Your customer goes insolvent owing you money: how to get paid

The case, in five lines

What is brought

Filing of the claim with the administración concursal (the court-appointed insolvency administrator) under articles 255 to 257 of the TRLC (the consolidated Spanish Insolvency Act) and, if the list of creditors does not recognise the claim, its amount or its ranking, a challenge brought as an incidente concursal (an ancillary claim within the insolvency proceedings). In parallel, reduction of the VAT taxable base and, where relevant, a request for the return of your own goods still held by the insolvent debtor.

Before which court

The claim is not filed with the court: it is addressed to the administración concursal (the insolvency administrator), at the postal or electronic address given in the published notice. Any challenge is decided by the insolvency judge, that is, the sección de lo mercantil of the Tribunal de Instancia (the commercial division of the first-instance court), also where the debtor is an individual who is not in business. No prior attempt at an adequate dispute resolution method is required: article 5.2 of LO 1/2025 imposes it in the declaratory proceedings of book II and the special proceedings of book IV of the LEC (the Spanish Civil Procedure Act), and neither the filing of claims nor the incidente concursal is one of them.

Deadline

One month from the day after the insolvency order is published in the BOE (articles 28.1.4 and 255 TRLC). It is neither a limitation period nor an expiry period for the debt itself: it is a preclusive burden, and whoever misses it does not lose the claim but sees it ranked as subordinated (articles 268 and 281.1.1). To challenge the list, ten days from its entry in the Registro público concursal (the public insolvency register) under article 297.2, a preclusive period that shuts out any later argument (article 299). To recover the VAT, two months from the end of that one month filing period, which in practice means three months from the day after the order is published (article 80.Three of the Spanish VAT Act).

Who can bring it

The claim is filed by the creditor holding it, by any other person with an interest in it or by anyone showing sufficient authority to represent them, in a signed document (article 257 TRLC). Only a party that has formally appeared in the insolvency proceedings, through a procurador (court representative) and a lawyer, may challenge the list (articles 297.1 and 512), against the insolvency administrator and, if it disputes another creditor's claim, against that creditor as well.

Financial risk

Filing the claim carries no court costs and needs no procurador. A challenge does, and the ancillary claim may end with an order to pay costs if it is dismissed. The real risk lies elsewhere: an ordinary claim usually recovers only part and late, a subordinated one almost never recovers anything, and if the debtor is a company that ends in liquidation, it disappears together with the debt. That is why recovered VAT and a properly claimed ranking are worth more than anything else in the insolvency.

The month runs from the BOE, not from the administrator's letter

Article 255 TRLC requires creditors whose claims predate the insolvency order to file them “within the period set in the order”, and article 28.1.4 sets that period: one month from the day after the insolvency declaration is published in the Boletín Oficial del Estado (the Spanish Official Gazette). The notice is published in the supplement of the single judicial notice board and in the Registro público concursal (the public insolvency register) under article 35, and from that day the clock runs for every creditor, whether they know it or not.

Article 252 requires the insolvency administrator to notify the declaration without delay to each creditor whose identity and address appear in the insolvency documents. That letter is a warning, not the starting point: if it arrives late or never arrives, the period is still the one triggered by the BOE. Treat the same date of the following month as the last day (a notice of 12 March means a last day of 12 April), do not gamble on the extra day some practitioners argue for or on August or a public holiday extending it, and file with time to spare and with proof of receipt.

Before counting anything, check what kind of insolvency it is. If the order declares an insolvency with no assets, there is no call for claims: article 37 ter only opens fifteen days from the day after the notice is published for the creditor or creditors holding at least five per cent of the liabilities to ask for an insolvency administrator to be appointed to report on voidable transactions, directors' liability and culpability. If nobody asks, the natural path is for the insolvency to be closed without you having said a word. And if the debtor is a micro business, the special procedure has its own periods in working days and its own standard forms (article 706 for liquidation), which we explain from the debtor's side in another guide.

