Company director personal guarantees and debt relief in Spain: you guaranteed your company's loans and the tax agency passes its debts on to you

The case, in five lines

What is brought

Insolvency proceedings for the director as an individual, with an application for exoneración del pasivo insatisfecho (discharge of unpaid debts) covering the guarantees and the derived debt. In parallel, an appeal against the derivation of liability decision and the director's defence in the culpability stage of the company's insolvency or special procedure.

Before which court

Your insolvency and discharge are heard by the Sección de lo Mercantil del Tribunal de Instancia (the commercial section of the court of first instance) in the provincial capital of the province where you have your centre of main interests (art. 87.7 LOPJ and art. 45.1 TRLC). The appeal against the derivation goes through the administrative route, to the body named in the statement of appeal rights at the foot of the decision itself (art. 174.4.b LGT). Appeals against court rulings go to the Audiencia Provincial (the provincial court of appeal).

Deadline

The appeal against the derivation must be lodged within the period stated in the decision itself, usually one month from notification; if it lapses, the decision becomes final and the wording of art. 487.1.2.º TRLC takes it into account for ten years. In the culpability stage of the company's special procedure, fifteen working days to oppose a report proposing that it be declared culpable (art. 717.4 TRLC). In your own no-asset insolvency, ten days to apply for discharge once the fifteen days given to creditors expire (arts. 37 ter and 501.1 TRLC), and twenty days to appeal any ruling that refuses it.

Who can bring it

You, as an individual, apply for your own insolvency and discharge (arts. 3.1 and 486 TRLC); the firm's lawyer and procurador (court representative) act for you, under a special power of attorney you grant free of charge in person before the letrado de la Administración de Justicia (court clerk) of any court office. You appeal the derivation decision as the declared liable party, represented by us with your authorisation, without using your digital certificate or your Cl@ve login.

Financial risk

If the company's insolvency is declared culpable and you are named a persona afectada (a person affected by the culpability ruling), there is no discharge for ten years unless you pay your liability in full (art. 487.1.4.º TRLC). If the derivation stems from fraudulent conduct comparable to a very serious infringement, that also closes the door. Even if granted, discharge does not release your spouse or the other guarantors (art. 492.1 TRLC), and the debt derived by the tax agency is only discharged up to a cap.

What you signed as guarantor is your own debt, and it is discharged in your own insolvency

The company and you are two separate debtors. The loan is owed by the SL; you, having guaranteed it, are personally liable for it, nearly always as a joint and several guarantor. That liability is part of your own debts, and art. 486 TRLC (the consolidated Insolvency Act) allows any individual, whether or not in business, to apply for discharge of unpaid debts if they are a good faith debtor. It does not matter that the debt arose in the company: what counts is that it is being claimed from you today. The same applies to whatever the tax agency or social security has made you liable for and to any liability for company debts that a creditor demands from you.

Discharge only exists for individuals. The company is not discharged: it is wound up, and if that happens through the special procedure for micro-enterprises, the closing order closes its entry in the Registro Mercantil (the companies register) (art. 720.2 TRLC). That is why closing the SL releases you from nothing. Nor does your discharge release the company, or your spouse or business partner if they guaranteed alongside you: art. 492.1 preserves the bank's rights against joint debtors, sureties and guarantors. Conversely, if a co-guarantor pays and then claims from you, that recourse claim is affected by your discharge just like the principal debt (art. 492.2).

The precondition is your insolvency, current or imminent (art. 2 TRLC): being unable to meet your due obligations regularly, or foreseeing that you will be unable to within the next three months. The law sets no minimum debt, but at least two creditors are needed; with a bank and the tax agency you already have them. What nobody tells you is that a guarantee nobody has yet called in must be listed too: the Tribunal Supremo (Supreme Court), in its judgments 254/2026 and 260/2026 of 18 February, makes clear that discharge reaches the claims the debtor listed and the order identifies. A guarantee left unmentioned stays outside.

