Living here, owing here
Debt in the islands works the same as in Spain, with four differences.
The law is the same one that applies in Madrid or Barcelona. What is different is where your case is heard, how seasonal income is evidenced, which tax authority you may owe money to, and how common this situation actually is here.
Which court
Two commercial courts serve eight islands.
Since the 2022 reform, personal insolvency cases — including those of people who have never run a business — are heard by the commercial courts, not the courts of first instance. In the Canary Islands that means two, both in the provincial capitals.
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Las Palmas de Gran Canaria
Handles cases from Gran Canaria, Lanzarote, Fuerteventura and La Graciosa — the whole province of Las Palmas.
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Santa Cruz de Tenerife
Handles cases from Tenerife, La Palma, La Gomera and El Hierro.
Which of the two applies to you is determined by where your centre of main interests is, which for an individual is presumed to be your habitual residence.
What is different here
Four things a mainland firm will not tell you.
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Seasonal work is normal here
A large share of employment follows the tourist season: contracts that start and stop, months on benefits, overtime in high season and very little in low season. That pattern is not an obstacle, but it does change how your income has to be evidenced — twelve months of payslips rather than three, plus your full employment history.
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IGIC, not VAT
The islands have their own indirect tax, the impuesto general indirecto canario, collected by the Canary Islands tax agency rather than by the Spanish state. If you have been self-employed here, unpaid IGIC is a public debt with its own treatment, and until February 2026 it was routinely left out of any analysis.
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Two courts, eight islands
If you live on a non-capital island, your case is handled in your provincial capital, not where you live. It is worth knowing before you start, because it affects timing and occasional travel.
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Debt here is not unusual
In the third quarter of 2025, the Canary Islands recorded the highest rate of personal insolvency filings in Spain: 48.2 per 100,000 inhabitants against a national average of 31.9. More than a thousand people in three months. Whatever you are going through, it is not exceptional here.
Questions
What people ask before calling.
- Do I have to be in Spain for the procedure?
Not continuously, but you do need to be reachable and available for certain steps, and your centre of main interests has to be here. If you are planning to leave, take advice before you go rather than after: the timing matters.
- Can you deal with me in English?
Yes, for the conversation and the explanations. The proceedings themselves are in Spanish and the documents are filed in Spanish, and documents issued abroad may need a sworn translation. What we can do is make sure you understand every step, which is not the same as pretending the procedure happens in English.
- My debts are with Spanish banks but I also owe money in my home country.
Say so from the beginning. Debts owed abroad are not automatically outside the picture, but how they are treated depends on where the creditor is and which rules apply. It is one of the things that is much easier to plan for than to fix afterwards.
- I have a mortgage on a property here.
A mortgage is a secured debt and it has its own treatment: the guarantee over the property survives, so cancelling other debts does not turn a mortgaged home into an unencumbered one. Whether you can keep the property depends on which of the two routes fits your case.
- How long does it take here?
It depends on the court, on whether there are assets to liquidate and on how complete your paperwork is when it is filed. We would rather not publish an average we have not measured ourselves: figures repeated from elsewhere are worth very little, and the honest answer in a first conversation is a range based on your specific situation.
You can write to us in English on WhatsApp or call +34 684 742 105.