Cannot keep up with a discharge payment plan in Spain

The case, in five lines

What is brought

An application to modify the payment plan on the ground of a significant change in your financial situation (art. 499 bis TRLC); opposition to any application by a creditor to revoke for default (art. 499 ter); when the plan ends, a request for the final discharge, including despite default if it stems from accident, illness or another serious and unforeseeable event (art. 500.2); and, where advisable, a switch to discharge with liquidation (art. 500 bis).

Before which court

The insolvency judge: the Sección de lo Mercantil del Tribunal de Instancia (commercial section of the court of first instance) that approved the plan. The judgment deciding challenges to the modification may be appealed to the Audiencia Provincial (provincial court of appeal), without suspensive effect (arts. 499 bis.3 and 498 bis.3). No appeal of any kind lies against the order granting the final discharge (art. 500.3).

Deadline

The modification has no deadline of its own: it may be sought from the moment the provisional discharge takes effect (art. 498 ter.1) and for as long as the plan lasts, which runs from judicial approval (art. 497.3). Once it is requested, creditors who have appeared in the proceedings have ten days to make submissions and any affected creditor has ten days to challenge it (arts. 498.1 and 498 bis.1, applied by art. 499 bis.3). Revocation for default has no deadline of its own in the law (art. 499 ter.1) and, in plans whose payments depend exclusively or mainly on income, may also be sought when the plan period ends (art. 499 ter.2); revocation under art. 493 (inheritance, gambling winnings or concealment) only within three years of the provisional discharge (art. 493.2). A report to the judge every six months (art. 498 ter.3).

Who can bring it

The modification may be sought by you or by any creditor affected by the discharge (art. 499 bis.1); revocation for default, by any affected creditor (art. 499 ter.1). You always act through a procurador (court representative) and a lawyer (art. 510): we provide both, and our procurador files the application. You file nothing at court and do not give us your digital certificate.

Financial risk

If it is revoked, the plan is terminated together with its effects on the debts and liquidation of the insolvency estate is opened, in which the home may be sold; what you have paid keeps its effect (art. 499 ter.3) and you may still apply for discharge with liquidation (art. 500 bis). Once one modification is approved, no other can be (art. 499 bis.4). The final discharge is granted by the judge: nobody can guarantee it.

Stopping payment in silence hands the initiative to the creditor

While the plan runs, your discharge is provisional. The judge granted it on that basis when approving the plan (art. 498.2 of the TRLC, the texto refundido de la Ley Concursal or consolidated Insolvency Act) and will only issue the order of final discharge once the period has passed without revocation (art. 500.1). Meanwhile, art. 499 ter.1 allows any affected creditor to apply for revocation if you ‘fail to comply with the payment plan’. The law sets no number of missed instalments and does not require the default to be serious: the judge weighs it on what is in the court file.

The consequence is in art. 499 ter.3: revocation means the termination of the plan and of its effects on the debts, and the opening of liquidation of the insolvency estate. If your plan ran for five years precisely so that the home would not be sold (art. 497.2.1.º), liquidation puts it up for sale. What nobody tells you is that the initiative lies with the creditor: if you stay silent, the first thing the judge reads about your default is the bank's application, not your explanation.

On top of that, you remain under a duty to report. The duties to cooperate and inform last until the final discharge and, every six months, the debtor reports to the judge on compliance with the plan and on any significant change in assets (art. 498 ter.3). A dismissal, a long period of sick leave or a separation with child maintenance changes your financial situation, and the judge should hear it from you. That is why we do not wait for the six-monthly report: as soon as the change happens, our procurador files a written submission explaining it and proving it.

Modifying the plan: only one is ever approved, whoever asks for it

Art. 499 bis.1 opens the route: where, after the provisional discharge has taken effect, there is a significant change in the debtor's financial situation, both the debtor and any affected creditor may ask the judge to modify the approved plan. The provisional discharge takes effect when the period for challenges ends with no challenge, or on the judgment rejecting the challenge (art. 498 ter.1). The application is served on the debtor and on the affected creditors (art. 499 bis.2).

The modification is approved and challenged within the same periods and in the same way as the original plan, and has the same effects (art. 499 bis.3). That means ten days for creditors who have appeared to make submissions and propose limits on your powers of disposal (art. 498.1), an assessment by the judge of the objective prospects of compliance (art. 498.2) and ten days to challenge it on the grounds in art. 498 bis.1, among them that the plan does not guarantee a creditor what it would receive in liquidation. The judgment on the challenges may be appealed to the Audiencia Provincial (provincial court of appeal), without suspensive effect (art. 498 bis.3).

What nobody tells you is in art. 499 bis.4: no more than one modification may be approved. The law counts approved modifications, not who asked for them, so if a creditor manages to raise your instalment because you found a better job, that way out will no longer be available for a later setback. Nor will it if you use it up now on an optimistic plan. That is why the modified plan is designed for the realistic scenario, and it is sometimes wise for the instalment to depend on your income, which art. 496 allows and which absorbs later changes by itself.