Derivation of liability: what the law says and what the Supreme Court has said

Derivation to the director of a closed SL usually comes from art. 43.1.b) LGT (the General Tax Act): the director is secondarily liable for taxes outstanding when activity ceased if they did not do what was necessary to pay them or took decisions that caused the non-payment. There are other routes: art. 43.1.a), for the company's infringements, which extends to penalties; art. 43.1.g), where the company was created or used abusively or fraudulently; or joint and several liability under art. 42.2.a), for concealing or transferring assets to prevent collection. Secondary liability requires the company and any jointly liable parties to have been declared insolvent for collection purposes first (arts. 41.5 and 176), and always a formal act, after a prior hearing, fixing its scope.

Read literally, art. 487.1.2.º TRLC bars discharge for anyone who, in the ten years before the application, received a final derivation of liability decision, unless they have paid it in full. The Court of Justice of the European Union (cases C-289/23 and C-305/23, 7 November 2024) accepted such exclusions only where they are duly justified under national law. On that basis, the Supreme Court, in its judgments 259/2026, 261/2026, 262/2026 and 263/2026 of 18 February, has held that derivation is a guarantee of collection and not a penalty, and that it only bars discharge if it is established that it stems from fraudulent conduct by the director comparable to a very serious infringement.

What decides the matter, then, is the conduct your derivation stems from. One under art. 43.1.b) for a plain closure with debts, without concealment, does not in itself establish fraud; a derivation for stripping the company, using it as a front or helping to conceal assets very likely does. A very serious tax penalty imposed on you personally, by contrast, does exclude discharge. The judge checks the requirements of their own motion even if nobody objects, and the burden of providing the information, including the origin of your debts, lies with you. That is why the decision, the facts on which it rests and what you did to pay are explained from the application onwards, not when the tax agency objects.

Appealing the derivation in time: the front won or lost within a month

The derivation decision is an administrative act with its own appeals. Its notification must contain the full text, the facts that trigger liability, the tax assessments it covers, the available appeals with their body and deadline, and the place, deadline and method of payment (art. 174.4 LGT). The appeal may challenge both those facts and the company's assessments, though only as regards the amount demanded from you (art. 174.5); in liability under art. 42.2, by contrast, only the overall scope can be disputed.

Appealing serves two purposes. The first is the merits: under art. 43.1.b) the question is whether you did what was necessary to pay, and it is answered with documents (deferrals requested, partial payments, the application for the company's insolvency, the absence of real cash). The second is the insolvency: the wording of art. 487.1.2.º refers to a final decision, and while the appeal is pending the decision is not final. If you do not appeal, it becomes final and the debate in your discharge narrows to whether it is established that the derivation stems from fraudulent conduct comparable to a very serious infringement.

What nobody tells you is what happens if you do not pay within the voluntary period you are given: the debt is pursued through enforced collection, with the enforcement-period surcharge (art. 174.6 LGT), and attachments follow. From the declaration of your insolvency, not from the application, no enforced collection may be started against your assets and any already under way are suspended, with the exceptions the law provides, including administrative enforcement where attachment has already been ordered over assets not needed for a business activity (arts. 142 to 144 TRLC). Suspending is not cancelling: whatever is not discharged will remain payable.

The company's proceedings decide your discharge: the culpability ruling

The greatest risk lies not with the tax agency but in the company's proceedings. The SL's insolvency is culpable where its insolvency was caused or worsened by wilful misconduct or gross negligence of its directors or liquidators, de jure or de facto, or of those who held office in the previous two years (art. 442 TRLC). The judgment will then name you a persona afectada and may order you to cover the shortfall to the extent that your conduct caused or worsened the insolvency (art. 456). And art. 487.1.4.º denies discharge for ten years to anyone who was a person affected in a third party's culpable insolvency, unless paid in full. The Court of Justice of the European Union (case C-723/23, Amilla, 10 April 2025) has upheld that exclusion.

Most small SLs are micro-enterprises and go through the special procedure (arts. 1.2 and 685 TRLC), where the culpability stage has its own rules. Once liquidation is opened, the administración concursal (insolvency practitioner), creditors representing at least 10 % of the liabilities and partners personally liable for the debts have sixty calendar days to request it (art. 716.1), and public creditors may always file their own report (art. 717.1). If culpability is proposed, you have fifteen working days to oppose it in a document signed by a lawyer (art. 717.4). That document, filed in the company's proceedings, is really the defence of your own future discharge.