Filing late does not erase the claim: it sends it to the back of the queue

Article 281.1.1 TRLC ranks as subordinated the claims the insolvency administrator classifies that way because they were filed late, unless they are claims of mandatory recognition. Subordinated means being paid only after the ordinary creditors have been paid in full, and in the vast majority of insolvencies that never happens. You do not lose the right, but you lose almost all of its economic value.

Once the challenge period has expired, a claim may still be filed until the final list is submitted, but article 268 is clear: if it is recognised, it is ranked as subordinated. The only way out is to show that you had no knowledge of the claim before the challenge period ended, which works for claims that arise or come to light late, such as a guarantee being called or a later judgment, and not for invoices that were sitting in your drawer.

This is the trap that costs suppliers the most: assuming that because your invoices are in the debtor's books, the administrator already knows about them and will respect them. Article 260 lists the claims of mandatory recognition (those recognised by an arbitral award or a judgment even if not final, those recorded in an enforceable instrument or an administrative certificate, those secured by a registered security interest, and employees' claims shown by the debtor's books), and a commercial invoice that merely appears in the accounts is not on that list. If you do not file it in time, the administrator may include it, but as subordinated. On top of that, interest stops accruing from the declaration (article 152) and interest accrued before it is subordinated (article 281.1.3): file it, but separately from the principal.

The ranking is claimed in the same filing, and it decides whether you get paid

Article 256 TRLC requires the filing to state, besides the creditor's identity, the nature of the claim, its amount, the dates it arose and fell due, its features and the ranking sought, and, where a special privilege is invoked, the assets affected and their registry details. A copy of the title or the supporting documents must be attached and a postal or electronic address given, because whatever the insolvency administrator sends there has full legal effect. A filing that merely says “they owe me this much” leaves the ranking in the administrator's hands.

Article 269 divides claims into privileged ones (with a special privilege over specific assets or a general privilege over the whole estate), ordinary and subordinated, and admits no privilege that the statute does not provide for. Two general privileges the average creditor knows nothing about are in article 280: that of individuals for their own non employed work accrued in the six months before the declaration, which covers the self employed person or professional billing their own work, and that of the creditor at whose request the insolvency was declared, for up to half of its claim. If you fall within either and do not ask for it, your claim will normally appear as ordinary.

A seller with a retention of title clause or a termination clause for non payment has a special privilege over the goods sold (article 270.4 TRLC), but article 271 requires the security to have been created before the insolvency with the formalities its own legislation lays down for it to bind third parties, which for instalment sales of movable goods means registration in the Registro de Bienes Muebles (the movable property register). A retention of title clause buried in general terms and conditions and never registered does not lift you out of the ordinary creditors. And even when registered, recovering the goods is not immediate: article 150 subjects that action to the regime for security interests, which is frozen if the asset is needed for the debtor's business. Conversely, if you are a company in the debtor's group or a person specially related to the debtor, your claim will be subordinated under article 281.1.5, whenever you file it, except in the cases listed in paragraph 2 of that same article.

The list is corrected in two short windows, and the second one is in court

At least ten days before filing its report, the insolvency administrator emails the draft inventory and draft list of creditors to the debtor and to the creditors who gave it an email address, and up to three days before the report is filed any of them may ask for an error to be corrected or for details to be completed (article 289 TRLC). This is the inexpensive window: no court and no procurador, just a well argued submission and the documents. It only reaches those who gave an email address in their filing.

If the administrator does not correct it, the court route remains. Article 297 allows the parties that have appeared in the proceedings to challenge the inventory and the list of creditors within ten days of those documents being entered in the Registro público concursal (the public insolvency register), not from when you found out or from when the email arrived. The challenge may seek the inclusion or exclusion of claims or dispute their amount or ranking (article 298), it is decided as an incidente concursal (article 300), and the creditor acts in it through a procurador and a lawyer (article 512). If you have not yet appeared, the appearance must be entered, at the very latest, together with the challenge itself; appearing early gives you access to the court file and its notifications.

