Insolvency/bankruptcy | European e-Justice Portal

1 Who may insolvency proceedings be brought against?

Insolvency proceedings apply to both civil debtors (deudor civil) such as consumers and to entrepreneurs, whether they are natural persons (persona física) or legal persons (persona jurídica), such as civil law companies, commercial companies, foundations or separate estates (for example, in the case of inheritance).

The regulations governing this are laid down in the Recast Text of the Insolvency Law (Texto Refundido de la Ley Concursal), approved by means of Royal Legislative Decree 1/2020 (Real Decreto Legislativo 1/2020) of 5 May 2020. Law 16/2022 of 5 September 2022 introduced amendments to Spanish insolvency law in order to transpose Directive (EU) 2019/1023 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of those procedures. Recently, the second Insolvency Directive was adopted: Directive (EU) 2026/799 of the European Parliament and of the Council of 30 March 2026

The new rules provide for three types of insolvency proceedings: insolvency (concurso de acreedores), governed by Book I of the Recast Text of the Insolvency Law; court approval of a restructuring plan to change the composition, terms or structure of the debtor’s assets and liabilities, or of its own funds, including transfers of assets, production units or the entire business, or to implement any operational changes necessary, or a combination of those elements (governed by Book II); and the special proceedings for micro-enterprises (for continuation or winding-up (liquidación)), which are governed by Book III and processed using standardised forms via a dedicated IT platform.

A debtor who is a natural person, whether or not they are an entrepreneur, may apply for an exemption (exoneración) in respect of unpaid liabilities under the terms and conditions set out in the Recast Text of the Insolvency Law (Articles 486 et seq.), provided that they have acted in good faith. To do so, debtors may choose between two routes: 1. submitting to a payment plan without prior winding-up of the assets covered by the proceedings, or 2. the winding-up of their assets and rights.

2 What are the conditions for opening insolvency proceedings?

The law lays down certain prerequisites to be met in order to open insolvency proceedings:

(A) The debtor's condition (subjective prerequisite): any debtor may have recourse to insolvency proceedings, whether a natural or legal person, an entrepreneur or a consumer.

Authorities that make up the territorial organisation of the state, public sector bodies and other public law bodies cannot be declared insolvent. Micro-enterprises that meet the requirements of Article 685 must use the special proceedings governed by Book III of the Recast Text of the Insolvency Law.

(B) Insolvency (objective prerequisite): the debtor’s insolvency, defined as the current or imminent inability to pay its liabilities on a regular basis, if it is expected to be unable to pay within three months (Article 2). The restructuring procedure can also be used where insolvency is likely in the next two years (Article 585).

(C) Multiple creditors and sufficient assets or rights to bear the costs of the proceedings and to divide the proceeds between the creditors.

(D) Requirements for the application (representation and competent court):

If insolvency proceedings are applied for by the debtor (voluntary proceedings), it must submit an application to the Commercial Division (sección mercantil) of the competent Court of First Instance (Tribunal de Instancia) (the court with jurisdiction in the place in which the debtor's residence or centre of main interests is located), signed by a lawyer and legal representative and accompanied by the required legal documents: a report on their economic activity, an inventory of assets, a list of creditors and accounting documents (Articles 6 and 7 of the Recast Text of the Insolvency Law).

A creditor (acreedor) of the debtor may also submit an application for insolvency proceedings (‘compulsory’ insolvency (concurso ‘necesario’)). In this case, the creditor must submit an application for a declaration of bankruptcy of their debtor to the same competent court, providing proof of their claim and one or more of the facts revealing insolvency as set out in the legal text (the most common are the inability to pay debts and unsuccessful asset tracing).

Opening of proceedings and time at which proceedings take effect

Insolvency order: the judge must examine the documentation submitted and if the insolvency is justified, they must declare the debtor insolvent on the same day as the application or the following day.

