The fresh start principle has been incorporated into the Portuguese legal system through the figure of the “exoneration of remaining liabilities”.
This mechanism aims to allow people on good faith who have been placed in a situation of insolvency, the possibility of freeing themselves from their debts and thus guaranteeing them a “second chance”, a path to economic rehabilitation.
The insolvency process is regulated as a universal execution process because, as a general rule, all of the insolvent’s assets must be handed over to the creditors, with the court setting only a monthly amount that will remain with the insolvent, which will correspond to the minimum necessary for their survival and that of their dependent household.
However, this is limited in time, which means that once three years have passed without the debts having been fully paid in the insolvency proceedings, they are extinguished.
The insolvency process is a complex process that requires a case-by-case analysis in order to optimize its use, since it presents a unique opportunity for the insolvent party to start over and create a new life project.