THE marital insolvency or personal insolvency of the couple results from the personal bankruptcy of both members. It is a delicate situation that can help solve financial problems, but it can also have negative psychological consequences.
What is meant by insolvency
Insolvency means the existence of a debtor, individual or company, with financial installments to be fulfilled that are higher than the income (or income) that it obtains. Therefore, failing to meet its financial obligations, it is insolvent.
Insolvency results from over-indebtedness
when the debts are big must consider renegotiate your credits or consolidate debts so that the monthly income is sufficient to meet the payments and, at the same time, have money for the monthly expenses. But it is not always possible. In case of over-indebtedness and default, these financial solutions are no longer applicable. Thus, it remains to enter into insolvency proceedings. This one too can be individual (personal insolvency) or couple (marital insolvency).
Before insolvency, try to enter a PEAP
The Special Payment Agreement Process (PEAP) is intended to natural persons who are in an economically difficult situation or in imminent insolvency.This process aims to promote the negotiation with the respective creditors in order to agree on a payment plan for personal debtswhich provides for the restructuring of the same, thus avoiding personal insolvency.How is a legal process has to run in court. It begins with the submission of an application by the debtor signed by the debtor and at least one of the creditors. With this, the negotiation process begins between the debtor’s lawyer and the creditors’ lawyers with the objective of obtaining a payment plan accepted by all.
debt restructuring
This one payment agreemento will be based on the restructuring of debts, which may provide for a reduction in monthly installments, extension of payment terms, reduction of interest, and even, eventually, a forgiveness of part of the debt capital. favorable votes of the creditors, being appointed a judicial administrator who will monitor compliance.
Rise of pledges
With the approval of the agreement, suspended all attachments and executive diligencess that exist against the debtor and the creditors cannot bring new actions for enforced debt collection. On the other hand, providers of essential services such as electricity, natural gas, water and telecommunications, cannot suspend their supply for non-paymentthroughout the time the negotiations are taking place.
personal insolvency
If the previous solution has not been reached within three months, or has not obtained the signature of any creditor for its presentation in court, the way forward is to file an insolvency proceeding in court through a lawyer. exoneration of the remaining liability or Thepresentation of Payment Plan. Heads up, both can be single or double.Also read: Attachment of bank accounts: What is it and how does it work?
What is meant by marital insolvency?
if both members of a couple are unable to meet their financial commitments may file for insolvency together. It is called marital insolvency or personal insolvency of the couple.Marital insolvency allows both present debtors with a payment plan for their debts or alternatively request the release of the remaining liability.the insolvency both can be requested by both the members of the couple (active coalition). However, it can also be requested by creditors.In marital insolvency common debts are broken downthat is, those that are the responsibility of both and the debts of each of the spouses.
Conditions for marital insolvency to be possible
In order for it to be possible to present the marital insolvency the couple must be married under a general community or acquired community regime and both members of the couple must be in a situation of insolvency.If they are married in property separation regime, as there are no commons there are also no common debts. Therefore, it is not possible to apply for marital insolvency.
Debts for each spouse
As a debt for which only one of the spouses is responsible we can refer, for example, to a debt contracted before marriage by one of them without the knowledge or consent of the other.
Common liability debts
These include debts incurred after marriage by either spouse to meet the burden of family lifeas well as loans taken out by both, such as mortgage loans.
Process of marital insolvency
The process can be requested by couple, by the Public Prosecutor’s Office or by one of the creditorsnamely by the bank that granted them the credit that they stopped paying and it was not possible to carry out the restructuring.For the presentation of the process, the court receives the identification of all creditors and amounts owed, common debts and individual debts as well as the identification of all the couple’s assets, movable and immovable, with the identification of whether they are common or individual assets (article 266 of the Insolvency and Business Recovery Code). couple may request the exoneration of the remaining liability.
Court declares marital insolvency
Analyzed the information it is up to the court to declare the couple’s personal insolvency and appoint an insolvency administrator. This has the function of verifying existing and claimed credits, as well as managing the assets of the debtors that will form part of the insolvent estate. These assets will be sold to pay creditors.
What does the exoneration of the remaining liability consist of?
The exoneration of the remaining liability is a mechanism that allows debt forgiveness when the couple’s assets are insufficient to pay the debts. The court will consider the application and may or may not approve it. In cases where the couple did not deliberately create or aggravate the couple’s personal insolvency situation or squander their assets, it tends to be approved.
Exoneration of debts after three years
After the court’s decision, a period of three years during which the couple will have to fulfill certain obligations so that at the end of these period the remaining debts are extinguished.So, for three years the members of the couple have to:Exercise a remunerated profession by declaring your salary;In case of unemployment, actively seek employment;They cannot hide any type of income they may earn;Deliver all amounts that exceed the amount set as minimum support to the fiduciary, so that he can proceed the payment of the costs of the insolvency proceedings and the payment of creditors. If they fulfill these obligations, after this period, all remaining amounts relating to debts covered by this mechanism are extinguished. But if they do not comply, the exoneration of debts ceases and the couple is responsible for paying them.
Amount equivalent to the minimum wage
During this period you can keep the equivalent to one minimum wage for each adult and half a minimum wage for each minor in their care. But any income you earn beyond these amounts will be automatically handed over to the insolvency manager to pay a little more of the outstanding debts.
Exoneration does not encompass all debts
In fact, there are debts that are not extinguished with the approval of the exoneration of the remaining liabilities. This is the case for debts to Social Security or Finance, fines and fines. These continue to exist, even if the exoneration is granted. However, there cannot be any attachment on the couple’s income (for three years) while the process of exoneration of the remaining liability is ongoing. But, after three years, the debts have to be settled. Read also: Personal insolvency: What is it, when and how to ask?