The Civil Code’s Article 1911 is irrefutable.
Consequently, until there is reform in our bankruptcy law, an individual person’s bankruptcy does not relieve the debtor from his debts, that means, once bankruptcy proceedings are finalized, the debtor continues to owe money since the proceedings do not release him from his debts. This situation also discourages creditors from accepting proposals or debt reductions. But does this mean there is no solution for this type of debtor? Should they always have to carry the heavy weight of their debt?
The answer should definitely be no. There are solutions in comparative law that allow bankrupt individuals to negotiate payment of their debts and even get them cancelled, allowing the former debtor a form of orderly life. In Spain, there have been some cases that have represented a breakthrough in the perception that legislators have of a bankrupt individual. The most prominent is that of Judge of Barcelona Commercial Court number 3, D. Jose Maria Fernandez Seijoo, who decided in an unprecedented court order to grant ‘freedom’ to a debtor by canceling his debts. Barcelona Commercial Court number 1, under its previous holder, D. Enrique Grande Bustos ruled in a similar way. But these are isolated cases and we are still a long way from legislating against the Civil Code’s cited Article 1911.
The solution, regardless of these sporadic cases, is, as always in such cases, a problem of time and cost. But the result obtained, as common law says, can mean recovery, a second chance to operate in the market, or live without the heavy burden of having to take care of loans, credits, etc. to companies with guarantees for life by mortgaging a well-deserved retirement.