SPANISH DEBT – CAN THEY PURSUE ME IN UK? – Since the financial crisis in 2008 Spain has seen well over a quarter of a million properties repossessed. A staggering figure, and are large proportion of these repossessions are foreign owned properties. At EU Property Solutions we find it incredible so many British and Irish borrowers feel they can merely “hand back the keys” and walk away from the property thinking they are somehow immune to any consequences once back home.
Many borrowers simply post their keys through a Bank or representing solicitors’ letter box and make a run for it. It is actually something out of the movies! These debtors have the impression that Spanish creditors’ cannot pursue their home country assets and nor that the Banks have the time or resources to pursue overseas. This may be true in respect to small balances but in truth Banks are stepping up their overseas debt collection and debtors with this mind-set could be left to rue this misjudgement.
In order to promote free-trade commerce throughout Europe legal cooperation is essential and thus legal mechanisms are in place to facilitate overseas perusal. This makes it nigh on impossible for a UK or Irish High Court to raise its own motion on grounds for non-enforcement or review.
Anyone who signs a mortgage deed in Spain, including guarantors, is personally liable for the loan. Any legal action with likely be notified to the Spanish Address on which the mortgage has been placed, and although logical, many overseas borrowers in Ireland and the UK will be unaware of any proceedings against them until the process is gathering a pace.
In terms of debt perusal in the UK or Ireland lenders can look to recover your home assets and many lenders will appoint UK Debt Collection agents and this could lead to an effect on your home country credit report. The Spanish lender can look to put a charge on your property even if it already has an existing mortgage and can even enforce an Attachment of Earnings Order. Spanish lenders to seem to be developing a greater appetite for overseas debt perusal given the magnitude of balances and Banking system overhaul.
EU Property Solutions hear too often about people handing back their property keys and wiping their hands of Spanish lenders only to realise down the line in the future they are still liable and are being actively pursued, and most importantly discover THEIR OWN HOME IS AT RISK. Just last week two advisors in Costa Del Sol met a Spanish Bank Administrator who claimed he often has over 20 sets of keys delivered a day by foreign owners!
It is imperative that if you have surrendered your property you enter dialogue with the relevant lender to minimise the exposure and risk of your home assets. EU Property Solutions can assist anyone in this situation so please contact the team today on +44 (0) 330 1241230 to arrange a free initial consultation. Also keep a close eye on our website for our first free downloadable report which focuses on European Property Issues and Forecasts.
James Bell – Director