Government refuses to cancel public sector debt in new bankruptcy law – CVBJ


The government approved the bill on Tuesday with the new Competition law in which refused to end the public sector privilege in the collection of debts, despite the fact that the European directive that it transposes asked to guarantee the right to “total debt relief” for debtors.

This means that even debtors in good faith, who cannot live up to their commitments, will only be forgiven until 1,000 euros in debt with the Treasury and 1,000 euros with Social Security, as specified by the Minister of Justice, Pilar llop. The rest must be returned.

“We don’t want anyone to stop doing business because of a failed project that will lead you forever“, Underlined the minister, but did not specify that this will apply only when these debts are contracted with the private sector.

The bill approved by the Council of Ministers on Tuesday also serves to transpose the European directive 2019/1023, known as the insolvency directive, and which curiously establishes in its article 20 that “the member states will ensure that insolvent entrepreneurs have access to at least one procedure that can lead to the total debt relief in accordance with this Directive “.

The Minister explained that in the article 23 of the directive are determined which debts can be exempted, and this article does not directly contemplate the inclusion of debts to the public sector. Although it does not prohibit their inclusion, states could therefore have done so.

For its part, article 81 of the European standard stipulates that “when there is a duly justified reason under national law it might be appropriate limit the possibility of exemption for certain categories of debt ”, to which the Spanish government has resorted.

“In our case, we consider it (the privilege of public credit) duly justified by the pension system that we have in the country, with public pensions, instead of private pensions like in other countries, ”he stressed, alluding to the fact that the state cannot afford to erase a single euro of debt in the face of the huge spending commitments it has, as for example in the payment of pensions.

However, the Minister clarified that the law must now to be treated in Congress where the rest of the parties could introduce amendments that could change this draft.

Sector criticism

“The impossibility of exempting public credit to the individual debtor is maintained, which implies that a fiscal cost is maintained which will hardly be able to satisfy. The exemption limit of 1,000 euros for the tax authorities and 1,000 euros for Social Security seems a little less to us an insult to bankrupt debtors in good faith“, lamented Father Vilella, partner of FTI & Partners, in statements to El Mundo.

In his opinion, there is “inconsistencies“Between the objectives that the Government transferred and what was actually approved. The government clarified that its objectives were to reduce costs, set up a pre-bankruptcy early warning system and promote restructuring agreements.

“The emphasis is on early warning, but the non-obligation to present a competition is maintained Because of moratorium. If the intention of the early warnings is to encourage the debtor to file for bankruptcy as soon as possible, it is totally incongruous to have maintained and extended the bankruptcy moratorium. What it seems is that the law was approved quickly and running to be able to receive European funds and that was done in a very different way from what Brussels intends, “he said.

Guillermo prada, economist and partner at PradaGayoso, says it is in the interest of the public treasury to give a second chance to those who fail in their business initiative, because otherwise it will be “to kick them into the underground economy and to waive the taxes that their return to activity could generate ”.

It is not only that the directive obliges us to this, but that if we want to promote entrepreneurship, we cannot make entrepreneurs understand that if they fail once, they will not be able to get up again because Hacienda will chase them to the grave», He emphasizes.

Agree with him Javier Diaz Galvez, partner of the restructuring firm Absence, which considers that the standard will have Negative effects and will not meet the objectives of the guidelines.

“There are a lot of bankruptcy and economic experts who fear possible negative effects both for the sector and for companies in the event to be applied as configured at the moment, ”he said.

Refers to this the figure of the bankruptcy administrator is excluded, which according to him “poses a great risk for the legal certainty of creditors, who will be left defenseless during the process” and will lead to “more workload for those already overburdened. Commercial courts ”.

The new procedure, which in the case of micro-enterprises will take place via an IT platform, in his opinion “will reduce the guarantees that the main objective of the tenders is achieved: to promote maximization of recovery, which would be very prejudicial to the interests of ordinary creditors. “

Refers to a new digital platform As a result, the bankruptcy situation of micro-SMEs, which represent 94% of the Spanish productive fabric, will be automatically resolved.

“We are concerned about the practical elimination of the bankruptcy administrator in 94% of the procedures, which are those of micro-SMEs. I do not know if the legislator has taken into account that with this definition of micro-SMEs, this platform will serve 94% of cases. European directive define a micro-SME like one who has up to 10 workers and up to 350,000 euros in turnover, not 2 million like the Government. We expected them to literally transpose but they make an interpretation that does not make much sense, ”he lamented for his part. Alex Munne, in front of the National Association of Specialized Entities in asset management.

If they applied this concept “would affect 30% and not the 94% who really need a more agile process. It would also unblock the courts, ”he said.

Jordi albiol, partner responsible for the bankruptcy of the company DWF-RCD, believes that “there is a positive part of the rule that is very laudable, and that is that it seeks to promote pre-bankruptcy instruments and it has been addressed in some depth; corn other problems can be improved: like what the legal status of the bankruptcy administrator is not discussed -It is carried out in the regulations-, or the procedure for micro-SMEs which will be telematic through forms -which generates many doubts about legal security and for the debtor himself ”.

“It includes a benefit of exemption of the debts of individuals, what is called the second chance. Corn public credit will not be exempt. Which causes debtors will be insolvent for life“, warns.

According to the criteria of

The Trust project Find out more

“,” author “: {” @ type “:” Person “,” name “:” Cvbj “,” url “:” https: / / / author / admin “,” sameAs “:[“”]}, “articleSection”:[“Business”], “image”: {“@ type”: “ImageObject”, “url”: “https: / / / wp-content / uploads / 2021 / 10 /elmundo__logo-generica.jpg “,” width “: 696,” height “: 396},” editor “: {” @ type “:” Organization “,” name “:” “,” url “:” https: / / “,” logo “: {” @ type “:” ImageObject “,” url “:” “},” sameAs “:[“”,””,””,””,””,””]}}

Previous Boycott the Olympics? How about sending a new team of athletes instead?
Next Is Debt Consolidation Hurting Your Credit? What would you like to know