Article 299 shuts the door: whoever does not challenge in time and in proper form cannot later seek changes to those documents. The Tribunal Supremo (the Spanish Supreme Court) has held that the list of creditors, subject to the exceptions the statute itself provides, fixes once and for all the composition of the liabilities, which can no longer be contested afterwards. That is why the day the report is entered in the register is, for you, the most important date of the whole insolvency, even more than the last day of the filing month.

VAT on unpaid invoices is recovered within three months, paid or not

You paid the tax authorities the VAT on invoices you have not been paid. Article 80.Three of the Spanish VAT Act allows the taxable base to be reduced where the customer has not paid the VAT charged and, after the transaction was carried out, an insolvency order is issued. In the example above, about 8,400 of the 48,600 euros including VAT is tax: money that can return to your cash flow within weeks, while the principal may take years or never arrive.

The period is short and cannot be extended: the reduction cannot be made more than two months after the end of the one month period for filing claims, which in practice means three months from the day after the order is published in the BOE. It is made through a corrective invoice sent to the insolvent customer, with a copy to the insolvency administrator, and the correction must be reported to the Agencia Estatal de Administración Tributaria (the Spanish tax agency) within one month of issuing that invoice, as the VAT Regulations require. Once corrected, that tax is no longer your claim in the insolvency: file the full claim from the outset stating that you will correct the VAT, and then tell the administrator so the list is adjusted.

Three details that cost money. This route is not available for the secured part of claims with a security interest, for guaranteed claims, for claims between related parties or for amounts owed by public bodies. Once insolvency is declared, the separate bad debt route in paragraph Four can no longer be used for transactions carried out before the order, so if you let the three months pass there is no plan B. And if the insolvency ends for one of the reasons the statute lists, such as the declaration being overturned or all recognised claims being paid in full, you will have to charge the VAT again through a new corrective invoice.

After the order you cannot seize or set off at will, but other routes remain

Article 142 TRLC prohibits starting individual enforcement, judicial or out of court, and administrative collection proceedings against the estate's assets from the declaration onwards, and article 143 stays those already under way. A fresh claim for payment against the insolvent company is not the route: your claim is recognised within the insolvency. What does continue is any declaratory action already pending, until the judgment becomes final (article 137), and that judgment, even if not final, obliges the insolvency administrator to include the claim (article 260). Nor can you now sue the company's directors for its debts for failing to wind it up in time: those claims are not admitted from the declaration onwards and pending ones are stayed until a composition agreement takes effect or the proceedings close (articles 136 and 139).

If you also owe the debtor something, set off only protects you if its requirements were already met before the declaration, even if raised afterwards (article 153.1). Once insolvency is declared, no set off is allowed except between claims and debts arising from the same legal relationship, and any dispute is decided by the insolvency judge as an incidente concursal. Your own goods are a different matter: property belonging to others that is in the debtor's possession, and over which the debtor has no right of use, security or retention, is handed back to its owner on request (article 239), and if the insolvency administrator refuses, the matter is argued as an incidente concursal. The evidence is identification: pallet by pallet, batch by batch.

Whatever you supply or perform after the order is no longer an insolvency claim: article 242 treats as claims against the estate those generated by the debtor's business after the declaration and the debtor's obligations under contracts with reciprocal obligations that remain in force, and article 245 requires them to be paid when due. If they are not paid, they are claimed before the insolvency judge as an incidente concursal (article 247), because article 248 postpones enforcement to collect them. Continuing to supply can be good business, but on short payment terms, with every due date monitored and an eye on a possible notice that the estate is insufficient (article 249), which changes the order of payment even for these claims.

How we run the case, step by step

1. 1

   Finding the notice and fixing the last day

   We locate the notice in the BOE and in the Registro público concursal (the public insolvency register), note the publication date and take the same date of the following month as the last day, without counting on any extra days. In the same reading we check whether it is an insolvency with no assets, with its fifteen day window, or a special micro business procedure, with its own periods.