If the culpability ruling is not yet final when you apply for discharge, the judge must stay the decision until it is (art. 487.2), not refuse it. What nobody tells you is that filing the company's proceedings in time is part of your defence: it must be filed within two months of the date on which the current insolvency was or should have been known (arts. 5 and 686.2 TRLC), and art. 367.3 LSC (the Companies Act) relieves the director of liability for debts arising after the ground for dissolution if, within two months of the ground for dissolution arising, the company's insolvency was applied for. Pulling down the shutters and disappearing is what generates the most culpability findings and the most derivations.

How much of the liability passed on to you by the tax agency and social security is cancelled

In your insolvency, the derived debt is a public law claim, and the rule in art. 489.1.5.º TRLC is that it is not discharged except for one band. The Supreme Court, in its judgments 254/2026 and 260/2026 of 18 February, has held that the cap applies to each public creditor separately (the Agencia Tributaria (the Spanish tax agency), the Tesorería General de la Seguridad Social (the social security treasury), the town council or the regional government): from each one, the first 5,000 euros are discharged in full and, above that, 50 % up to a maximum of 10,000 euros discharged, which is reached with 15,000 euros of debt owed to that creditor.

According to those same judgments, subordinated public claims (surcharges, interest and penalties) are discharged in full, and the cap only applies to the rest. With a 38,000 euro derivation from the tax agency with no subordinated part, 10,000 would be discharged and 28,000 would remain; if it were 8,000, 6,500 would be discharged and 1,500 would remain. That is why itemising each component is worth money. With one caution: very serious administrative penalties are never discharged (art. 489.1.6.º), and a derivation under art. 43.1.a) LGT may carry penalties imposed on the company, so the decision is checked to see which they are and how serious.

That band only exists in the first discharge: in later ones, nothing of the public claims is discharged (arts. 488.3 and 489.3). And whatever is not discharged remains payable, because creditors holding non-dischargeable claims keep their rights of action (art. 490). The strategy therefore combines fronts: appealing to reduce or annul the derivation, itemising so that the subordinated part is discharged in full, listing each public creditor separately to use each cap and, for whatever survives, agreeing with the tax agency a way of paying that you can keep up.

Which route and in what order: your insolvency, the company's and the payment plan

If you do not carry on a business or professional activity of your own, the usual route is insolvency under book one of the TRLC before the Sección de lo Mercantil del Tribunal de Instancia in your provincial capital (art. 87.7 LOPJ). If you do carry on your own activity and meet the micro-enterprise thresholds (fewer than ten employees on average in the previous year and turnover below 700,000 euros or liabilities below 350,000), the special procedure is mandatory (arts. 1.2 and 685 TRLC), and if 85 % or more of your claims are public, only liquidation is available (art. 686.4). The Supreme Court has not settled where a director registered as self-employed because of the post falls: it is decided on your facts.

Order matters. Where the company is not a micro-enterprise, art. 38 TRLC allows it and its directors who are liable for its debts to apply jointly for their insolvencies. Where it is one, they go through separate proceedings, and yours is best brought knowing how the company's culpability stage is going: if a culpability proposal is pending, your discharge will be stayed until the ruling is final (art. 487.2). Without assets, your insolvency is usually a no-asset one: creditors representing at least 5 % of the liabilities have fifteen days to ask for an insolvency practitioner to be appointed (art. 37 ter.1), and if nobody does, you apply for discharge within the following ten days (art. 501.1).

If you have a home or income you want to keep, the alternative is the payment plan without liquidation: it is applied for before liquidation is ordered, lasts three years, or five if the family home is not sold or if payments depend mainly on future income, and it gives a provisional discharge that becomes final once the plan is completed (arts. 495, 497 and 500 TRLC). And if your spouse also signed the guarantee or the debts are community property, the discharge does not extend to your spouse until they obtain it themselves (art. 491): often the sensible course is to examine both cases together.

How we run the case, step by step

1. 1

   Map of debts and open fronts

   We gather each guarantee with its loan agreement and the bank's claim, each derivation decision with its notification date and statement of appeal rights, and the company's status: closed in practice, in insolvency or in the special procedure. That gives us the deadlines already running.