The decision opening insolvency proceedings takes effect once issued, even if an appeal is lodged. An administrator (administrador concursal) is appointed, with the power to administer and dispose of the debtor’s assets (or who replaces the debtor, in some cases). As a general rule, the insolvency order also has the effect of suspending enforcement proceedings against the debtor’s assets.

If the documentation submitted is incomplete, the judge may allow a single period of five days to complete it.

If insolvency proceedings are applied for by a creditor, the debtor is summonsed and may contest the insolvency order. In such cases, the judge convenes a hearing where the parties may put forward evidence with certain limitations, and the judge must decide whether the debtor is currently insolvent or not and, where appropriate, issue the insolvency order. Proceedings are also opened if the debtor accepts the insolvency order, does not contest it or does not appear at the hearing.

Publication of the insolvency order

The insolvency order must be published in the Official State Gazette (Boletín Oficial del Estado), the Public Insolvency Register (Registro Público Concursal) and in the commercial registers and property registers in which the company and its assets are registered.

Provisional measures

At the request of the person applying for insolvency proceedings and, if applicable, after providing a security to cover potential liabilities, once the judge admits the application, they may adopt the necessary measures to ensure the debtor’s assets are not disposed of, in the manner provided for under general procedural law.

3 Which assets form part of the insolvency estate? How are the assets treated which are acquired by or which devolve on the debtor after the opening of the insolvency proceedings?

Assets that form part of the insolvency estate:

All assets and rights held by the debtor at the time of the insolvency order form part of the insolvency estate, as well as all of those the debtor acquires or that are clawed back during the proceedings. Assets that the law declares non-attachable are exempt.

4 What powers do the debtor and the insolvency practitioner have, respectively?

The debtor’s powers once insolvency is declared:

Once insolvency is declared, the debtor retains ownership of the assets and rights that make up the insolvency estate (masa activa), and may also continue its business or professional activity, subject only to the limitations imposed by the powers of intervention or suspension of the appointed insolvency administrator (administración concursal).

Appointment and powers of insolvency administrators:

The administrator is chosen from among the natural and legal persons voluntarily registered in the Public Insolvency Register, in accordance with the conditions established by law. For their appointment, a distinction is made between small-, medium- and large-scale (where liabilities exceed EUR 10 million) insolvency proceedings. For insolvency proceedings involving listed companies, the judge is appointed from among the three judges shortlisted by the National Securities Market Commission (Comisión Nacional de Mercados y Valores).

The appointed administrator must accept the role and may be rejected or dismissed by the judge if there is just cause. Administrators may also appoint delegated assistants to aid them in their duties. They are paid in accordance with the fee system set out in Royal Decree 1860/2004 (Real Decreto 1860/2004) of 6 September 2004 (currently under revision).

The insolvency administrator’s functions can be divided into two groups: management of the assets that make up the insolvency estate and payment of claims against it (intervening in or replacing the debtor in its powers to administer and dispose of its assets); and management of the insolvency proceedings, including submission of the report corresponding to the initial phase of the proceedings, with the final lists of assets and rights and their valuation (insolvency estate) and the list of creditors, with their amounts and classification (debtor’s liabilities (masa pasiva)). Once the winding-up phase is open, the administrator is responsible for the sale of the assets and the distribution of the proceeds among the creditors in accordance with the order of payment set out in law.

The insolvency judge:

Competence to hear insolvency proceedings corresponds to the commercial courts, as a specialised branch of civil justice. The judge declares insolvency, appoints the administrator and leads the proceedings.

In the insolvency order, the judge may limit the debtor’s fundamental rights: (a) interception of postal and telephone communications; (b) the obligation to reside in the same area as its address, with the possibility of house arrest; and (c) entry and search of the residence. If the debtor is a legal person, these measures may also be adopted with regard to all or some of its current directors or liquidators, and those that have carried out the role in the previous two years.

