AG: discharge bars in Directive 2019/1023 lack direct effect

Advocate General Jean Richard de la Tour has proposed that the Court of Justice hold that EU primacy does not oblige a national court to disapply a domestic debt-discharge bar even if it conflicts with the restructuring and insolvency directive, because the provisions at issue cannot be applied directlyEuropa. In his Opinion of 22 October 2026 in Case C-578/25 Ariez, delivered on a reference from the Audiencia Provincial de Valladolid, he concludes that neither Article 20 nor Article 23(2) of Directive (UE) 2019/1023 is unconditional and sufficiently precise, so neither has direct effectEuropa. National authorities and courts must nevertheless interpret their domestic law consistently with the directive's purpose as far as possibleEuropa.

The reference arises from a joint insolvency in which Oscar and Vanesa, an insolvent couple, applied for discharge of unpaid debts on 10 September 2024. The Agencia Estatal de Administracion Tributaria (AEAT) opposed discharge for Oscar under Article 487(1)(2) of the texto refundido de la Ley Concursal (TRLC)Europa, because a final decision of 4 January 2016 had declared him subsidiarily liable for the tax debts of a company he managed. That provision states that a debtor who, during the ten years before the discharge application, was the subject of a final decision extending liability cannot obtain discharge of unpaid debts. The bar lifts only where, by the date the application was lodged, the debtor has paid all of the debts within their liability in full. The court of first instance refused Oscar's discharge, and he appealed.

The sums illustrate why the referring court is testing proportionality. After liquidation of the couple's assets including their home, debts of 282,000 euros remained, 17,856.95 euros had been repaid in the liquidation, and only 10,000 euros of tax debt could be discharged under the statutory ceiling, leaving 20,547.19 euros of tax debt payable. The appellant argues the AEAT is blocking the whole discharge to protect at most 10,000 euros of tax claims despite his good faith, which he says is disproportionate within the meaning of the Court's Corvan and Bacigan case law.

The Advocate General's reasoning turns on the structure of the directive. Article 23(2) lets Member States maintain or introduce discharge restrictions in certain well-defined and duly justified circumstancesEuropa, introducing its examples with words equivalent to "such as", and recital 80 confirms that additional derogations are not precludedEuropa. Because each Member State chooses which exceptions to implement, and because Article 20's general right of access to at least one discharge procedure is itself qualified by those exceptionsEuropa, he finds neither provision states an obligation in unconditional and unequivocal terms that a court could apply directlyEuropa. He recalls that the Court already held in Corvan and Bacigan that the Article 23(2) list is illustrativeEuropa, that add-on bars are permitted where national law shows they pursue a legitimate public interestEuropa, and that the national court reviews their proportionality, without exceeding what is appropriate and necessary. The Opinion calls those premises debatable: it notes that conflicting Spanish case law tends to show a consistent interpretation would not be impossibleEuropa, but maintains that this does not create direct effectEuropa.

The legal basis is Article 20 and Article 23(2) of Directive (UE) 2019/1023, Article 487(1)(2) of the Real Decreto Legislativo 1/2020 (TRLC) as amended by Ley 16/2022, and Articles 3, 41(1) and 43(1)(b) of Ley 58/2003 General Tributaria.