Debt restructuring must not be confused with corporate restructuring, which changes the company’s legal structure (mergers, demergers, holding companies) rather than its debt.
Who we help
- Companies with cash-flow problems that want to restructure their debt before they become insolvent.
- Directors who do not know whether they must file for insolvency, within what period, and what liability they take on.
- Companies already in insolvency proceedings, or about to file, that need a strategy and support.
- Micro-businesses that want to understand the special procedure provided for them.
When it makes sense
- The company expects it will not be able to meet its payments over the coming months.
- There are attachments, claims or defaults affecting suppliers, Social Security, the tax authorities or employees.
- The directors are unsure whether the company is already insolvent and what they must do.
- You want to negotiate with banks or creditors a restructuring plan.
- The business may be viable and what is needed is to put its debt in order.
What the engagement can include
- Diagnosis of the situation: whether there is a likelihood of insolvency, imminent insolvency or actual insolvency, and which legal deadlines are running.
- Strategy: negotiation with creditors, notifying the court that negotiations have opened, a restructuring plan, the special procedure for micro-businesses or insolvency proceedings.
- Preparing the plan and the documents each route requires.
- Filing for insolvency, when it is compulsory or the most suitable option.
- Advice to directors on their liability, which we handle together with directors’ liability.
- Coordination with advisers, banks and creditors and, where appropriate, the orderly closure of the company.
What the scope depends on
- The size of the company: micro-businesses have a special procedure.
- The type and amount of debt: bank, supplier, public authority or employee debt.
- The number of creditors and how willing they are to negotiate.
- The urgency: some statutory deadlines cannot wait.
- Whether the business can continue or liquidation is preferable.
Once we have studied the documents, we send you a quote tailored to your case.
How we work
- Initial contact. You tell us about your situation and send us the documents.
- Review of the documents and proposals. We study the accounting documents and the debts and set out the possible routes: negotiation with creditors, a restructuring plan, the special procedure or insolvency proceedings.
- Quote and letter of engagement. We send you the quote and the letter of engagement in writing.
- Implementation and follow-up. We see the procedure through to the end and coordinate with your tax adviser or accountants (gestoría), the creditors, the court and the registries.
Who handles your matter
Your matter is handled directly by Sara González Domínguez, a practising lawyer (abogada) registered with the Málaga Bar Association (no. 8502), an insolvency practitioner and insolvency expert, whose practice focuses on Spanish company and commercial law, always backed by the rest of the firm’s team.
If the right way out is to close the company in an orderly way, we handle it through our company liquidation and closure service.
Illustrative example: a renovation company in Cártama, with eight employees, has built up debts to suppliers and the tax authorities that it cannot pay when they fall due. We check whether it meets the requirements of a micro-business, notify the court that negotiations have opened and prepare with the creditors a continuation plan that lets it keep working while the restructured debt is paid.
Frequently asked questions
What are insolvency proceedings in Spain?
They are the court procedure opened when a debtor, an individual or a company, cannot regularly meet its obligations. They are governed by the consolidated text of the Insolvency Act, reformed by Law 16/2022. Their aim is to satisfy the creditors, through a composition agreement or an orderly liquidation, under the supervision of a judge and of insolvency practitioners.
When must a company file for insolvency?
The debtor must file within two months of the date on which it knew, or should have known, of its actual insolvency, which means being unable to regularly meet its due obligations (articles 2 and 5). It is presumed to know when events occur that would allow a creditor to petition, such as general attachments or widespread defaults. Insolvency is imminent if it foresees that it will not be able to pay over the next three months.
What is the difference between voluntary and compulsory insolvency?
Voluntary proceedings are the ones the debtor itself files for and compulsory ones are those requested by creditors or others entitled to. It matters because in voluntary proceedings the debtor keeps its powers of administration and disposal, subject to the supervision of the insolvency practitioner, while in compulsory ones those powers are suspended and the practitioner replaces it. The judge may order the opposite, giving reasons (article 106).
What happens when a company enters insolvency proceedings?
The judge issues the order declaring insolvency, appoints insolvency practitioners, sets the effects on the debtor’s powers and calls on creditors to report their claims within one month of publication in the Official State Gazette (article 28). A composition agreement with the creditors is then pursued or, if that is not possible, the assets are liquidated to pay the debts.
What is a restructuring plan?
It is an agreement with creditors to modify the company’s debt or structure and overcome its situation. It is available where there is a likelihood of insolvency, imminent insolvency or actual insolvency. There is a likelihood of insolvency when it is objectively foreseeable that, without a plan, the debtor will not be able to meet the obligations falling due over the next two years (article 584). Notifying the court that negotiations with creditors are under way is for the company’s management body (article 585).
I have no money to file for insolvency. What can I do?
Lack of money does not remove the duty to file. If the company has no attachable assets, or realising them would cost more than they are worth, the law provides for insolvency without assets (article 37 bis): the judge declares it with minimal formalities and an insolvency practitioner is appointed, to report, only if creditors representing at least five per cent of the liabilities ask for one (article 37 ter).
What liability do directors have if they do not file?
Failing to file is presumed to make the insolvency culpable, unless proved otherwise (article 444). Insolvency is culpable when intent or gross negligence on the part of the directors has contributed to creating or worsening it (article 442). There is also liability for the company’s debts if no action is taken once a ground for dissolution arises, as we explain on our page on directors’ liability.
What is a micro-business for the special procedure?
It is a debtor, an individual or a company, carrying on a business or professional activity that employed fewer than ten people on average in the previous year and had an annual turnover below 700,000 euros or liabilities below 350,000 euros (article 685). A special procedure applies to them, with a continuation plan or liquidation, which is simpler than general insolvency proceedings.