2. 2

   Appeal against the derivation within the deadline

   We challenge the triggering facts and the assessments (art. 174.5 LGT) and put on record that the derivation does not stem from fraudulent conduct. We file it as your representatives, under the authorisation you sign, without your certificate or your Cl@ve login.

3. 3

   Defence in the company's culpability stage

   If a culpability ruling is sought, we oppose it in time (fifteen working days in the special procedure, art. 717.4 TRLC) with the accounts and the history of the business, and appeal if the judgment names you a person affected.

4. 4

   Choosing the route and the timing

   We decide whether your case goes to book one insolvency or to the special procedure, whether liquidation or a payment plan suits you better, and when to file in light of how the company's culpability stage is going.

5. 5

   Power of attorney for the procurador and insolvency application

   You grant the special power of attorney free of charge, in person, before the court clerk of any court office. We prepare the report on your financial history, the inventory, the list of creditors with every guarantee and each public creditor shown separately, your income tax returns for the last three years and the statement that no exclusion ground applies to you.

6. 6

   Discharge, objections and appeal

   We apply for discharge in time (in a no-asset insolvency, ten days after the call to creditors, art. 501.1 TRLC), answer any objection by the tax agency or the bank in the incidental proceedings and, if the judge refuses discharge, appeal to the Audiencia Provincial within twenty days.

The law that applies

• Art. 487 TRLC. Lists the circumstances that bar discharge; among them, a final penalty for a very serious tax, social security or labour infringement or a final derivation of liability decision in the previous ten years, and having been named a person affected in a third party's culpable insolvency, unless paid in full. If the culpability ruling is not final, the judge stays the decision until it is. BOE-A-2020-4859
• Art. 489 TRLC. Discharge reaches all unpaid debts except those listed. Public law claims are not discharged except for a band of up to 10,000 euros, the first 5,000 in full and 50 % above that, which the wording sets for debts with the Agencia Tributaria and, for the same amount, for social security debts, and only in the first discharge; criminal fines and very serious administrative penalties are not discharged. BOE-A-2020-4859
• Art. 492 TRLC. Discharge does not affect creditors' rights against joint debtors, sureties, guarantors, insurers and third-party mortgagors, who cannot rely on it; recourse claims against the discharged debtor are affected on the same terms as the principal claim. BOE-A-2020-4859
• Arts. 442 y 456 TRLC. An insolvency is culpable if it was caused or worsened by wilful misconduct or gross negligence of the debtor or, in a legal person, of its directors or liquidators, de jure or de facto, and of those who held office in the previous two years; if the culpability stage opens because of liquidation, the judge may order those affected to cover the shortfall to the extent that their conduct caused or worsened the insolvency. BOE-A-2020-4859
• Arts. 716 y 717 TRLC. In liquidation under the special micro-enterprise procedure, the insolvency practitioner, creditors holding at least 10 % of the liabilities and personally liable partners may request the culpability stage within sixty calendar days; public creditors may always report, and anyone who may be affected has fifteen working days to oppose in a document signed by a lawyer. BOE-A-2020-4859
• Arts. 41 y 43 LGT. Tax liability of third parties is secondary unless a provision expressly says otherwise, does not extend to penalties save for exceptions, and requires a formal act after a prior hearing and, where secondary, a declaration that the principal debtor is insolvent for collection purposes. Art. 43 makes secondarily liable the directors of companies that committed infringements, including for the penalties, and those of companies that ceased trading with taxes outstanding without doing what was necessary to pay them. BOE-A-2003-23186
• Arts. 174 y 176 LGT. The derivation decision is served with its full text, the triggering facts, the assessments, the available appeals with body and deadline, and the payment deadline; the appeal may challenge the triggering facts and the assessments, and if payment is not made in the voluntary period it is pursued through enforcement with a surcharge. Secondary liability requires the principal debtor and any jointly liable parties to be declared insolvent for collection purposes first. BOE-A-2003-23186
• Art. 367 LSC. A director who fails to call a general meeting within two months of a ground for dissolution, or to seek judicial dissolution, is jointly and severally liable for subsequent company obligations, which are presumed to be subsequent unless proven otherwise; there is no liability if, within that period, the director applied for the company's insolvency or gave notice of negotiations with creditors to reach a restructuring plan. BOE-A-2010-10544

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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