For their part, Articles 52 and 53 of the Recast Text of the Insolvency Law grant ‘exclusive and exclusionary’ competence to the insolvency judge over a set of matters covering, in general, all actions that are directed towards or have a direct relationship with the debtor’s assets. The judge is also competent to collectively accept or suspend employment contracts when the employer is declared insolvent and to hear liability actions against the directors or liquidators of the insolvent company. For preliminary rulings, and for the purposes of the insolvency process only, the judge’s competence also extends to administrative or social matters related directly to the insolvency proceedings.

Regulation (EU) No 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (the European Insolvency Regulation) and the Recast Text of the Insolvency Law lay down rules on international jurisdiction, applicable law and the recognition and enforcement of decisions.

5 Under which conditions may set-offs be invoked?

Once insolvency proceedings have been opened, there can be no set-off of claims or debts of the debtor. However, set-off is permitted if its requirements were met prior to the insolvency order, even if the decision is issued at a later time. These requirements are provided for in general in Article 1196 of the Civil Code (Código Civil) (reciprocity of the claims, uniformity of the debts, and that they are due and payable).

Insolvency proceedings with a foreign element are exempt from this rule if the law applicable to the debtor’s reciprocal claim allows this in situations of insolvency.

6 What effect do insolvency proceedings have on current contracts the debtor is a party to?

The Recast Text of the Insolvency Law regulates the effects of insolvency proceedings on the contracts entered into by the debtor with third parties under Articles 156 et seq., the provisions of which affect those contracts pending fulfilment prior to the insolvency order. The issue is considered with regard to bilateral contracts, since unilateral contracts will determine recognition of the claims of third-party creditors or the demand for their claims to be included in the assets covered by the proceedings, as expressed in Article 157. Contracts entered into with public administrations are regulated by special administrative law.

As a general principle, Article 156 establishes that the insolvency order alone does not affect contracts with reciprocal obligations pending fulfilment by the debtor or by the other party. The debtor’s obligations are charged against the insolvency estate. Any compensation resulting from termination is also considered a claim against the insolvency estate.

Reinforcing the validity of these contracts, the law deems as invalid any clause establishing the power to cancel or terminate the contract due solely to one of the parties being declared insolvent.

If it is in the interest of the insolvency proceedings, the administrator (in the case of suspension) or the debtor (in the case of supervision) may request termination of the contract by the insolvency judge. In such cases, the judge must summons the debtor, the administrator and the other party to the contract to appear before the court. If an agreement is reached between those appearing before the court, the judge will issue an order terminating the contract. Otherwise, the dispute will be processed through an incidental insolvency proceeding and the judge will decide upon anything relating to the return of payments and compensation, which will be charged against the insolvency estate, and clearly may not be advantageous if the amount is considerable.

Termination due to breach of contract:

An insolvency order does not affect the termination of bilateral contracts due to subsequent breach by either party. In the case of continuing-performance contracts, the power to terminate may also be exercised if the breach took place prior to the insolvency order. However, even if there are grounds for termination, the judge, bearing in mind the interests of the insolvency proceedings, may order fulfilment of the contract, with the payments due or which must be performed by the debtor being charged against the insolvency estate.

Actions to terminate contracts must be brought before the insolvency judge, through the channel of incidental insolvency proceedings. Once the request is upheld (and, therefore, the termination of the contract agreed), any outstanding liabilities will cease to be valid. With regard to liabilities due, the insolvency proceedings will include the claims of creditors that have fulfilled their contractual obligations, if the debtor’s breach was prior to the insolvency order; if it was subsequent, the claims of parties that have fulfilled their obligations will be charged against the insolvency estate. The claims will include any compensation for damages.

Articles 169 et seq. of the Recast Text of the Insolvency Law contain provisions regulating the effects on employment contracts, and the following article regulates the effects on senior management contracts.

7 What effect does an insolvency proceeding have on proceedings brought by individual creditors (with the exception of pending lawsuits)?

Prohibition of new declaratory judgment actions

Civil and labour court judges cannot admit actions which should be heard by the insolvency judge (essentially, those directed against the debtor’s assets).

