« A Twist: Predatory Borrowing! | Main | Collecting Consumer Debts: Talk to the FTC »

Spanish Bankruptcy Conference

posted by Bob Lawless

Hola! from Madrid. I am at the 1 Congress de Derecho Concursal, a conference offering comparative perspectives on the two-year anniversary of the adoption of the Spanish bankruptcy law. Professors at the University of King Juan Carlos and the University of Almeria organized this wonderful event. I would especially like to thank Professor Juana Pulgar Ezquerra for inviting me to speak, and Professor Francisco Javier Arias Varona for his kind hospitality and patience with my complete lack of Spanish language ability.

The Spanish bankruptcy law is primarily for businesses. This morning, we heard that of the 900 bankruptcy proceedings filed in Spain in 2006, only nine fifty-three were for individuals. As Professor Arias explained to me, the wonder was that there were even nine fifty-three. Spanish bankruptcy law offers no discharge and does not prevent or even stay a lender from retaking a personal residence when the home loan is in default. Consider that the home loan is the principal indebtedness for most Spainards, meaning that most individuals will be indebted to only one creditor or at least only one main creditor. For an individual, the Spanish bankruptcy law offers very little other than the chance to reach an agreement with one's creditors, a result that can be achieved outside bankruptcy court. Under these circumstances, it is not surprising that the filing rate is basically nonexistent.

Tomorrow morning, I will offer my perspective on the 2005 changes in the United States bankruptcy law. Although I am sure many of you are thinking about hopping on the next plane to hear me, I will save you the money and time and cut to the chase. My message will be that one has to think of bankruptcy as part of a consumer credit system. As the rest of the world moves toward an American-style consumer credit system, American-style bankruptcy proceedings will have follow. They may not be American-style proceedings in the procedural details, but the main features (e.g., automatic stay, discharge, partial repayment of creditors, exemptions) will be there in substance. How I will stretch that message into forty-five minutes of talking is a secret of the professorial trade.


Quickly, in a short rest in the Congress. Thanks for the mention. It is a real pleasure for us all to have the opportunity of hearing from other experiences. Maybe ours could be useful for others too. And, regarding to my hospitality and help with spanish2english translations, I think that the wonderful weather in Madrid these days has a lot to do with Bob's opinion, as it makes people very optimistic.


PS: As Bob told me there was an entry in the blog I read almost everyday, I could not wait to read it and leave the message. Thanks, Bob.

I have been checking the statistics, because the figures of consumer incolvency sounded too small. I was right. In fact, in 2006 the figure is a bit higher (not much more, anyway). There were 900 bankruptcy filings here and just 53 were individuals with no business activity. Maybe the person speaking was talking about his own court and I did not notice it when translating the speech to Bob. Sorry about that.


I Googled on Spanish bankruptcy laws and came across this article from a Conference in Madrid.
Could you please tell me where I easily can find basic information about the order of priority between creditors in Spanish bankruptcy proceedings?
I need the information kind of fast.
Torsten Gunnarson

The comments to this entry are closed.


Current Guests

Follow Us On Twitter

Like Us on Facebook

  • Like Us on Facebook

    By "Liking" us on Facebook, you will receive excerpts of our posts in your Facebook news feed. (If you change your mind, you can undo it later.) Note that this is different than "Liking" our Facebook page, although a "Like" in either place will get you Credit Slips post on your Facebook news feed.



  • As a public service, the University of Illinois College of Law operates Bankr-L, an e-mail list on which bankruptcy professionals can exchange information. Bankr-L is administered by one of the Credit Slips bloggers, Professor Robert M. Lawless of the University of Illinois. Although Bankr-L is a free service, membership is limited only to persons with a professional connection to the bankruptcy field (e.g., lawyer, accountant, academic, judge). To request a subscription on Bankr-L, click here to visit the page for the list and then click on the link for "Subscribe." After completing the information there, please also send an e-mail to Professor Lawless ([email protected]) with a short description of your professional connection to bankruptcy. A link to a URL with a professional bio or other identifying information would be great.