Luis Prados Ramos



The bankruptcy is a legal proceeding that takes place when any debtor is a natural or legal person. is in a state of insolvency, that is, it cannot regularly meet its enforceable obligations. (article 2 LC).

Legally, the bankruptcy is a collective execution procedure, whose objective is to organize the bankrupt's finances to ensure that the largest number of creditors collect the maximum amount of money possible, under the principle of par conditio creditorum, safe from the rights of privileged creditors. 


The competition procedure is divided into six sections in each of which, the actions of each of them are ordered, being able to open as many separate pieces as necessary or convenient:

Specifically, the sections referred to in article 183 of Bankruptcy Law 22/2003 are the following:

1.- The first section will include everything related to the declaration of bankruptcy, precautionary measures, the final resolution of the common phase, the conclusion and, where appropriate, the reopening of the bankruptcy.

2.- The second section will include everything related to the bankruptcy administration of the bankruptcy, the appointment and statute of the bankruptcy administrators, the determination of their powers and their exercise, the rendering of accounts and, where appropriate, the responsibility of the insolvency administrators.

3.- The third section will include everything related to the determination of the active mass, the authorizations for the alienation of assets and rights of the active mass, the substantiation, decision and execution of reintegration and reduction actions, and the mass debts.

4.- The fourth section will include everything related to the determination of the passive mass, the communication, recognition, graduation and classification of bankruptcy credits and the payment of creditors. This section will also include, in a separate piece, the declaratory judgments against the debtor that would have accumulated to the bankruptcy and the executions that begin or resume against the bankrupt.

5.- The fifth section will include what is related to the agreement and settlement, including early settlement and early settlement.

6.- The sixth section will include everything related to the qualification of the contest and its effects.

Also, the bankruptcy law speaks of some phases of the bankruptcy in which the six previous sections are usually summarized, such as:

1.- The common phase;

2.- The agreement phase;

and 3.- The liquidation phase (if applicable).

common phase, would include sections 1, 2, 3 and 4, and includes from the declaration of bankruptcy, the appointment of bankruptcy administrators, and the determination of both active and passive mass (all challenges to credits, their classification are processed in this section , asset valuation, etc.).

The agreement phase, it would be included in section 5, if the bankruptcy does not enter the liquidation phase beforehand, once the liability has been determined, with the identification of all the creditors and the classification of each one of them, since only then can they be computed the adhesions or not to the agreement and its approval based on the regime of majorities required in the next piece or section of that agreement rate, which is the approval, or not, of the agreement that, if applicable, the debtor has proposed.

The third phase, liquidation, would also be included in section 5, and will only take place in the event that the agreement proposed by the debtor is not approved, or if approved, it is not fulfilled in the agreed terms.

In this case, the administration will proceed to liquidate all the property, assets and rights of the debtor in order to liquidate the credits pro rata with its proceeds to the extent possible and with respect to both the privileges that have been previously recognized in the common phase.

Arrived at the liquidation phase, the section or the qualifying piece of the contest, in which and with the intervention of the Public Prosecutor, the actions of the debtor or its managers or administrators in the case of legal persons will be prosecuted to determine the causes and reasons that have led the debtor to not be able to comply with its obligations.

If no type of responsibility is appreciated in the management, the fortuitous bankruptcy will be declared and no responsibility will be derived from the managers or administrators. In case of appraisal of fault or negligence, the degree of responsibility of those administrators and managers and the patrimonial derivations of responsibility that proceed will be determined, especially the so-called liability for the bankruptcy deficit.

Finally there is a last section, resolution or completion of the bankruptcy procedure itself.

As a brief outline we have made this table.

SECTION 1 Contest declaration
SECTION 2 Appointment of administrators
SECTION 3 Determination of the active mass
SECTION 4 Determination of the passive mass and classification of credits
Bankruptcy administration report
SECTION 5 you take away and wait
Due to lack of agreement or non-compliance


For our purposes, we will consider a debtor in bankruptcy to be the one, with respect to whom, prior accreditation of the necessary legal conditions, has been declared as such. by virtue of a court order (which according to article 21 LC will open the common bankruptcy processing phase, which will include the actions provided for in the first four titles of the bankruptcy law and which will be executive, even if it is not final).

