreement (PAAC) before going to court. This has significantly simplified the process and reduced timescales.

Which debts can be cancelled in Catalonia?

One of the most important questions — and the one that generates the most uncertainty — is which debts are covered and which are not.

Debts that can be cancelled:

Bank loans and personal credit
Credit card debt
Outstanding mortgage balances following repossession
Debts to private suppliers and creditors
Tax debts to the Tax Agency (partially, up to the legally established limit)
Social Security debts (partially, up to the legally established limit)

The 2022 reform significantly expanded the possibility of cancelling debts owed to public administrations — a fundamental change from the previous legislation. Many self-employed workers with Tax Agency or Social Security debts can now have those debts fully or partially cancelled.

Debts that cannot be cancelled:

Child maintenance payments
Criminal fines
Civil liability arising from criminal offences

The process step by step at the Catalonia Commercial Court

The procedure is handled by the Commercial Court (Juzgado de lo Mercantil) in the debtor's place of residence. In Girona, this is Juzgado Mercantil 1 de Girona.

1. Initial case assessment
The first step is a thorough analysis of the debtor's financial situation: total debt, nature of creditors, assets, and background. This phase determines whether there are grounds to apply for the EPI.

2. Filing for voluntary insolvency
A voluntary insolvency petition is filed with the Commercial Court, accompanied by full financial documentation: list of creditors, asset inventory, income and expenditure statement.

3. Insolvency phase
The court appoints an insolvency administrator who reviews the debtor's assets and liabilities. In cases with no significant assets, the procedure is handled under a simplified, accelerated track.

4. Application for discharge of unsatisfied liabilities (EPI)
Once the insolvency phase is complete, the lawyer applies for permanent discharge of the debts that could not be paid. The court assesses whether the debtor has met the good faith requirements and issues its ruling.

Average duration of the process in Girona: between 6 and 14 months, depending on the complexity of the case and the number of creditors.

What happens to the family home?

This is the question that worries most people considering the Second Chance Law. The answer depends on each individual situation.

If the property has a mortgage and payments have stopped, a separate mortgage enforcement procedure may already be under way. The Second Chance Law does not automatically halt that process, though a coordinated solution can be managed.

If the mortgage is current or the property is unencumbered, it is often possible to keep the home within the process, particularly if a payment plan is agreed with the mortgage lender.

The right strategy for protecting the family home depends on the precise state of the case — this is one of the areas where the lawyer's expertise matters most.

Can I cancel debts with the Tax Agency or Social Security?

Yes, since the 2022 reform. Previously, debts owed to public administrations were excluded from discharge. They can now be cancelled up to the limits established by current law.

In practice, this means a self-employed worker who has accumulated debts with the Spanish Tax Agency or the Social Security Treasury can obtain discharge, provided the good faith requirements are met and the insolvency procedure is properly conducted. This change has made the Second Chance Law significantly more useful for those with debts of professional or business origin.

When do you need a specialist Second Chance lawyer?

The Second Chance Law process cannot be carried out without legal representation. Filing for voluntary insolvency, defending before the Commercial Court, negotiating with creditors and applying for the EPI all require a specialist lawyer with in-depth knowledge of the procedure.

Beyond the legal requirement, the lawyer's experience determines the difference between a full discharge and a partial one, or between an 8-month process and an 18-month one. How the debtor's good faith is documented, how the list of creditors is presented, and how the case is argued before the court are all decisive factors in the outcome.

At Sánchez Ruiz Abogados we specialise in Second Chance Law in Girona. We assess your situation, give you an honest picture of the realistic possibilities of your case, and if it is viable, we manage the entire process from the initial filing to the final resolution.

Frequently asked questions

Can I apply for the Second Chance Law if I am self-employed and have Tax Agency debts?
Yes. The 2022 reform allows partial exoneration of Tax Agency and Social Security debts. This is one of the most significant changes in current legislation.

Will I lose my home if I apply for the Second Chance Law?
Not necessarily. It depends on whether there is an active mortgage, the payment status, and the strategy adopted. In many cases it is possible to keep the family home.

How long does the process take at Girona's Commercial Court?
Between 6 and 14 months on average, depending on the complexity of the case and the number of creditors.

What documents do I need to start the process?
A complete list of debts and creditors, bank statements, tax returns for the past few years, documentation of owned assets, and any agreements or contracts with financial institutions.

How Does the Second Chance Law Work in Catalonia in 2026?