Home Repossessions in Spain: A Legal Perspective

[ANON]

If a British citizen owes money on a mortgage, can this debt be passed on to their children , even though they are in the UK, are adults, and have nothing to do with the property?

[Marta]

Hello Anon,

No, this is not possible. It could only occur in the event that the owner of the property had passed away, the inheritor accepted the will and the inherited goods had a debt. The inheritor would also be inheriting the debt.

[Mandy Marbella]

Dear Lawbird,

Is there any way at all to take these banks to a tribunal? it seems the people who want to try to keep going by means of interest only or extending the mortgage term - the banks are not interested in helping. My situation is that I have positive equity and I have the feeling the bank does not want to help as they would like to keep the house. I am financially pushed at the moment and have applied to Banesto to have an interest only payment, my present payments are 1/3 interest and 2/3s capital... The bank clerk suggested why didnt I give the house back to the bank? why should I do that, perhaps because there is around €150,000 equity in the house? I would be able to manage very well the interest only... (around €400) rather than €1200.00. But after sending my paperwork they came back to say that my financial position is too weak to REDUCE my payments!!!! Do they understand what they have said? they dont find it too weak to pay the €1200.00!! I wonder really - or there is someone who has an eye on the house? What would or could be the next course of action? any comments would be appreciated.. I am here in Marbella

[Anon London]

Has anyone on this site had the Spanish banks chase them in the UK, if we are supposed to be part of the European Union why are we not following equal rights and the Spanish banks are so backward.

[Anon London]

No as per no one can answer my question!!

[Patricia]

Dear Mr. Toxic Debt,

Please accept my apologies for this late reply.

The best way forward is to come to an agreement with the bank about the mortgage payments. If the bank took the house finally to auction, there is the risk that the amount you get after the sale does not cover the debt you have with the bank and therefore the bank will go against the debtor´s income. If after the auction, the sale price was higher than the debt, the remanent would be for the debtor. You must take into consideration that once in arrears, the debt is increased very quickly as the bank starts to apply a lot of interests on delay. On top of that, there are court costs, so the final amount of the debt can end up being quite high. Also, be aware thart the selling price when a property is sold by auction is far below the market price.
In your case, we believe that the bank would be in advantage if they agreed for a Dacion en Pago, as they can sell the property for about 110.000 Euros in the free market, and as your debt is of 60.000 Euros, they would not be in loss. A good negotiation would be to negotiate with the bank a Dacion en pago asking the bank to compensate with an aditional amount. Another option is that the Dacion en Pago is signed bound to the fact that if the property is sold over the a certain amount ( negotiated with the bank ), the remanent is paid to the debtor.
The bank may be reluctant to go for any of these options, and therefore these are the remaining options:

1. Hand over the house to the bak and lose 50.000 Euros.
2. Continue to be in arrears and let the bank repossess your house, with the consequent sale of the house in public auction. The risk here is related to the amount the bank gets after the sale; if below the debt, the bank can pursue your assets, in Spain and worlwide, until the debt is cleared.

Option 1 sounds as the least detrimental.

Regards,

[Chris M]

Hi Lawbird I came to Spain 7 years ago and bought a restaurant with an S.L. company three years ago my wife and I took out a credito de polica for 30,000€ with Banco Popular, first guarantor the company second guarantor us personally and since then we have been paying interest only. But this year because of the crisis it looks like we are going to have to quiebra the restaurant. My question is what in your opinion will happen to the debt with credito balear as we owe money to the Seguridad Social and Hacienda and proveedores as well. We have no assets in the UK.

[Amanda]

Why is everyone getting in a state. Its Spains fault that property is worthless now. Let them say this and that but I have heard nothing about anyone being chased in the UK by Spanish banks its stupid archaic threatning and against every ones humans rights. Take a stand and stop listning to the hype and corrupt housing market!!
.

[susan]

Could you please advise, my son has a Spanish mortgage which has not been paid for some time he has also remortgaged and the property in Spain has negagtive equity. He received a telephone call from a third party stating that if he signs the property over to them the debt will be cleared, which he has done, although I cannot understand why someone would want to do this considering how much negative equity there is in the property, what type of company could this be?. He has never heard from the bank again. Have you heard of this happening before?

[Anon London]

Thank you Amanda I feel the same, I will go to the Courts as its all threatning and let them come after me. I was told there is no way I could sell for years so what could I do but walk away. Its their problem and yes and archiac law.