Judgment of the Court (Second Chamber) of 7 November 2024.Agencia Estatal de la Administración Tributaria and S.E.I v A and Agencia Estatal de la Administración Tributaria.Reference for a preliminary ruling – Judicial cooperation in civil matters – Directive (EU) 2019/1023 – Procedures concerning restructuring, insolvency and discharge of debt – Article 1(4) – Subject matter and scope – Extension of procedures to insolvent natural persons who are not entrepreneurs – Article 20 – Access to discharge of debt – Article 23(1), (2) and (4) – Derogations – Exclusion of specific categories of debt from discharge of debt – Natural person who has become insolvent – Good faith of the debtor – Conditions for access to discharge of debt – Exclusion of claims governed by public law.Joined Cases C-289/23 and C-305/23.

This judgment concerns the interpretation of Directive 2019/1023 on restructuring and insolvency, particularly regarding discharge of debt provisions. The essence of the judgment is that it clarifies how Member States can implement derogations from debt discharge rules. The Court ruled that while Member States have discretion to restrict access to debt discharge beyond what’s explicitly listed in the Directive, such restrictions must be well-defined and duly justified under national law. The main provisions interpreted include:

• Member States can exclude certain categories of debt (like public law claims) from discharge, but must justify such exclusions
• When extending debt discharge procedures to non-entrepreneurs, Member States must apply all relevant provisions of the Directive
• States can set quantitative limits on debt discharge without basing them on actual debt amounts
• Restrictions can apply to negligent/imprudent behavior even without bad faith

The judgment is significant as it balances Member State discretion in implementing insolvency rules with the need to ensure effective debt discharge mechanisms. It particularly impacts how public claims (tax, social security) can be treated differently from private debts in insolvency proceedings.