The Government has approved a series of measures that include the exemption of debts to individuals and SMEs through a bankruptcy procedure , although not against public credits, has removed the clauses floor to vulnerable groups and has supported bonuses to families and self-employed.
The Council of Ministers has approved several royal decrees, including the so-called ‘Second Chance’ whose purpose is to alleviate the debt of individuals in good faith and companies that can no longer deal with their creditors.
In addition, the Government has given the green light to a flat rate of 500 euros for new permanent contracts that will not pay Social Security contributions for two years.
A progressive type will be applied, so that the saving with respect to the contribution will be higher for the smaller salaries and then it will increase. The new reduced rate will force the employer to increase the number of permanent workers and the number of permanent workers and oblige them to keep the employment generated with the new contracts for at least three years. This aid to hiring is added to the bonus of 100% in Social Security contributions that the Government has also approved for self-employed workers who need to reduce working hours for the care of children under 7 years of age or family members in situations of dependency. that will mean a saving of 3,000 euros per year.
However, the star measure has been the Decree Law on Mechanism of Second Chance and Reduction of the Financial Burden and other Measures of Social Order that will allow through a bankruptcy process the exoneration of all the debts of companies and individuals, even if they are not covered with the totality of the goods. The objective is to reconcile the interests of creditors and debtors by means of procedures with guarantees that allow for the payment of debts in an orderly manner, through extrajudicial agreements with mediators that will be notaries or the Chambers of Commerce themselves.
The Government has indicated that the debts registered with the Public Administration will not be exempted. During the period of these negotiations the executions of goods necessary for the activity, including the habitual residence, are suspended . However, the Government has indicated that the debts registered with the Public Administration will not be exempted when it understands that public credits “are of everyone against the debtor”.
The minister of Economy, Luis de Guindos, has affirmed that these credits take their own methodology and added that they are not usually important for the physical persons and yes for business activities. Also, the Ministry of Economy considers that the loans of the banks will not be more expensive after the approval of the law of second chance, which, in his opinion, does not encourage the strategic insolvencies.
Economy has stressed that the regulation, which will be processed as a bill and may have changes during parliamentary process , does not intend a dation in selective payment, since the debtor does not choose the goods that suits him to liquidate when dealing with a global settlement of the heritage.
Within this decree law, the Government has increased protection to the most vulnerable groups , which will be excluded from the ground clauses of mortgage loans, while it has extended until 2017 the suspension of the evictions that expired in May of this year.
The code of good practices has already allowed to carry out 3,500 dations in payment It also contemplates that the annual rental limit be increased to qualify for the Code of Good Practices for mortgage debtors, which would go from 19,170 to 22,365 euros in 2015. The code of good practices has already allowed for 3,500 donations to be made in payment, and more than 2,000 families have taken refuge in the social housing fund, while more than 12,000 releases or evictions have been paralyzed.
De Guindos explained that it is about giving debtors a second chance in good faith , a process that has been possible because the situation of the Spanish economy has changed. Among the cases of special vulnerability will be those over 60 years old.
Another measure that has been approved by the Government is a tax deduction of 1,200 euros per year for single-parent families with two dependent children and for large families, or with disabled ascendants or descendants who are supported by pensioners or unemployed.
The PAH asks that creditors do not depend on
For its part, the Platform for Affected by Mortgages (PAH) has asked the Government that the decree law of second chance does not depend only on the will of the creditors and that “it is not another failure with a negligible impact on the situation of the families in foreclosure . “
In a statement, the PAH criticizes “opacity and total confusion” on the development of this decree law, whose content has not been explained.
“Since the PAH, after years presenting a proposal articulated through the popular legislative initiative in 2013, we fear that the government’s measures have too many limitations that make them ineffective and condemn them to failure again,” predicts the platform.
The impact of good practices of the government only got dations in payment for 0.7% of those affected After recalling the “absolute failure” of all measures implemented by the governments of the PP and the PSOE to stop evictions, the PAH has qualified of “ridiculous” the impact of the code of good practices promoted by the Government, which “has only achieved damages in payment for 0.7% of those affected”.
The PAH has requested that the announced second-chance law include without conditions the mortgage loan , which is currently excluded in the bankruptcy proceedings, since “it is the principal debt of the citizenry.”
“It has been demonstrated that second-chance mechanisms (such as extrajudicial procedures), when they depend on the will of financial institutions, are doomed to fail : being a mere procedure without any possibility of agreement, or simply a way that is not even start “, warns the PAH.
All people deserve a second chance
In addition, it wants that ” no type of restriction should be established for debtors in good faith , neither of an economic or social nature”, because “all persons in a situation of over-indebtedness who have contracted the loans in good faith deserve a second chance, independently of the family situation they have and the economic conditions of the credit “.
Likewise, the platform claims that “the mere request for the extrajudicial procedure temporarily suspends any execution of the affected party’s debts ” and that the nullity of the ground clauses extends to all the affected persons and supposes the obligation to return the amounts paid in application of the same.
It is a right of all citizens and can not be limited to cases of extreme need The PAH reminds the Government that the “second chance” is already provided for in most of the legal systems of European countries “and is a right of all citizens, and can not be limited to cases of extreme need and special vulnerability “.
“The insolvency occurred for thousands of families who were victims of the bursting of the housing bubble can not continue to be a condemnation of social exclusion and despair It is already well that the speculative interests of banks trample the right to housing of those affected “, concludes the PAH statement.