# Personal Insolvency



## Van17 (Mar 26, 2011)

Does anyone have any advice or knowledge re going insolvent in Spain?
If you declare yourself insolvent, are you still able to be self-employed, work, have a bank account etc?

Any advice for insolvency in Spain would be most welcome.


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## Morten (Apr 20, 2011)

Yes to all of them - in principle ... But you really really need professional help. An accountant or lawyer can help broker a deal with the creditors - based on your individual situation the creditors are very much interested in you working, functioning and maintaining the ability to repay whatever amounts the brokered deal entails.

But yes you can work - the creditors will want a cut though. Self-employed, believe so but not sure how that works. It might be difficult to get a bankaccount but its a matter of finding a "nice" bank, there is no law stopping it. Depends who your creditors are exactly how that might work, as embargos can be put on your accounts (freezing them and grabbing the money basically) - administratively by councils/state and via courts by others. If you are formally declared insolvent most banks will probably not want to give you anything but a basic account without any form of extras, cards etc. 

An option is to open an account in another country - with a card/netbanking...just in case.


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## Pesky Wesky (May 10, 2009)

I would have thought that being self employed would be a little difficult as you are expected to pay more than 250€ euros a month for the priviledge. I'm assuming that being insolvent really does mean not having _*any*_ money.


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## Morten (Apr 20, 2011)

Not in technical terms I believe Pesky - you can be insolvent with 100k in the bank and social on direct debit - if your debts are more than that. 

If say you have a 1mill mortgage in a house worth 500k - and a monthly income of 2k meaning you cant meet your 4k monthly outgoings. In such a situation the creditors are still likely to prefer you maintain your income, even though it involves the 250 in expenses - as a restructuring of outgoings would still give them some levels of repayments.


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## Pesky Wesky (May 10, 2009)

Morten said:


> Not in technical terms I believe Pesky - you can be insolvent with 100k in the bank and social on direct debit - if your debts are more than that.
> 
> If say you have a 1mill mortgage in a house worth 500k - and a monthly income of 2k meaning you cant meet your 4k monthly outgoings. In such a situation the creditors are still likely to prefer you maintain your income, even though it involves the 250 in expenses - as a restructuring of outgoings would still give them some levels of repayments.


Ok, I had my doubts.
Basically, you can have pots of money and declare yourself insolvent.


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## mepossem (May 28, 2011)

quite complicated. a fairly good article can be found here

Pros y contras de declararse insolvente

strange - 2nd time in 2 weeks someone asks me for info about it .....
maybe more interesting than criminal law?


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## Van17 (Mar 26, 2011)

mepossem said:


> quite complicated. a fairly good article can be found here
> 
> Pros y contras de declararse insolvente
> 
> ...



Dear mepossem
Thank you so much for the article which I read as best I could with my basic Spanish. The article still doesn't answer for me the questions I initially posed i.e can you still be self-employed, can you still have a bank account etc. Still baffled??


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## mepossem (May 28, 2011)

ok - I take it you are NOT the person in Málaga who asked me for information 

Best way round it is to start a small 'asociación' and put whatever money, cards etc. into that one - that way you can continue without any problem.

In principle there is NOTHING against you continuing as a 'por cta. propia' i.e. self employed. But as you can see if you check a little bit, the whole procedure is more thought for big companies rather than the small individual.... (I hasten to say I don' t know your height, but you get the idea ...).

Where do you live? If close to a big city, you should be able to go to the local court and ask more information there. Again, don t see immediately what purpose would be obtained.<snip>


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## Van17 (Mar 26, 2011)

Dear Morten
thank you so much for your detailed response. 
If you are self-employed and they freeze your account, you simply stop working and they (the creditors) don't get anything. So this seems like a strange action for a court etc to take. What do you think?


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## Van17 (Mar 26, 2011)

mepossem said:


> ok - I take it you are NOT the person in Málaga who asked me for information
> 
> Best way round it is to start a small 'asociación' and put whatever money, cards etc. into that one - that way you can continue without any problem.
> 
> ...


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## Pesky Wesky (May 10, 2009)

Van17 said:


> . What do you think?


I think you'll need a gestor or lawyer to become officially insolvent so you might as well go and get one right away so you can get all of this information directly from a professional, no offence intended.


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## Morten (Apr 20, 2011)

Pesky Wesky said:


> I think you'll need a gestor or lawyer to become officially insolvent so you might as well go and get one right away so you can get all of this information directly from a professional, no offence intended.


Absolutely - take a deep breath, go to a gestor/lawyer/accountant, lay all cards on the table and get solid advice. Its way too serious to rely solely on forum replies and google searches etc (and these things are so individual anyway that even a generally correct advice might not apply to you specifically) - what you need is a guy on your side, who can help you create a plan forward with agreement of the creditors.

That said - yes an embargo on an account may be quite disruptive to you - but if your lawyer/gestor/accountant manages to broker you a deal with the creditors - and you stick to it, nobody will embargo you.


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## xabiaxica (Jun 23, 2009)

Pesky Wesky said:


> I think you'll need a gestor or lawyer to become officially insolvent so you might as well go and get one right away so you can get all of this information directly from a professional, no offence intended.


totally agree - for something like this you certainly need proper professional advice


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