Only at this moment are we going to consider a person as bankrupt, since from here the effects of a bankruptcy proceeding are produced.

In the absence of a declaration of bankruptcy, the limiting effects for the debtor's capacity do not apply, which we will see later, not even in the event that an out-of-court payment agreement has been attempted and a bankruptcy mediator has been appointed. (vid.- DGRN Resolution of October 22, 2018)


The powers of the bankrupt debtor in order to administer and dispose of his assets vary according to the phase or state of the bankruptcy proceeding in question.


Thus, and synthetically, during common phase:

1.- In the case of voluntary contest, the debtor will retain the powers of administration and disposal of his assets, the exercise of these being subject to the intervention of the bankruptcy administrators, through their authorization or agreement (article 40.1 LC)

2.- For the case of necessary contest, the debtor is deprived of the aforementioned powers of administration and disposition of his assets, which will correspond to the bankruptcy administration (article 40.2 LC)

The main difference between the two situations lies in the initiative of the administration of the patrimony of the bankrupt, since in the case of voluntary contest corresponds to the debtor (without prejudice to the intervention of the insolvency administrators), while in the case of necessary contest the debtor lacks powers of administration and disposition of his assets, being replaced by the bankruptcy administrators

3.1.1.- The general rule of judicial authorization.

During the common phase, and until judicial approval of the agreement or the opening of the liquidation, The assets and rights that make up the active mass may not be disposed of or encumbered without the authorization of the judge. (article 43.2 LC).

But, a sensu contrario, with judicial authorization, the truth is that there is no limitation in the Bankruptcy Law regarding the type of legal business that can be formalized during that phase or in terms of the form thereof.

Thus, the alienation and encumbrance of bankruptcy assets can be done directly and without adjusting to any special procedure, as if it happens in the liquidation phase.

More specifically, the Bankruptcy Law provides, as indicated in the DGRN Resolution of December 2, 2019, the possibility of carrying out during the common phase of the bankruptcy (...) alienations or transfers of assets (articles 43, sections 2 and 3) acquisitions, assignments of assets or rights, incurring new debts and obligations (articles 84.2.5.º and.9.º) and, finally, constitute all kinds of guarantees to ensure compliance with the obligations contracted by the debtor, both before and during the bankruptcy procedure, and specifically constitute a mortgage on the assets that make up the active mass (articles 43.2, 82.2 and 3 and 84.4). In short, all kinds of dispositive acts can be carried out complying with the requirements established by the bankruptcy legislation, specifically judicial authorization (article 43.2), with the exceptions that the same precept establishes.”

3.1.2.- Exceptions to judicial authorization.

In the common phase, judicial authorization may not be necessary for the alienation and encumbrance of bankruptcy assets, in the following cases (article 43.3 LC):

1. The acts of disposition that the bankruptcy administration considers essential to guarantee the viability of the company or the treasury needs that the continuity of the bankruptcy requires.

2. The acts of disposition of goods that are not necessary for the continuity of the activity when offers are presented that substantially coincide with the value that has been given to them in the inventory.

3rd disposition acts inherent to the continuation of the professional or business activity of the debtor.

With respect to this last case, it should be noted that the Resolution of the DGRN of June 8, 2010, indicated that the declaration of the administrators is enough if said authorization is not necessary, since it is a necessary act for the business activity of the insolvent company, without the need for accreditation of any kind.


During the agreement phase, with respect to the assets that are not included in the agreement (and even with respect to these, in the form and measure determined by the former), the debtor recovers all of the dispositive powers, since as provided in article 133.2 of the Bankruptcy Law:

«From the effectiveness of the agreement, all the effects of the declaration of bankruptcy will cease, being replaced by those that, where appropriate, are established in the agreement itself, except for the duties of collaboration and information established in article 42, which will subsist until the conclusion of the procedure”.

In addition, as stated in Article 137 LC:-

1.- The agreement may establish measures prohibiting or limiting the exercise of the debtor's powers of administration and disposition. Its infraction will constitute a breach of the agreement, the declaration of which may be requested from the judge by any creditor.

2.-The prohibitive or limiting measures will be registered in the corresponding public registries and, in particular, in those that appear registered the assets or rights affected by them. The inscription will not prevent access to the public records of contrary acts, but it will harm any registered owner the action of reintegration of the mass that, in its case, is exercised.