Check what kind of instalment you have: fixed or linked to your income

Art. 496 allows plans with payments of a fixed amount, payments whose amount is determined by how the debtor's income and resources evolve, or a combination of both. The first thing we do is read the order and the approved plan. If your instalment is fixed, any shortfall is a default. If it is calculated on your income, a fall in earnings lowers what the plan itself requires of you, and paying less because you earn less may not be a default at all: it is applying the formula.

The yardstick is set by the law itself: income exceeding the legal minimum that cannot be attached, what is needed for the debtor's reasonable new obligations and the instalments of the non-dischargeable debt (arts. 498 bis.1.4.º and 499 ter.2). The minimum that cannot be attached is the national minimum wage, 1.221 euros a month in 2026, and above it attachment applies in bands, from 30 % up to twice that figure to 90 % of anything above five times it (art. 607 of the LEC, the Ley de Enjuiciamiento Civil or Civil Procedure Act). If your income falls below the minimum wage, there is a sound argument for asking that the instalment be lowered; and if, after a separation, you pay maintenance for your children, that new obligation counts.

Plans whose payments depend exclusively or mainly on income have a trap of their own, and it comes at the end. When the period expires, any affected creditor may apply for revocation if it becomes clear that you did not devote to the dischargeable debt all the actual income that exceeded those amounts (art. 499 ter.2). And these plans last five years (art. 497.2.2.º). The evidence is your income for each year: payslips, benefits and IRPF (personal income tax) returns, which are best kept in order from today rather than reconstructed when a creditor asks for them.

Illness, accident or an unforeseeable blow: the final discharge without having paid everything

Art. 500.2 allows the judge, after hearing the creditors and having regard to the circumstances of the case, to grant the final discharge even though you have not complied with the plan in full. It requires two things. That the default results from accident or illness, or other serious and unforeseeable events, affecting you or those who live with you. And that you have in every case complied with the limits or prohibitions on disposal or management and with the transfers in payment set by the plan. The verb is ‘may’: the judge decides.

What nobody tells you is that there is no longer a percentage. The original text of the TRLC required at least half of the attachable income, or a quarter in certain cases, to have been devoted to the plan; Law 16/2022 abolished that rule and today there is no legal minimum. Nor is there a list of events: the law does not mention dismissal or separation, and whether they count as serious and unforeseeable depends on how they came about. A collective redundancy does not weigh the same as a voluntary resignation, nor does a child's illness that forces your partner to cut their hours weigh the same as an expense that could have been avoided.

Art. 500.2 comes into play when the plan period ends, and the law does not say whether those same circumstances halt a revocation sought halfway through. So if the blow comes in the second year, we do not wait until the fifth while missed instalments pile up: we seek the modification now and keep art. 500.2 for whatever still cannot be paid. And one rule with no exceptions: do not sell or charge an asset the plan forbids you to touch, not even to pay instalments, because that condition applies ‘in every case’.

If it is revoked: what you paid stands, liquidation opens and discharge is still possible

Revocation for default terminates the plan and its effects on the debts and opens liquidation of the insolvency estate (art. 499 ter.3). But the same paragraph protects what has been done: acts carried out in performance of the plan have full effect, unless fraud, breach of the plan itself or a departure from equal treatment of creditors is proved. What you paid is neither refunded nor lost: it was validly paid. If the judge revokes, the decision can be challenged and the deadlines are short; the route depends on its form, because judgments of the insolvency judge may be appealed while, as a rule, the judge's orders (autos) only admit an application for reconsideration (reposición).

Once the provisional discharge is revoked, or if the final discharge is not available, you may still apply for discharge with liquidation of the insolvency estate (art. 500 bis). Liquidation realises the debtor's assets and rights (art. 192.1), but not what the law protects from attachment (art. 192.2), and mortgage debt is not discharged within the value of the security. The good faith requirements still apply, and the judge checks them of his or her own motion even if nobody objects (Tribunal Supremo, the Supreme Court, judgments 259/2026 and 261/2026 of 18 February).

The same art. 500 bis opens a door that hardly anyone uses: a debtor who obtained the provisional discharge may set it aside on their own initiative and apply for discharge with liquidation. If the home can no longer be sustained even with the instalment recalculated on the value of the security (art. 492 bis.2), or if nothing the plan was protecting is left, choosing the moment yourself may be better than defending a revocation: the application is prepared in an orderly way, instead of answering an incidente concursal (interlocutory insolvency proceedings) on the timetable the creditor sets.

When the plan ends: the final order and what it does not cover

Once the plan period has passed without revocation, the insolvency judge issues an order granting the final discharge (art. 500.1). The period runs from the date of judicial approval (art. 497.3), not from the first instalment. The law sets you no deadline and does not require a formal application, but waiting is unwise: when it expires, we file a submission proving compliance instalment by instalment and, if any were missed, the request under art. 500.2 with its evidence, so that the judge hears the creditors on something specific.