If by error one of these actions were admitted, the closure of all proceedings will be ordered and any actions taken will be invalid. Commercial court judges must also abstain from admitting any actions lodged after the opening of insolvency proceedings and until their completion, if those actions involve claims relating to corporate obligations against the directors of insolvent capital companies that have breached their duties if there are grounds for winding-up.

Effects of the insolvency order on enforcement and collection proceedings against the debtor’s assets:

The general rule is that once insolvency proceedings have been opened, individual, court or out-of-court enforcement proceedings may not be initiated, nor may administrative or tax collection proceedings against the debtor’s assets continue. If this prohibition is infringed, the sanction will be that the action is declared null and void. The rule establishes two exceptions where enforcement may continue despite the insolvency order and until approval of the winding-up plan: (a) administrative enforcement proceedings in which attachment orders have been handed down; and (b) labour-related enforcement proceedings involving attachment of assets belonging to the debtor prior to the order, and provided that the attached assets are not necessary for the continuance of the debtor’s business or professional activity.

For pending enforcement proceedings, Article 55(2) stipulates that actions that are underway must be suspended as of the date of the insolvency order, though the corresponding claims may be processed in the insolvency proceedings.

There are special rules for enforcing collateral, which are set out in the next section, since this involves dealing with the effects on certain claims.

8 What effect does an insolvency proceeding have on the continuation of lawsuits pending at the moment of the opening of the insolvency proceeding?

Effects on declaratory proceedings pending at the time of the insolvency order:

Declaratory proceedings involving the debtor that are pending at the time of the insolvency order will continue until the final judgment, although, notwithstanding this, proceedings of legal persons claiming damages against their administrators, liquidators or auditors will be joined to the insolvency proceedings and will continue their procedural course.

Arbitration proceedings: arbitration agreements involving the debtor become invalid during insolvency proceedings (Article 52); therefore, the initiation of arbitration proceedings is prohibited after the insolvency order. Those that are underway will continue until the final arbitration award.

The debtor’s right to bring actions:

The law determines the debtor’s legitimacy to bring actions according to the powers it retains. In general terms, if the debtor is under administration, the administrator has the right to bring actions of a non-personal nature; if the debtor is under supervision, it has the right to bring actions with proper authorisation from the administrator if the actions affect the debtor’s assets. In the case of supervision, if the administrator considers that bringing an action is advisable in the interests of the insolvency proceedings and the debtor does not pursue it, the judge may authorise the administrator to do so.

9 What are the main features of the participation of the creditors in the insolvency proceeding?

Participation of creditors in insolvency proceedings:

Creditors may apply to the judge for insolvency proceedings and the debtor may contest the application, in which case a hearing is held and the judge issues a decision by way of order. If the judge opens insolvency proceedings, they will be considered ‘compulsory’, which normally means that the debtor is suspended from administration and disposal of its assets and is replaced by the administrator.

When insolvency proceedings are opened, creditors are granted a period of one month from publication of the order in the Official State Gazette to make their claims, and the administrator must inform each of the creditors identified in the debtor’s documentation of the responsibility to communicate their claims. The period is no different for creditors domiciled abroad. This communication must be written and addressed to the administrator, and it must identify the claim with the necessary information on amount, the dates on which the claim arose and became due, characteristics and expected classification, and if a special preferential right is alleged, the assets or rights subject to payment and their registry details must be indicated. The supporting documentation must also be included. These communications may be carried out electronically.

The administrator must decide on the inclusion or exclusion of each claim and its amount, as well as its classification, in a list of creditors which will accompany their report. Creditors that are dissatisfied with the classification or amount of the claim or those that were not included can challenge the report within a period of 10 days by filing for an incidental insolvency proceeding, on which the judge will issue a judgment. Prior to submitting the report (in the 10 days before its submission), the administrator will send an electronic communication to the creditors whose address it has informing them of the draft list of creditors and inventory. Creditors that are dissatisfied may write to the administrator for the purpose of rectifying any error or providing any other necessary information.