Therefore, with the approval of the agreement, the intervention or suspension of the debtor's patrimonial powers and, in general, the limitations on his professional or business activity established, among others, in articles 43, 44 and 155 of the Bankruptcy Law, and the measures provided for in the agreement come into force and will subsist as long as the bankruptcy is not concluded, since as the DGRN has repeatedly stated (Resolutions of March 2 and December 13, 2013), the current legal regulation results that the existence of an agreement duly approved by the judge does not put an end to the bankruptcy procedure, which will only end when so declared by the Commercial Judge himself by order in which compliance is declared (article 176 of the Bankruptcy Law).

The DGRN has referred to this issue of the debtor's powers in the agreement phase on several occasions, especially to certain limits of the agreement, with respect to dations in payment referred to in articles 100.3 and 155.4 of the Bankruptcy Law, as is the case of the Resolution of August 6, 2019.

Article 100.3 LC (...) subject to modification by Law 38/2011, of October 10, establishes that

"In no case may the proposal consist of the assignment of assets and rights to creditors in payment or for payment of their credits with the exception of the case provided for in article 155.4, nor in any form of global liquidation of the bankrupt's assets for satisfaction of their debts, nor in the alteration of the classification of credits established by law, nor of the amount of the same established in the procedure, without prejudice to the reductions that could be agreed and the possibility of merger, division or global assignment of assets and liabilities of the insolvent legal entity”.

And in a very similar way, the original wording of this precept was pronounced, which provided the following in relation to the agreement:

"In no case may the proposal consist of the assignment of assets and rights to creditors in payment or for payment of their credits, nor in any form of global liquidation of the assets of the bankrupt to satisfy their debts (...)".

These legal limitations to the agreement and the remission that is made to article 155.4 LC requires that the realization, in any state of the contest (and therefore in the agreement phase) of the assets and rights affected by credits with special privileges will be made, as a general rule, at auction, although we will refer to this issue later when dealing with the liquidation phase.


During the liquidation phase, qualified by the Exposition of Motives of the Bankruptcy Law as a subsidiary solution, given the more severe effects it produces, which operates when the agreement is not reached or frustrated, not only is the debtor subject to the regime of suspension of the exercise of their powers of administration and disposal of their assets (article 145.1), but also the kind of legal transactions that can be formalized during this phase are notably more restrictive than during the common phase of the bankruptcy.

Indeed, once the liquidation phase is open, the essential operation that is carried out is the realization of the assets and rights included in the active mass of the bankruptcy, either in accordance with the liquidation plan approved by the bankruptcy judge (article 148 of the Bankruptcy Law), well in accordance with the supplementary legal rules  (Article 149 of the Bankruptcy Law), in order to proceed with the proceeds to pay the creditors in the terms and in the order that result from articles 154 and following of the same law.

Consequently, the liquidation or realization of assets and rights that make up the active mass of the bankruptcy, on the one hand, as well as the payment of credits (both credits against the mass and bankruptcy credits), on the other, are the two operations that have place during the bankruptcy liquidation phase.

The realization of the debtor's assets is regulated in articles 146 bis and ss LC. The general rule is that the bankrupt's assets and rights will be disposed of, according to their nature, in accordance with the provisions contained in the liquidation plan and, failing that, by the provisions established in the Civil Procedure Law for enforcement proceedings (article 149.2 LC).

Notable specialties during the liquidation phase would be the following:

3.3.1.- Disposal of assets subject to credits with special privilege.

In advance, it should be noted that in accordance with article 57.3 LC, and with respect to foreclosures of real guarantees, that "once the liquidation phase is open, creditors who had not exercised these actions before the declaration of bankruptcy will lose the right to do so in separate procedure. The actions that have been suspended as a result of the declaration of bankruptcy will be resumed, accumulating to the collective execution procedure as a separate piece.

In this liquidation phase, creditors with real guarantees lose the right to enforce their guarantee in a separate procedure, and must join the liquidation process.

The alienation of such assets, as provided in article 155.4 LC (as we have said before in any state of the contest and therefore also in the agreement phase) It will be done at auction, unless, at the request of the bankruptcy administration or the creditor with special privilege within the agreement, the judge authorizes the direct sale or assignment in payment or for payment to the privileged creditor or the person designated by him, provided that with this the special privilege is completely satisfied, or, as the case may be, the rest of the credit recognized within the contest remains with the corresponding qualification.

