ICAM Launches the Second Chance Observatory

The Madrid Bar Association (ICAM) unveiled its “Second Chance Observatory” this week, along with a comprehensive report on the proceedings of individuals benefiting from the second chance mechanism. This initiative allows individual debtors to eliminate some or all of their debts.

The observatory is established as a scientific body to address the growing needs stemming from the substantial increase in second chance procedures in the post-COVID era, exacerbated by the crisis resulting from the surge in prices due to the Ukraine conflict, as explained by its president, lawyer José Mª Puelles Valencia.

Currently, 75% of the bankruptcy proceedings filed in the country involve individual debtors, and there is a forecast that this number will rise in the coming years. This underscores the extraordinary importance of this matter, especially considering the significant societal and economic impact. The inaugural event featured the “Report on the State of Second Chance in the Community of Madrid,” highlighting the limited use of this mechanism in the region, despite its usefulness for those affected.

The study reveals that the percentage of bankruptcy filings by individuals in Madrid is lower than in comparable regions in terms of population and GDP. In absolute terms, the number of procedures is considerably lower than in Catalonia and Valencia, as well as in Andalusia when considering the percentage in relation to its population.

The Second Chance Law (Law 25/2015, of July 28, on the second chance mechanism, reduction of financial burden, and other social measures) allows individual debtors to eliminate some or all of their debts. The launch event saw the participation of key figures, including José Ramón Couso, 2nd Deputy of the ICAM Board; Cayetana Lado Castro-Rial, State Attorney, Director of Legal Affairs, and Secretary of the Board at ICO; Martí Batllori Bas, lawyer and member of the Advisory Board of the Second Chance Observatory of the ICAM; and Javier Vaquer Martin, Judge of Commercial Court No. 6 in Madrid.