Following the continuous updates issued by this firm in relation to COVID-19, we inform you in this newsletter of a matter of special interest in these times: the Bankruptcy Law.
To this end, we bring to your attention Article 43 of Royal Decree Law 8/2020 of 17 March, which deals with the time limit for the duty to apply for bankruptcy, adapted to the exceptional circumstances we are experiencing.
Therefore, while the state of alert is in force, the debtor who is in a state of insolvency will not have the duty to request the declaration of bankruptcy, until 2 months have passed since the end of the state of alert.
In this line, it has been established that the judges will not admit for processing the compulsory insolvency applications that were presented during this state or that are presented during these 2 months.
And if the application for a voluntary insolvency has been submitted, it will be admitted for processing, with preference, even if it is at a later date.
On the other hand, it is important to take into account that while the state of alert is in force, the debtor who has communicated to the competent court for the declaration of the bankruptcy, the initiation of negotiations with the creditors in order to (i) reach a refinancing agreement or (ii) an extrajudicial payment agreement or (iii) to obtain adhesions to an anticipated proposal of agreement, even if the period of 3 months referred to in the fifth paragraph of Article 5 bis of Law 22/2003, of 9 July, Bankruptcy, will not have the duty to request the declaration of bankruptcy either.
We will continue to inform you of any new legislative developments related to the effects of the COVID-19, which we believe may be of your interest.
If you have any queries related to the effects of COVID-19, please do not hesitate to contact this firm by e-mail at firstname.lastname@example.org.