And add the second paragraph of this article 155.4 LC if the realization is carried out outside the agreement, the offeror must pay a price higher than the minimum that had been agreed and with cash payment, unless the bankrupt and the creditor with special privileges state Expressly accepting for a lower price, as long as said realizations are made at market value according to updated official appraisal by an approved entity in the case of real estate and valuation by a specialized entity for personal property.

The judicial authorization and its conditions will be announced with the same publicity that corresponds to the auction of the property and right affected and if within the ten days following the last of the announcements the highest bidder is presented, the judge will open a tender among all the bidders and will agree the security they have to provide.

As the DGRN has indicated in a resolution of January 10, 2017, following, alluding to the Supreme Court Judgment of July 23, 2013, followed by others such as those of July 23, 2017, November 27, 2017, and June 4. of 2019, the rules contained in the Bankruptcy Law for the alienation of the asset on which the real right of guarantee falls (articles 149.2 and 155.4 of the Bankruptcy Law) have an imperative character and the liquidation plan must necessarily adjust to them, imperative rules that also apply in the absence of approval of the liquidation plan.

As a consequence of this, the sale of real estate must be carried out by force, by auction, unless the bankruptcy judge has authorized the direct sale, either by approving a liquidation plan or specifically for that act.

And on the other hand, a direct sale of assets of the bankrupt must have the judicial resolution that authorizes it, either the express one for that sale or the general approval of the liquidation plan that includes it.

Therefore, there are three assumptions that this precept raises for the alienation of assets subject to some special privilege:

a.- Sale by public auction, in accordance with the provisions of the Civil Procedure Law for the enforcement procedure. In this case, the authorization or consent of the owner of the cargo affects the property is not necessary.

It is possible that the liquidation plan provides for the liquidation of the assets through a notarial auction, but if so agreed, the DRRN Resolution of January 2, 2019 has indicated that the procedures are imperative, and must be processed in accordance with those established in Articles 72 et seq. of the Notary Law.

b.- Direct sale with judicial authorization, provided that the amount obtained covers the entire special privilege. In this case, it will be necessary to prove the publicity of the sale authorization and the knowledge of the creditor with special privilege.

c.- Direct sale with judicial authorization, but whose amount does not cover the entirety of the special privilege. In this case, it will be necessary to prove the publicity of the sale authorization, that it is carried out at a market price, and that there is an express agreement between the debtor and the holder of the registered guarantee.

As indicated in the aforementioned DGRN resolution of September 11, 2017, from the indicated regulations (articles 149.2 and 155.4 LC) the will of the legislator is clear, in the case of realization outside the agreement of assets encumbered with a pledge or mortgage (and given the special condition of the asset subject to these security rights), to make it difficult to realize such assets for a lower price than the appraisal price set by mutual agreement between the parties at the time of constitution of the real guarantee, so that the realization by said lower price requires the consent of the lender with special privilege.

3.3.2.- Sale of assets within the framework of a business unit.

The sale of such assets is included in article 149 LC, which, as we have said, refers to the legal liquidation rules, establishing as a rule:

a.- The sale will be carried out as a whole, unless the judge deems it more convenient to carry it out separately.

b.- The sale will be carried out by public auction, unless the judge deems another modality more convenient.

c.- And in the event that the assets belonging to the business unit are subject to real guarantees, as a qualification to article 155.4, if they are sold for an amount that does not reach the value of the guarantee, calculated in accordance with the provisions of Article 94 will require creditors with special privileges who have the right of separate enforcement to express their agreement to the transfer, that represent at least 75 percent of the liabilities of this nature affected by the transmission and that belong to the same class, according to the determination of article 94.2.

As in many other aspects of the law, in the case of multiple parties affected, the law excludes the rule of unanimity between the parties, typical of the modification of any contract, by majority rule.

3.3.3.- Mortgages in liquidation phase.

As we have previously indicated, the two operations that take place during the bankruptcy liquidation phase are, on the one hand, the liquidation or realization of assets and rights that make up the active mass of the bankruptcy, and on the other hand, the payment of credits ( both credits against the mass and bankruptcy credits.

