PRESS RELEASE: The 1st European Congress on Personal Insolvency held as the insolvency proceedings of individuals soar

• The Congress will have a blended format to facilitate maximum follow-up by both the European legal profession and other professionals as well as the public.
• This year, from January to June there were more than 7,000 personal insolvency proceedings. By the end of the year, 12,000 are expected to have begun, 41% more than in 2021.

Madrid, 27/10/2021. The president of the Spanish National Bar Council (CGAE), Victoria Ortega, and the president of the Barcelona Bar Association (ICAB), Mª Eugènia Gay, have introduced today in Madrid the 1st European Congress on Personal Insolvency. This is a pioneering initiative from ICAB to address the right of consumers and entrepreneurs to a second chance in front of insolvency problems. The Congress will be held on 17 and 18 November.

During the press conference, the president of  ICAB, Mª Eugènia Gay, emphasized that the Congress “responds to the challenge we face - as legal professionals and as a society - to offer a way out to those people who, suddenly and involuntarily, have been surprised by a situation of over-indebtedness-, and recalled that "for a tool like the Second Chance to be really useful and to be able to deploy all its undoubted benefits, it has to be known by all the people who participate in it ”, and as professionals of the Law and the entities representative of the different interests of civil society, we should be prepared and know the mechanisms of the legal ordering within our scope, and this is the motivation Congress ”.

The president of the CGAE, Victoria Ortega, recalled that when it comes to second chances "we are not just talking about the economy and the euro, but about societies, human lives, personal dreams and professional projects". That is why she stated: "we need laws that are sensitive to these situations and that really offer the possibility of a second chance", with "legal certainty".

Yvonne Pavía, Treasurer of the ICAB, also spoke at the introduction of the 1st European Congress on Personal Insolvency, announcing that the results of a study carried out by the Personal Insolvency Observatory will be presented during the event. This study has been created by ICAB, and it will offer a complete x-ray of this process.

At the event, Miquel Àngel Salazar, a member of the Personal Insolvency working group of the Regulatory Commission of the Barcelona Bar Association, warned that insolvency proceedings against individuals have skyrocketed since the beginning of 2021, reaching 7,125 in the period from January to June, while throughout the year 2020 there were 8,507. Salazar has considered that if this progression continues, by the end of 2021 a total of 12,000 procedures of this nature will have been initiated, 41% more than the previous year. He also explained that since the beginning of the year, the personal insolvency proceedings have exceeded those of legal entities, with the former accounting for 70% of those registered.

The second chance mechanism provides that in situations of insolvency by the debtor in good faith an out-of-court settlement may be reached with the creditors, and that, if this is not possible, prior to liquidation of their assets, cancelling debts. The personal Insolvency was introduced as Law 25/15 of 28 July, through the second chance mechanism, and is aimed at people who have been exposed to a situation of over-indebtedness

The second chance mechanism remains a very unknown process in our country, where the numbers of proceedings are well below the countries around us, such as France, where 108,000 proceedings were opened last year, or the United Kingdom, with 114,000, according to Salazar, who pointed out that in Spain there is still a "stigma towards the debtor".

To publicize the operation and benefits of its use, in the framework of the press conference the testimony of Alexandra Colomina was presented, who was at the head of a family business that went bankrupt and in 2016 began a second-chance procedure that culminated a year later with debt relief, which allowed him to resume business with a new business. “It’s important for people to know that there is this possibility, that it gives options to start new lives,” Colomina noted, adding, “It’s important to get advice from expert lawyers who take you by the hand and reassure you”.

1st European Congress on Personal Insolvency  

The 1st European Congress on Personal Insolvency will be held in Barcelona, ​​at the headquarters of the Barcelona Bar Association, on the 17th and 18th of November. It can also be followed online so that both European lawyers and professionals of different kinds as well as the general public can follow the legal, socio-economic panels and workshops to be held during the two days of the Congress. You can consult the detailed program at the following link. 

The 1st European Congress on Personal Insolvency aims to be a meeting point for all relevant actors in matters of personal insolvency and second chance (law, judiciary, university, public administrations, bar associations, social organizations...) not only nationally but at the European level; in order to analyze from the social, economic and legal aspects, the different sides related to insolvency (on the one hand, the processing of the Draft Law transposing the European Directive 2019/1023 on restructuring, and on the other, the causes, consequences and solutions of insolvency); and to promote a cultural change in the conception and legislative embodiment of all rules related to insolvencies and their possible solutions, to generate, thus, collective social dialogue that extends beyond the Congress itself.

The Congress, organized by ICAB, is in special collaboration with vLex and with the support of the Spanish National Bar Council (CGAE), the Catalan Bar Council (CICAC) and the institutions that are part of ' The Alliance' for a second chance. This Congress is possible thanks to the dedication of the Personal Insolvency Group, attached to the Regulatory Commission of the Barcelona Bar Association, and to the experience developed by the ICAB Training Department.