Creditors also take part in the arrangement and winding-up phases. In the arrangement phase, they may submit an arrangement proposal and may also offer their adherence to the early arrangement proposal submitted by the debtor. In any case, they will be summonsed to a creditors’ meeting where the arrangement will be debated and its approval voted on. This requires the attendance of the majorities provided for in Article 124 of the Insolvency Law. This process may also take place in writing when the number of creditors exceeds three hundred.

Some creditors may contest the approval of the arrangement (those that do not attend the meeting or those that are illegitimately deprived of their right to vote) and, once approved, creditors may request non-compliance with the arrangement.

In the winding-up phase, creditors may submit comments on the winding-up plan presented by the administrator and on the final report, before the insolvency proceedings are declared closed.

In the classification phase, creditors have party status and may submit comments on the report by the administrator and on the opinion of the public prosecutor’s office, although they cannot legitimately make independent classification claims.

Lastly, with regard to the closure of insolvency proceedings, creditors may also submit comments contesting the closure in certain cases.

10 In which manner may the insolvency practitioner use or dispose of assets of the estate?

Disposal of assets of the insolvency estate in the initial phase:

Given that insolvency proceedings do not suspend the debtor’s activity, once insolvency is declared, the debtor may continue to dispose of its assets in accordance with the established supervision arrangement: if it is under supervision, it will be subject to the authorisation or consent of the administrator, and if it is under administration, the administrator will be responsible for disposal of its assets.

Until the arrangement is approved or until the winding-up phase begins, in principle, the assets of the insolvency estate may not be disposed of or encumbered without the judge’s authorisation. This does not include: (a) the sale of assets that the administrator deems indispensable for guaranteeing the viability of the company or the cash requirements required by the proceedings; (b) the sale of assets that are unnecessary for continuance of the debtor’s activity, with the assurance that the price corresponds substantially to the value assigned to the asset in the inventory; and (c) disposal of assets that are intrinsic to the continuation of the debtor’s activity.

In this last case, when the debtor is not suspended from administration and disposal of its assets, the administrator may determine in advance the actions or operations inherent to the company’s business or trade, which the debtor may carry out itself depending on their nature and amount. The debtor may also carry out these actions from the time of the insolvency order until the administrator takes up their duties.

Disposal of assets of the insolvency estate in the winding-up phase:

There are two main phases in the winding-up process:

(a) handling of winding-up operations in accordance with the rules set out by the court and insolvency law rules, whether mandatory (relating to special preferential rights and the sale of production units) or additional (the auction rule, generally, unless authorised by the court).

(b) payment of insolvency creditors and payments against the insolvency estate, in the order provided for by law.

11 Which claims are to be lodged against the debtor's insolvency estate and how are claims arising after the opening of insolvency proceedings treated?

Once insolvency proceedings are opened, the claims of all of the creditors, regardless of their nationality and domicile, are included among the debtor’s liabilities. The purpose here, based on the principles of par condicio creditorum and compliance with the ‘dividend law’ (ley del dividendo), is to give all claims equal treatment in the context of the debtor’s verified insolvency and when it comes to settling all of its debts.

There is an initial essential distinction between insolvency creditors and creditors that are not affected by the insolvency proceedings (so-called ‘claims against the insolvency estate’).

Insolvency creditors can be preferential (general or special), unsecured or subordinate.

Additionally, claims against the insolvency estate are outlined in Article 242 of the Recast Text of the Insolvency Law with a restricted list. These are claims generated after the insolvency order, as a result of the continuation of the debtor’s business or professional activity, or arising from expenses incurred as a result of the conduct of the insolvency proceedings.

In other cases, these claims arise from decisions issued during the proceedings; for example, in determining the consequences of revocatory actions or as a result of the termination of contracts, or from non-contractual obligations.