In principle, the constitution of a mortgage, such as the acquisition of assets or the constitution of real rights over them, cannot be configured as liquidation operations, insofar as they exceed the purpose of ending the procedure, which is the proper from the same.

In addition, the constitution of mortgages could alter the principle of the par condition creditorum, an aspect that, as we have said at the beginning of these lines, must preside over the entire bankruptcy procedure, and which implies that the recognition and classification of the credits is carried out according to their condition at the time of the declaration of the bankruptcy.

Despite this, and based on the aforementioned criteria for action, the DGRN on December 2, 2019, admitted the constitution of a mortgage by a natural person, declared bankrupt and in the liquidation phase.

In any case, we do not believe that a general doctrine can be extracted from this resolution, since it was a mortgage, which was presented to be registered, after the order of conclusion of the bankruptcy was issued, and the mortgage loan was essential to pay to the creditors and thus conclude the bankruptcy.


4.1.- The general rule.

In accordance with article 149.5 LC In the order of approval of the auction or of the transmission of the goods or rights carried out either separately, in lots or as part of a company or productive unit, the judge will agree the cancellation of all charges prior to the contest constituted in favor of of bankruptcy credits, except those that enjoy a special privilege in accordance with article 90 and have been transmitted to the purchaser with subsistence of the lien.”

It is interesting to note that the injunction can be extended to the cancellation of all previous charges, even in guarantee of credits that have not been part of the passive mass of the contest.

4.2.- Non-debtor mortgagees.

In the event that any of the bankrupt's debts were guaranteed by a bond or by a mortgage on the assets of a third party, we must differentiate, depending on whether the bankruptcy is a natural or legal person, anticipating that in principle the resolutions of the bankruptcy they are foreign

4.2.1.- In the case of a legal person according to article 178.3 of the Bankruptcy Law, "the judicial decision that declares the conclusion of the bankruptcy due to liquidation or insufficient active mass of the legal person debtor will agree to its extinction and will order the cancellation of its registration in the corresponding public records, for which purpose an order will be issued containing testimony of the final resolution.

The DGRN in Resolutions of December 14, 2016 and March 10, 2017, is inclined towards the position that the conclusion of the contest by heliquidation or insufficient active massgoes will lead to the extinction of the legal person and the cancellation of its registration, but this does not mean that there is an extinction, via forgiveness, of the debts of the company, nor that the assets that remain in the name of the company become «res nullius.

Not producing an extinction of the obligations not satisfied within the contest, the responsibility of third parties continues, in principle, fully in force.

4.2..2.- Things change when the debtor is a natural person, because for them article 178 bis LC, allows them to obtain the benefit of the exoneration of the unsatisfied liability.

For this reason, it has been raised at the doctrinal level, whether this benefit is cause for the extinction of the obligations, because if so, due to the principle of accessory (article 1847 CC) the guarantees should also be extinguished.

The truth is that article 178 bis is not a paragon of clarity, as the jurisprudence has recognized, since it speaks of extinction of credits.

The DGRN in Resolution of December 10, 2019, in a teleological interpretation of the benefit of exoneration of liabilities, indicates that an extension of the benefit to the non-debtor mortgagee would be alien to the purpose of the regulation, and therefore it does not extend to the guarantor or guarantor, because the purpose of the rule is to provide the debtor with a second chance and because the equitable interest of creditors must also be respected.

Adding that it should not be forgotten that, since it is not the bankrupt's property, it cannot be part of the active mass, so the mortgagee could not bring the action in the bankruptcy proceeding because the bankruptcy judge is not competent to process it ( Article 8 Bankruptcy Law).

The consequence of this resolution is that the cancellation of a mortgage constituted by a non-debtor mortgagor, when the latter has benefited from the exoneration of the liability, cannot be done through an application, accompanied by the judicial testimony of the order in which the exoneration of the passive, specifying the deed of cancellation.


It must be proven before a Notary and Registrar that the sale and encumbrance of the bankruptcy assets is carried out in accordance with the liquidation plan or in accordance with the supplementary legal provisions, and without being able to assess the merits of the matter, if necessary, as It is the consolidated and reiterated doctrine of the DGRN that judicial documents (writs and warrants) must record compliance with the applicable legal requirements.


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