Economic crimeCriminal insolvency and bankruptcy fraud lawyer in Spain

When insolvency becomes a crime

Spanish law punishes asset concealment to defeat creditors (alzamiento de bienes, article 257 of the Criminal Code) and fraudulent insolvency (articles 259 to 261), with prison terms of one to four years for the basic offences and more where aggravating factors apply. The pattern is familiar: property transferred to relatives, companies hollowed out into new vehicles, assets moved abroad just before enforcement.

Not every failed business is a crime. Trading losses, honest mismanagement and simple inability to pay are civil matters. The offence requires deliberately placing assets beyond the reach of creditors, and that intention is exactly where these cases are fought.

Where the case is actually decided

• Chronology. When were the debts incurred, when were the assets moved, and what did the debtor know at each moment. Timelines win these cases.
• The nature of each transfer. A sale at market price to an unrelated buyer is one thing; a gift to a spouse the week before a judgment is another.
• Insolvency as cause or consequence. The prosecution must show the transfers caused or deepened the inability to pay.
• The paper trail. Land registry, company filings and bank records decide the outcome, which is why forensic reconstruction matters more than testimony.

For creditors

If your debtor organised their own insolvency, the criminal route can achieve what civil enforcement cannot: asset-freezing at the start, the reversal of fraudulent transfers, and personal criminal exposure that changes the debtor’s willingness to settle. Compensation is claimed inside the same criminal case.

For accused persons and directors

Directors of struggling companies are routinely accused when a business fails and creditors are angry. Legitimate restructuring, payments to some creditors before others, or asset sales at a fair price are defensible. We work with insolvency counsel so the criminal defence and the insolvency proceedings (concurso) tell the same story.

See also: fraud and financial crime, money laundering and tax fraud.

Frequently asked questions

My debtor put everything in his wife’s name. Can anything be done? Often yes. Transfers made to defeat creditors can be prosecuted and reversed, and the criminal court can freeze what remains. The sooner the registries are searched, the better.

I sold assets while my company struggled. Am I exposed? Selling at market value to pay debts is not a crime. Problems arise with undervalued or simulated transfers to related parties. An early review of the transactions usually settles how much risk exists.

Does the Spanish insolvency procedure protect me from criminal liability? No. The concurso runs on its own track; if the insolvency was provoked or aggravated deliberately, criminal liability survives it.

I am a foreign creditor. Can I act from abroad? Yes. Power of attorney and video appearances cover most steps, and we handle the case in English or French.

Why Société Juridique (SCJE)

A criminal practice focused on economic crime, with forensic accounting and digital evidence capability in-house. Offices in Alicante and Madrid.

First online consultation, 15 minutes, free of charge. Urgent assistance 24/7: +34 669 30 21 13.