A self-employed person with more than 38 years contributing to Social Security has managed to get the Superior Court of Justice of Madrid to recognize him 10,632.32 euros for delaying his retirement and continuing to work once he has passed the ordinary age. Social Security had denied him that amount, alleging that he owed a debt to the Treasury, but the Social Chamber corrected the INSS and the trial court and ruled that this debt was extinguished when a Commercial Court granted him what is known as a second chance.
According to the ruling STSJ M 456/2026the plaintiff, born in 1956 and registered as a self-employed worker since November 2013, accumulated a debt with the General Treasury of Social Security of 102,851.08 euros. Faced with this situation, he chose to request voluntary bankruptcy proceedings, the judicial procedure that allows individuals and companies to reorganize debts that they cannot fully pay.
In November 2022, the Commercial Court number 18 of Madrid granted him the benefit of exoneration of unsatisfied liabilities, the figure popularly known as a second chance and which frees the debtor in good faith from most of the liabilities that he cannot assume. In his case, the initial 102,851.08 euros were reduced to 36,938.36 euros, divided into sixty monthly payments of 615.63 euros.
Already in March 2023, the self-employed person requested retirement pension and Social Security initially denied it when it was understood that he was not up to date with his contributions. It rectified a few months later and recognized him a pension of 1,878.89 euros per month with 100% of the regulatory base, once the Treasury itself issued a certificate confirming that there were no pending claims against him.
The conflict came when he requested the supplement for delayed retirement, which Social Security also denied him with the same argument, that is, that during the year prior to retirement he had maintained a debt with the organization and, therefore, did not meet the requirement of being up to date. The Social Court number 19 of Madrid supported this criterion in May 2025 and dismissed the retiree’s claim.
The TSJ clarifies that a debt exonerated by a judge is not the same as a prescribed debt
On appeal, the Social Chamber of the Superior Court of Justice of Madrid distances itself from that interpretation and agrees with the self-employed person. The magistrates distinguish two different scenarios: a prescribed debt is prescribed because the legal period to claim it has elapsed, while an extinguished debt disappears because a judge eliminates it by legal imperative.
The second opportunity granted to the plaintiff did not produce a prescription, but rather a judicial termination. And an extinguished debt does not exist, it cannot be claimed by the Treasury and, consequently, it cannot be used to deny a right linked to retirement.
The court points out that the Law 21/2021seeks to encourage workers to delay their retirement with financial bonuses. Depriving the pensioner of the supplement for a debt that no longer legally exists would void the incentive and punish those who have had the second chance.
What you need to know about this ruling is that the self-employed who take advantage of this mechanism of the Bankruptcy Law are not automatically excluded from the rights linked to being up to date with Social Security. If the court order declares the debt extinguished, that same order is valid against the Treasury.