The order is published in the Registro público concursal (public insolvency register) and no appeal of any kind lies against it (art. 500.3). Only that order brings the court instruction requiring creditors to notify the discharge to the credit reference files to which they reported the default (art. 492 ter.1); the provisional discharge brings none. You may also request a certified copy of the order and require those files directly to update your data (art. 492 ter.2), and the data controller has one month to reply (art. 12.3 of the General Data Protection Regulation).

What nobody tells you is what is left out. The discharge covers the part of the dischargeable debt that, under the plan, remains unpaid (art. 499.1), and only the debts you listed and that the order identifies (Tribunal Supremo, judgments 254/2026 and 260/2026 of 18 February). It does not cover guarantors or sureties (art. 492.1), nor the new debts you take on during the plan to make ends meet, which are claimed before the insolvency judge (art. 499.2). And revocation for inheritance, gift, gambling winnings or concealment may only be sought within three years of the provisional discharge (art. 493.2): in a five-year plan, that window closes before the plan ends.

How we run the case, step by step

1. 1

   Pin down the dates and the type of instalment

   With the approval order and the plan, we establish when it started to run (art. 497.3), when it expires, when the three-year window in art. 493.2 closes, whether your instalment is fixed or income-linked and what limits on disposal it imposes.

2. 2

   Document the change

   We gather the evidence of the dismissal, the illness or the separation and rebuild your budget with the minimum that cannot be attached, the new obligations and the non-dischargeable debt, including the recalculated mortgage.

3. 3

   Tell the judge before the creditor does

   Our procurador files a submission reporting the change and proving it, without waiting for the six-monthly report under art. 498 ter.3. You file nothing and need no digital certificate: you upload the documents to your file with us.

4. 4

   Seek the modification with a plan that will hold

   We propose the modified plan with its timetable and resources (art. 496), designed for the realistic scenario, because only one modification may be approved (art. 499 bis.4).

5. 5

   Defend the plan against the creditors

   We answer the submissions and challenges, and the revocation application if a creditor brings one. If the judgment on the challenges goes against you, we appeal it to the Audiencia Provincial.

6. 6

   Close the plan or change route

   When it expires, we ask for the order of final discharge, invoking art. 500.2 if instalments were missed. If the plan can no longer be sustained, we prepare the switch to discharge with liquidation (art. 500 bis).

The law that applies

• Art. 499 bis TRLC. If, after the provisional discharge takes effect, the debtor's financial situation changes significantly, the debtor or any affected creditor may seek a modification of the plan; all are served, it is approved and challenged within the periods and in the form of the original plan, it has the same effects and no more than one may be approved. BOE-A-2020-4859
• Art. 499 ter TRLC. Any affected creditor may seek revocation of the provisional discharge if the debtor fails to comply with the plan and, in plans whose payments depend exclusively or mainly on income, also if at the end the debtor did not devote to the dischargeable debt all income exceeding the minimum that cannot be attached, reasonable new obligations and the non-dischargeable debt. Revocation terminates the plan and opens liquidation, but what was performed keeps full effect unless there is fraud, breach of the plan or unequal treatment. BOE-A-2020-4859
• Art. 500 TRLC. Once the plan period passes without revocation, the judge issues the order of final discharge. It may be granted even if the plan was not complied with in full, after hearing the creditors, if the default results from accident, illness or other serious and unforeseeable events affecting the debtor or those living with them and the limits and transfers in payment were respected. The order is published in the public insolvency register and cannot be appealed. BOE-A-2020-4859
• Art. 500 bis TRLC. A debtor with a provisional discharge may set it aside and apply for discharge with liquidation of the insolvency estate; the debtor may also apply for it if the provisional discharge was revoked or the final discharge is not available. BOE-A-2020-4859
• Art. 498 ter TRLC. The provisional discharge takes effect when the challenge period ends without a challenge or from the judgment rejecting it; from then on the effects of the insolvency proceedings cease, replaced by those of the plan, and the duties to cooperate and inform continue until the final discharge, with a report to the judge every six months. BOE-A-2020-4859
• Arts. 496 y 497 TRLC. The plan sets out the payment timetable for the dischargeable debts and the resources to meet it; it allows fixed, income-linked or mixed payments. It lasts three years, or five if the main home is not sold or if payments depend mainly on income, and its period runs from judicial approval. BOE-A-2020-4859
• Art. 498 bis TRLC. Any affected creditor may challenge within ten days if the plan does not guarantee what it would receive in liquidation, does not devote to the debt the income exceeding the minimum that cannot be attached and the new obligations, does not realise non-essential assets when creditors holding 40 % of the dischargeable debt so request, faces opposition from more than 80 % of the dischargeable debt affected, unless the judge imposes it, or requirements are missing. Challenges are decided together by a judgment that may be appealed without suspensive effect. BOE-A-2020-4859
• Art. 607 LEC. Salary, pension or equivalent income not exceeding the national minimum wage cannot be attached; the excess is attached in bands from 30 % to 90 %. All income is aggregated, and the spouse's too unless there is separation of property, and with family responsibilities the percentages may be reduced by between 10 and 15 %. BOE-A-2000-323

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

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