Debt settlement procedures: requests from those with no assets on the rise

More and more people are requesting (and obtaining) the total write-off of their debts, even if they are completely insolvent – that is, they have nothing to offer their creditors. The so-called ‘debt relief for insolvent debtors”, which can be invoked only once in a person’s lifetime, was introduced into the Crisis Code (Legislative Decree 14/2019) at the end of 2020 to give a second chance to citizens who have no financial means (either now or in the future) to service their debts.

Over five years (from 2021 to 2025), the number of applicants has grown exponentially, rising from 159 applications in 2021 to 1,166 in 2025. And the number of citizens who were granted it rose from 24 to 238.

A trend triggered by the increase in financial difficulties but also by a greater awareness of the procedures relating to excessive debt, which enable the management of crisis situations faced by private individuals, professionals, agricultural businesses and small enterprises that are not subject to bankruptcy or compulsory liquidation.

These are the pathways set out in Law 3/2012 (the ‘suicide prevention’ law which was subsequently amended and incorporated into the Crisis Code), to which, in 2020, the debt relief procedure for the insolvent was added.

However, the rise in applications was not limited to those submitted by people with no assets. Between 2021 and 2025, applications for access to other over-indebtedness procedures (minor composition, debt restructuring and controlled liquidation) have almost doubled, rising from 4,785 to 9,483. The most commonly used procedure is controlled liquidation, which is available to consumers as well as professionals and non-bankruptable businesses (debt restructuring, on the other hand, is reserved for consumers, whilst the ‘concordato minore’ is aimed primarily at professionals and businesses).