Malaga court grants debt relief of nearly 80,000 euros to freelancer who was dragged down by client’s bankruptcy

Monday, 28 April 2025, 11:31

A court in Malaga has granted the definitive discharge of unsatisfied debts to a self-employed entrepreneur who was dragged into insolvency following the non-payment and subsequent bankruptcy of his main client. The court decision means the legal forgiveness of a debt of more than 79,000 euros, including bank, tax and Social Security credits.

The debtor is a self-employed professional who was declared in voluntary bankruptcy proceedings without assets in February 2025, after proving he was unable to meet his financial obligations as a result of personally guaranteeing his company’s operations. An insolvency without assets is a proceeding in which there are no assets to be distributed among the creditors. What caused his insolvency was the bankruptcy of his biggest client and, therefore, of his main source of income.

The judge considered that all the requirements demanded by the insolvency law had been met and granted the definitve exoneration. There is only one part of the debt with the Tax Agency and the Social Security that he was not exempt from and has to, therefore, pay. The business owner was considered to be a debtor in good faith, with no relevant criminal or administrative record and without having been found responsible in any bankruptcy proceedings.

“The court states that the business owner acted transparently during the proceedings, collaborating with the justice system and without concealing assets or information. The ruling also confirms that the discharge applies to both reported and declared debts, provided they are not among those excluded by law,” said the insolvency victim’s lawyer Carlos Cómitre.

“With this decision, a process that began as an attempt to keep the company afloat in the face of the collapse of a key client, comes to an end. The exoneration will allow him to regain control of his finances, leaving behind a debt accumulated through no fault of his own, thanks to the second-chance mechanism provided for in Spanish insolvency law,” said the lawyer.

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