12 What are the rules governing the lodging, verification and admission of claims?

The communication of the claim must be written and addressed to the administrator, and it must identify the claim with the necessary information on amount, the dates on which the claim arose and became due, characteristics and expected classification, and if a special preferential right is alleged, the assets or rights subject to payment and their registry details must be indicated. The supporting documentation must also be included. These communications may be carried out electronically.

If creditors do not communicate their claims in a timely manner, they may still be included in the list by the administrator or by the judge when deciding upon challenges to the list of creditors, but they will have subordinate status. However, the claims in Article 86(3), claims arising from the debtor’s documentation, claims that are recorded in an enforceable document, claims secured by collateral recorded in a public register, claims that are recorded in another manner in insolvency proceedings or in other legal proceedings, and claims whose verification is required from the public administrations will not be subordinated on these grounds and will be classified accordingly.

Claims that do not meet even these criteria for inclusion in the list, having been communicated after the deadline, lose all possibility of being paid in the insolvency proceedings.

13 What are the rules governing the distribution of proceeds? How are claims and the rights of creditors ranked?

The law classifies insolvency claims into three categories (Article 269): preferential, unsecured and subordinate. Preferential claims, for their part, are subdivided into special and general and then into different classes in the manner provided for in Article 287. The category of unsecured claims is residual: all claims that do not enter into the other two categories of preferential or subordinate are unsecured.

(A) Claims with special preference (Article 270) are paid using amounts made from the sale of the assets to which the claims apply. They include:

1. Claims secured with a real estate mortgage, a chattel mortgage, or with a registered lien on the mortgaged or pledged assets or rights.

2. Claims secured by the pledging of income from encumbered property.

3. Loan claims on fixed assets, including the claims of workers on the objects manufactured by them while they are the property or in the possession of the debtor.

4. Claims on financial lease payments or purchase in instalments of movable or immovable assets, to the benefit of the lessors or sellers and, if applicable, the financial backers, on assets leased or sold with reservation of title, with a prohibition on disposal or with a condition subsequent in the case of non-payment.

5. Claims guaranteed with securities represented in account entries, on the encumbered securities.

6. Claims secured by a pledge established in public documents, on pledged assets or rights that are in the possession of the creditor or of a third party.

Special preference will only affect the part of the claim that does not exceed the value of the respective guarantee recorded in the list of creditors. The amount of the claim that exceeds the amount recognised as having special preference will be classified according to its nature.

(B) Claims with general preference (Article 280) are paid preferentially in respect of unsecured and subordinated claims. They include:

1. Wage claims that do not have special preference, of the amount resulting from multiplying triple the minimum guaranteed interprofessional wage by the number of days of wages pending payment; compensation arising from the termination of contracts, of the amount corresponding to the legal minimum calculated on a basis of no more than triple the minimum guaranteed interprofessional wage; compensation arising from workplace accidents and occupational illness, accrued prior to the insolvency order.

2. The amounts corresponding to tax and social security withholdings owed by the debtor in compliance with a legal obligation.

3. Claims of natural persons arising from freelance work and those that correspond to authors for the assignment of the exploitation rights of works subject to intellectual property protection, accrued during the six months prior to the insolvency order.

4. Tax claims and other public law claims, as well as social security claims that do not enjoy special preference. This preferential right may be applied to up to 50% of the overall claims of the tax authority and the overall claims of the social security system, respectively.

5. Claims for non-contractual civil liability.

6. Claims arising from new cash income granted in the context of a refinancing agreement that meets the conditions laid down in Article 71(6) and of the amount not recognised as a claim against the insolvency estate.

7. Up to 50% of the amount of the claims held by the creditor that applied for the insolvency proceedings and which are not considered subordinate.

1. Claims that have been communicated late, except where these relate to claims under forced recognition or due to court decisions.

2. Claims that, on the basis of contractual agreement, are subordinated.

3. Claims for surcharges and interest.

4. Claims for fines and penalties.

5. Claims held by any persons with a special relationship with the debtor under the terms established in this Law.

6. Claims arising from revocatory actions due to a person having been declared to have acted in bad faith in the contested act.

