The foreign creditor in bankruptcy proceedings in Spain (1): Bankruptcy processing
Insolvency proceedings are probably the most complex of the existing legal procedures in Spain. COVID-19 and the insolvency moratorium approved by the government until December 31st 2021, accentuate the need to pay particular attention to Spanish debtor companies at risk of insolvency and thus at risk of bankruptcy proceedings.
Let us remember that the declaration and processing of bankruptcy proceedings in Spain will take place where the centre of the debtor’s main interests is located. For that reason, the Spanish courts will be competent for the declaration and processing of bankruptcy proceedings of all those debtors whose centre of main interests is within Spanish territory, this being, in the case of companies and unless proven otherwise, the location of their registered office.
Declaring bankruptcy proceedings in the Spanish territory entails its consideration as main bankruptcy, implying the inclusion of all the debtor’s assets, regardless of whether they are or not in Spain. Likewise, and with certain exceptions, Spanish law will.
Therefore, after the declaration of the insolvency proceedings, it is not possible to claim payments outside said bankruptcy. Spanish and foreign creditors must claim their credits within the bankruptcy framework and are subject to Spanish law.
Types of bankruptcy in Spain
Bankruptcy petitions according to their typology:
- Ordinary bankruptcy: general procedure
- Expedited bankruptcy: simplified procedure to save time and money for the debtor and creditors
Types of bankruptcy according to who requests it:
- Voluntary bankruptcy: the debtor requests the declaration of bankruptcy to try to restructure the debt
- Involuntary bankruptcy: creditors request this to satisfy the debt
The bankruptcy administration will proceed with individual communication to all known creditors domiciled abroad after the declaration of bankruptcy.
If you need additional information regarding bankruptcy processing in Spain,
This article is not considered legal advice