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In bankruptcy, debts can be offset by complying with legal requirements.

Bankruptcy and debt compensation

Sometimes a company owes some invoices to another that it does not pay because, in turn, the latter owes the first other amounts. If one of them files bankruptcy, in what situation are the reciprocal debts?

Well, according to the Bankruptcy Law, it is possible to make compensation. However, a series of legal requirements must be met before the bankruptcy is declared. They are the following:

  • That both debts are liquid, due and payable.
  • That both are the main debtor of each other.
  • That neither has communicated to the other that they are dissatisfied with the debt reflected in the invoices.

In such a case, the solvent company (the one that has not filed bankruptcy) must inform the Bankruptcy Administration that these reciprocal debts exist and that, if the indicated requirements are met, they must proceed to offset them. For example, if the solvent company owes the bankrupt company 5,000 euros and the latter in turn owes the solvent company 7,000 euros, a credit right of 2,000 euros will be recognized in favor of the latter.

In the event that the credit has already been communicated against the bankrupt without having requested compensation, the Supreme Court has ruled that, even if the credit has been communicated and although the list of creditors has not been challenged, if the requirements for the compensation existed before the competition, it can be compensated equally.

Our advisors will study your case and inform you of how you can request debt compensation in bankruptcy proceedings.