Is it possible to award a property resulting from foreclosure proceedings after the bankruptcy order has been declared?
This is a case regulated by Article 56 of the LC, as amended by Law 38/2011 of 10 October, which modifies the previous provision to clarify it and bring it into line with the jurisprudential interpretation of the same, but without altering its content.
It is essential to start from the universal, exclusive, and exclusive jurisdiction of the bankruptcy judge to handle all of the debtor's financial matters (Article 8 LC); the summons that the opening of the proceedings entails for all creditors (Article 21); the inclusion of all creditors in the bankruptcy process (Article 49); and, above all, the non-initiation of individual executions and enforcement actions, whether judicial or extrajudicial, after the opening of the bankruptcy proceedings, as well as the suspension of those already initiated (Article 55).
However, as an exception, Article 56 of the LC allows the continuation of individual executions in certain cases, provided that they do not harm the purpose of the bankruptcy, extending the jurisdiction of the judge who has knowledge of the individual execution.
Although the general rule is that individual enforcement proceedings may be suspended at any stage of the proceedings, as long as the bankruptcy proceedings are declared, it is possible to extend the jurisdiction of the judge hearing the individual enforcement proceedings, provided that the judge hearing the bankruptcy proceedings declares that the assets subject to enforcement are not necessary for the debtor's continued business activity or that they are assets that are not subject to enforcement.