7. Claims arising from contracts with reciprocal obligations or, in the case of reinstatement, in the situations laid down in the provision.

14 What are the conditions for, and the effects of closure of insolvency proceedings (in particular by composition)?

After the initial phase of the insolvency proceedings, when the assets and liabilities covered by the proceedings have been definitively established, there are two possible solutions: creditors’ arrangement (convenio) or winding-up (liquidación).

For the arrangement to be approved by the insolvency judge (with write-offs, a reduction of the amount of claims and/or a stay or an extension of the deadline, as well as other additional content), sufficient creditors must support the proposal to achieve the required legal majorities (Article 376 et seq.).

The arrangement comes into effect as of the day of the judgment approving it and as of that moment the effects of the insolvency proceedings come to an end and are replaced by those established in the arrangement. The role of the administrator also comes to an end. The arrangement binds the debtor and the unsecured and subordinate creditors, as well as the preferential creditors that voted in favour. It may also bind the preferential creditors depending on the majorities reached in its approval. Once the arrangement has been implemented, the judge will declare this fact and order the closure of the insolvency proceedings.

If the arrangement is not complied with, any creditor may request a declaration of non-compliance from the judge.

Closure of insolvency proceedings:

Once the creditors’ arrangement has been approved or the winding-up of the debtor’s assets and rights and the payment or distribution of the proceeds to its creditors has been completed, the insolvency proceedings are closed. Closure must be declared by the judge, who also approves the accounts submitted by the administrator.

When the closure of insolvency proceedings is declared by approval of the creditors’ arrangement, all limitations on the debtor’s powers come to an end. In the event of closure of insolvency proceedings following the completion of winding-up, if the debtor is a legal person, it will lose its legal personality and its register entries will be removed.

If the debtor is a natural person, the law lays down special rules for the debtor to enjoy exemption from payment of claims that were not settled during the insolvency proceedings. The requirements for this exemption are laid down in Articles 486 et seq. The debtor must have acted in good faith and must fulfil certain obligations. The debtor itself must apply for this right and both the administrator and the creditors may make representations. Once an exemption has been declared with its legal effects, it may be revoked in the cases provided for by law.

15 What are the creditors' rights after the closure of insolvency proceedings?

In the case of closure of the insolvency proceedings of legal persons due to winding-up, they lose their legal personality.

If the closure takes place due to implementation of the arrangement, the creditors will have had their claims paid in accordance with its provisions. Preferential creditors that did not sign the creditors’ arrangement may continue or initiate individual enforcement proceedings, under certain circumstances.

During implementation of the creditors’ arrangement, it is also possible for the debtor to lose its legal personality through a process of structural modification, resulting in the assumption of the liabilities by a new company or an acquiring company.

In the case of debtors that are natural persons, closure of insolvency proceedings due to winding-up or the insufficiency of the assets means that the creditors may initiate individual enforcement actions against the debtor, unless it has been exempted from unpaid claims in the manner provided for in Article 178bis.

Reopening insolvency proceedings:

If an insolvency order is issued for a debtor that is a natural person within the five years following the closure of previous insolvency proceedings due to winding-up or the insufficiency of the assets, this will be considered a reopening of the earlier proceedings.

In the case of debtors that are legal persons, the reopening of insolvency proceedings that were closed due to winding-up or the insufficiency of the assets will be ordered by the same court that heard the first proceedings, will be processed in the same proceedings and will be limited to the phase of liquidation of assets and rights that appeared subsequently.

In the year following the date of the decision closing insolvency proceedings due to the insufficiency of the assets, the creditors may apply to reopen the proceedings for the purpose of initiating recovery actions, indicating the specific actions to be initiated or providing, in writing, relevant facts that could lead to classification of the insolvency as culpable, except if a judgment were issued on classification in the closed insolvency proceedings.

