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Are the courts exonerating credits of a public nature after the reform of the Bankruptcy Law?

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Are the courts exonerating credits of a public nature after the reform of the Bankruptcy Law?

¿Están exonerando los tribunales los créditos de naturaleza pública tras la reforma de la Ley Concursal?
Are the courts exonerating credits of a public nature after the reform of the Bankruptcy Law?

For years there has been a wide controversy regarding the applicability of the Dissatisfied Liability Exemption Benefit (BEPI) or, as it is commonly known, “Second Chance< /strong>”, to public law debts, that is, those that the debtor maintains with TGSS, AEAT< /a>, regional or local haciendas, etc.

Such controversy began with the approval of Law 25/2015, of July 28, commonly known as “Second Chance Law” (and its antecedent, the Royal Decree-Law 1/2015, of February 27), which introduced into our legal system the figure of “Second Chance” reserving, however, privileged treatment for public law creditors to whom, de facto, it was not possible to apply such a figure. p>

It was the Supreme Court who, in its Judgment No. 381/2019, of July 2, 2019, interpreted that credits of a public nature should be included in the payment plan and be affected by the benefit of “Second Chance” because if it is not done, the ultimate purpose of this system would never be achieved, namely, the total exemption of the debt to the debtor in good faith who has tried to reach an out-of-court payment agreement and, where appropriate, has urged the consecutive contest.

The capital surprise came when verifying that the legislator, exceeding ultra vires in the mandate conferred for the recasting of the then current Law 22/20003, Bankruptcy , took advantage of the occasion to introduce an express mention that, exhaustively, excluded public credits from the “Second Chance” mechanism. This is stated in the arts. 491 and 497 of Royal Legislative Decree 1/2020, of May 5, which approves the consolidated text of the Bankruptcy Law (hereinafter, TRLC)

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The term of ultra vires is a judgment of contrast between what is ordered by the legislator and what is done by the Government that finds its foundation in the Constitution itself , whose article 82.6 expressly mentions the courts as an ordinary formula for control of delegated legislation, a formula to which others that provide for the laws of delegation themselves can be added. (STS, 3rd, 28-III-2012, rec. 387/2010)

In the case of a consolidated text, its scope should be limited to clarifying some controversial issues in the previous text and avoiding a whole range of interpretations by judicial institutions and bodies, but never creating new legislative content.

However, arts. 491 and 497 TRLC incorporate such exclusion against the jurisprudence issued by the Supreme Court in its Judgment of July 2, 2019 referred to above and, in addition, ignoring the provisions of Directive 2019/1023, of the European Parliament and of the Council, of June 20, 2019, on frameworks for preventive restructuring and exoneration of debts.

In the months immediately following the publication and entry into force of the TRLC, there was great legal uncertainty for individuals and professionals in the sector, since it was not known to what extent the mandate of the arts . 491 and 497 TRLC was going to be applied by the Courts and Tribunals.

After a few months, a practically unanimous trend seems to be confirmed among the Courts, which have come to confirm the inapplicability of the mandate of arts. 491 and 497 TRLC to, instead, apply the criteria of the High Court and based on the fact that a Consolidated Text such as the TRLC is a clarification and purification of a previous regulation and, therefore, the Government is not empowered to modify the scope of the Bankruptcy Law.

The Supreme Court determines that it makes no sense to forgive private credits but not public ones, because the BEPI or “Second Chance” is a mechanism for insolvent debtors regardless of the qualification of the liability, that is, regardless of the type of debt it may have (banks, suppliers, taxes, workers, etc.), even more so when public law debts usually represent a large percentage of the debtor’s liabilities that urges your contest in order to obtain the BEPI or “Second Chance”.

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This doctrine meets the criteria followed by the European Union, which has always sought to include in the second chance mechanism those credits contracted with Social Security and the Public Treasury because it understands that they lack It makes no sense to separate the public debt from the rest of the unsatisfied credits when it comes to granting a new financial opportunity to the debtor thereof.

The application by the Courts and Tribunals of the doctrine established by the Supreme Court, ignoring the literal diction of arts. 491 and 497 TRLC is protected by the content of art. 9.3 of the Constitution, regarding the non-retroactivity of unfavorable sanctions, and the jurisprudence that has been followed because it is more favorable for the debtor, that is, considering non-privileged public credits exonerable, even admitting that privileged credits are forgiven by way of considerable sacrifice during compliance with the payment plan.

In this regard, JUDGMENTS 281/2021 of the Court of First Instance No. 3 of Orihuela, Ruling No. 222/2021 of the Court of First Instance No. 3 of Huesca, Order of June 9, 2021 of the First Instance Court No. 1 of Jaén, the judgments of Section 15 of the Provincial Court of Barcelona of June 29, 2018, of July 19, 2018, of May 7, 2019 and May 9, 2019, it being foreseeable that this current of jurisprudence will continue in the coming months, confirming the applicability of the BEPI or “Second Chance” to public law credits.

We must not, however, forget that the Draft Reform of the Bankruptcy Law for the Transposition of Directive (EU) 2019/1023 (on restructuring and insolvency) excludes in its art. 489.1. 4th the applicability of such exemption mechanism to debts derived from public law credits, whatever the form of exemption, with a payment plan without liquidation of the active mass, or with its liquidation, for which we must be very pending to confirm what will be the next steps of the executive in this matter that, we intuit, will diverge from that sustained by Courts and Tribunals.

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