2. 2

   Gathering the title and splitting the items

   We put the invoices, signed delivery notes, orders and contract in order and separate the principal, the interest accrued up to the order, the VAT and any security. We check for a registered retention of title, personal work in the last six months or goods on consignment, because each of those requires something different in the filing.

3. 3

   Filing with the insolvency administrator, stating the ranking sought

   A signed document addressed to the administración concursal (the insolvency administrator), at its postal or electronic address, with the details required by article 256 TRLC, the ranking sought, the assets affected if a special privilege is claimed, copies of the documents and an email address to receive the draft list. The same document asks for the return of your own goods and gives notice of the VAT correction. Proof of receipt is kept.

4. 4

   Corrective VAT invoice within the three months

   The corrective invoice is issued and sent to the insolvent customer and to the insolvency administrator, and the change is reported to the Agencia Estatal de Administración Tributaria (the Spanish tax agency) within one month of issue. The administrator is then told so that the tax is deducted from the recognised claim.

5. 5

   Reviewing the draft list before the report

   When the draft inventory and list of creditors arrives, the amount and ranking are checked, and up to three days before the report is filed a written request is made to correct any error, with the supporting documents.

6. 6

   Challenge within ten days and ancillary claim

   If the list entered in the public insolvency register does not recognise the claim, its amount or its ranking, it is challenged within ten days of that entry before the sección de lo mercantil of the Tribunal de Instancia (the commercial division of the first-instance court), with a formal appearance through a procurador and a lawyer. The insolvency is then followed through to a composition agreement or liquidation, keeping watch over payments and the culpability ruling.

The law that applies

• Art. 255 TRLC. Requires creditors whose claims predate the declaration to notify the insolvency administrator of their claims within the period set in the insolvency order, which article 28.1.4 TRLC sets at one month from the day after publication in the BOE. BOE-A-2020-4859
• Art. 256 TRLC. Sets the content of the filing: creditor's identity, nature of the claim, amount, dates it arose and fell due, features and ranking sought, and, where a special privilege is invoked, the assets affected and their registry details. The creditor gives a postal or electronic address, communications to which have full effect, attaches copies of the titles, and the insolvency administrator may request the originals unless they are recorded in a public register. BOE-A-2020-4859
• Art. 268 TRLC. Allows claims to be filed after the period for challenging the list has ended and before the final list, but claims recognised that way are ranked as subordinated, unless the creditor shows it had no knowledge of them before the challenge period ended. BOE-A-2020-4859
• Art. 280 TRLC. Lists the claims with general privilege, including those of individuals arising from their own non employed work accrued in the six months before the declaration, and those of the creditor at whose request insolvency was declared, excluding subordinated ones, up to fifty per cent of their amount. BOE-A-2020-4859
• Art. 281 TRLC. Ranks as subordinated, among others, claims classified that way because they were filed late unless they are of mandatory recognition, surcharges and interest of any kind save those on secured claims up to the value of the security, fines and financial penalties, and claims held by persons specially related to the debtor. BOE-A-2020-4859
• Art. 297 TRLC. Allows the parties that have appeared in the insolvency proceedings to challenge the inventory and the list of creditors within ten days, counted from the entry of those documents in the public insolvency register. BOE-A-2020-4859
• Art. 299 TRLC. Bars anyone who did not challenge the inventory or the list of creditors in time and in proper form from later seeking changes to their content, although they may appeal the changes the judge makes when deciding challenges brought by others. BOE-A-2020-4859
• Art. 80 LIVA. Allows the taxable base to be reduced where the customer has not paid the VAT charged and, after the chargeable event, an insolvency order is issued, but not more than two months after the end of the one month period for filing claims; requires the VAT to be charged again if the insolvency ends for certain reasons, and separately regulates the reduction for bad debts. BOE-A-1992-28740

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

Frequently asked questions