16 Who is to bear the costs and expenses incurred in the insolvency proceedings?

According to Article 242 of the Recast Text of the Insolvency Law, all legal expenses required to apply for insolvency proceedings and to carry them out are claims against the insolvency estate. In particular, this includes all claims arising from legal costs and expenses required to apply for and order insolvency proceedings, the adoption of precautionary measures, the publication of the decisions provided for in this law, and the attendance and representation of the debtor and of the administrator throughout the insolvency proceedings and the incidental proceedings, when their participation is legally mandatory or is in the interests of the insolvency estate, until the arrangement comes into effect or, otherwise, until closure of the insolvency proceedings, except for claims arising from appeals lodged against the court’s decisions when they are totally or partially dismissed with an express order to pay the costs.

Also included as claims against the insolvency estate, according to the third section of this Article, are the legal costs and expenses arising from the attendance and representation of the debtor, the administrator or the legitimate creditors at proceedings that, in the interests of the insolvency estate, continue or are initiated in accordance with the content of this law, except for the provisions relating to cases of withdrawal, acceptance, settlement or separate defence of the debtor, and, if applicable, up to the quantitative limits established therein.

In cases of closure of insolvency proceedings due to the insufficiency of the insolvency estate, claims for legal costs and expenses are paid before the rest of the claims against the insolvency estate, with the exception of workers’ and maintenance claims (Article 473).

The administrator’s fees are claimed against the insolvency estate and are set by the judge in accordance with a legally approved fee scale; at the moment, the fee scale approved by Royal Decree 1860/2004 of 6 September 2004 is still valid. Article 84 lays down special rules for their determination and effect.

The law provides for the possibility of appointing delegated assistants to aid the administrator and their remuneration is covered by the latter.

17 What are the rules relating to the voidness, voidability or unenforceability of legal acts detrimental to the general body of creditors?

The regulation of revocatory actions in insolvency proceedings is contained in Articles 226 et seq. of the Recast Text of the Insolvency Law.

Article 226 contains the legal system for claw-back actions, based on a general clause declaring all acts carried out by the debtor that are ‘detrimental to the assets covered by the proceedings’ as ‘revocable’, whether or not there was ‘intention to mislead’. In order to safeguard the effects of revocation, a specific period of time is established: the two years prior to the date of the insolvency order.

(A) Revocation period

The law opts for the establishment of a specific revocation period: two years dating back from the date of the insolvency order.

(B) The concept of ‘pecuniary detriment’

Actions carried out during the ‘suspect period’ by the debtor are revocable if they are detrimental to the assets covered by the proceedings. Pecuniary detriment must be satisfactorily proven by the party making the complaint. However, given the difficulties normally entailed in proving detrimental acts, the Insolvency Law facilitates bringing actions through the establishment of a set of presumptions. As happens in other parts of the law, the presumptions may be irrebuttable or rebuttable. Thus: (a) pecuniary detriment is presumed irrebuttable in two cases: (i) when dealing with the free disposal of assets, except donations for use, and (ii) when dealing with payments and other acts settling obligations that fall due after the insolvency order, unless they are secured by collateral, in which case the presumption admits evidence to the contrary; (b) pecuniary detriment is presumed rebuttable in three cases: (i) when dealing with the disposal of assets against payment to persons with a special relationship with the insolvency debtor, (ii) when dealing with the creation of charges on property in favour of pre-existing obligations or in favour of new obligations incurred to replace the former, and (iii) payments or other acts settling obligations secured by collateral and that fall due after the insolvency order.

Legal standing to bring revocatory actions in insolvency proceedings falls to the administrator. However, for the purpose of protecting creditors against the inactivity of administrators, the law provides for a subsidiary or second grade legal standing for creditors that have urged the administrator in writing to bring a revocatory action, if within a period of two months since the date of the request the action is not brought by the administrator. The law contains rules aimed at ensuring that administrators effectively carry out the role of ensuring that the assets covered by the proceedings are not disposed of.

Last update: 17/07/2026