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DEBT DISCHARGE IN SPAIN: WHICH OBLIGATIONS ARE NOT ERASED UNDER THE SECOND CHANCE SCHEME?

Por Diego Ricardo Molinari Chiarappa / 16 de octubre de 2025

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📎 Debt discharge in Spain: Which obligations are not erased under the second chance scheme?
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👉 Which debts are not forgiven under the individual debt discharge? The case of Tax Authorities and other excluded obligations
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💬Debt discharge for insolvent individuals, also known as the “second chance” scheme, has been one of the most significant advances in Spanish Bankruptcy Law. However, this mechanism is not absolute. Certain obligations, due to their nature or social relevance, are excluded from forgiveness. In this note, we analyze which debts are non-dischargeable, with particular attention to obligations to Tax Authorities, Social Security, and other sensitive categories. ✍️
Legal framework: Bankruptcy Law and the Benefit of Discharge of Unsatisfied Liabilities (BEPI)
The Bankruptcy Law, in its consolidated text approved by Royal Legislative Decree 1/2020, regulates the procedure through which an individual can request debt discharge. This benefit, known as BEPI, allows the debtor to be released from obligations after fulfilling certain requirements, such as liquidating assets or complying with a payment plan.
However, the legislator has established clear limits. Not all debts can be forgiven, and some are explicitly excluded for reasons of public interest, social justice, or protection of third parties.
Excluded claims: Which debts are not forgiven?
1. Public Law Claims
Public law claims, which include debts to the Tax Authorities (Hacienda) and Social Security, are the most relevant in terms of exclusion. Spanish regulations establish that these debts cannot be fully discharged. In some cases, partial forgiveness is allowed, limited to a maximum of €10,000, but the remainder must be paid by the debtor.
This exclusion is based on the need to protect public revenues, essential for maintaining the State and its services. Additionally, forgiving these debts could create a perverse incentive for tax noncompliance.
2. Alimony and child support obligations
Debts arising from alimony or court-ordered maintenance obligations are also excluded. The reason is clear: these are fundamental rights of vulnerable individuals, such as children or former partners, which cannot be left unprotected by the debtor’s insolvency.
3. Debts resulting from criminal offenses
Compensations for civil liability arising from crimes are also not forgiven. If a debtor has been criminally convicted and must compensate a victim, that obligation remains intact even if the debtor accesses the second chance mechanism.
4. Serious non-contractual liability
In cases where the debtor has caused damage outside of a contractual context —for example, through gross negligence or willful misconduct— the corresponding indemnities are not discharged. This follows the principle that the person causing harm must repair it, regardless of their financial situation.
5. Severe administrative penalties
Fines or penalties imposed by the Administration for serious or very serious infractions are also excluded. This includes, for example, tax or Social Security penalties confirmed by a final resolution.
What about unpaid wages?
In the case of wages owed by the debtor —for example, if they are a business owner or self-employed— these labor claims receive preferential treatment. Affected workers can apply to the Wage Guarantee Fund (FOGASA), but if the debtor enters bankruptcy, these claims are considered priority within the bankruptcy estate. However, if they cannot be satisfied due to lack of assets, they are not discharged: the debtor remains obliged to pay them.
Recent jurisprudence: European endorsement of the exclusion of public claims
A recent ruling by the Court of Justice of the European Union (CJEU) confirmed that member states can exclude public claims from debt discharge, provided it is justified and proportionate. In Spain, the CJEU upheld the legislation limiting debt forgiveness for Tax Authorities and Social Security, considering it compliant with the principles of the European Insolvency Directive.
Conclusion
Debt discharge is a powerful tool for individuals to restart their economic life after insolvency. However, it is not a complete wipeout. Obligations to Tax Authorities, Social Security, alimony, criminal compensations, and other sensitive debts remain excluded from forgiveness.
Knowing these exclusions is essential for anyone considering the second chance mechanism. Transparency, good faith, and compliance with legal requirements are key to accessing this benefit without false expectations.
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In summary, our Civil Online process offers the convenience and flexibility to complete the entire procedure from the comfort of your home, without needing to visit our offices or the courts (except for mandatory procedures). With access to your personal account on our online platform, you can upload documents, receive notifications, communicate with your lawyer, and track your case progress in real time. At MCHM Lawyers, we are committed to providing you the best possible service throughout the Civil process.
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⚓️ second chance, debt discharge, bankruptcy law, public claims, Tax Authorities, Social Security, alimony, civil liability, administrative penalties, non-dischargeable debts, personal insolvency, excluded obligations, social justice, payment plan, limited benefits

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