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I wonder if anyone else has gone through what it looks imminent for me, or has any views. Legal advice needs to be sought of course but I´m interested to hear anyhow.
As it turned out I got badly stung at the top end of the market in 2006 and now have a house with serious negative equity (€200k+) and a loan (with an offshore lender) that I have been unable to service for over a year due to my work evaporating in front of me.
I have no assets and no short to mid term prospect of earning enough to pay back what I owe in outstanding mortgage payments (about 30k) so the only option I have it seems will be to declare myself bankrupt (following several meetings the bank has already instigated reposession proceedings although I have no idea what the process is or how long it will take).
I understand that in Spain this process is pretty painful and very costly, that the debt is never discharged and the judge would only grant a small income every month and any earnings above this would go back to the lender until the debt is cleared which will be a very very long time, if ever.
My other realistic option is to return to England and do it there where the debt is discharged after one year.
Don´t think I´m trying to shirk any obligations or am happy about this course of action- I am not but I am essentially papped.
Do I have any other options. Any other thoughts?
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Hi Nige – sorry to hear your predicament. Not easy Im sure.
Im sure many have thought about this and its always best to be prepared and know the worse case scenario.
I have also heard that bankruptcy here in Spain isnt that easy and can take forever etc, so if it were me, I would look to relocate back to the UK and do it there. If oyu have no other assets here in Spain, then go to the Comisaria de Police and declare you will be moving ot the UK and renounce your residency (a friend of mine did this – I had no idea you could!)
With regards to the house it does take ages to go through the court procedure but once it does, and after they try to sell it to cover the debt, you will be left with a sum of money owning for which the bank can chase you for. Its likely they wont unless you have a UK asset.
Go back to the UK and declare bancruptcy there and you should in theory be clear! If you come back to Spain in happier times, then you will have the debt still against you which may incurr your bank account to be embargoed and assets seized.
Please please check this with a friendly lawyer forst though!
Good luck!
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There is in Spain a legal procedure whereby you can voluntarily transfer the asset back to the bank through a notary. The fees involved are small in comparison to the asset value of the problem. You surrender ownership (and take the hit) on condition the bank does not chase you and it avoids bankruptcy which is never desirable. It involves simple signing of papers you and the bank.
There are conditions of course but the size of your debt to asset value seems small. (30K)
Your lawyer can advise you better. -
There is in Spain a legal procedure whereby you can voluntarily transfer the asset back to the bank through a notary. The fees involved are small in comparison to the asset value of the problem. You surrender ownership (and take the hit) on condition the bank does not chase you and it avoids bankruptcy which is never desirable. It involves simple signing of papers you and the bank.
There are conditions of course but the size of your debt to asset value seems small. (30K)
Your lawyer can advise you better. -
@logan wrote:
There is in Spain a legal procedure whereby you can voluntarily transfer the asset back to the bank through a notary. The fees involved are small in comparison to the asset value of the problem. You surrender ownership (and take the hit) on condition the bank does not chase you and it avoids bankruptcy which is never desirable. It involves simple signing of papers you and the bank.
There are conditions of course but the size of your debt to asset value seems small. (30K)
Your lawyer can advise you better.Thanks Logan. 30k is the amount I owe in payments! the NEgative equity is 200k!
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If you return to England just to do this your debt will probabley be discharged after 18 months ( 6 monthes plus 12 monthes) but under the 2002 European insolvency legislation and the 2004 Enterprise Act your debt can be recharged should a creditor find out and be bothered to action.
Best
Loco
PS:
Sorry to hear the mess you are in . From what you say you are clearly Bust and should act fast to avoid getting into deeper xxxx.
quote=”nige”]
My other realistic option is to return to England and do it there where the debt is discharged after one year.
Don´t think I´m trying to shirk any obligations or am happy about this course of action- I am not but I am essentially papped.
Do I have any other options. Any other thoughts?[/quote]
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@Loco wrote:
If you return to England just to do this your debt will probabley be discharged after 18 months ( 6 monthes plus 12 monthes) but under the 2002 European insolvency legislation and the 2004 Enterprise Act your debt can be recharged should a creditor find out and be bothered to action.
Best
Loco
PS:
Sorry to hear the mess you are in . From what you say you are clearly Bust and should act fast to avoid getting into deeper xxxx.
Thanks for that Loco.
Are you saying if it can be shown that I returend to the UK for the sole purpose of becoming bankrupt then the debt can be recharged if a creditor takes it upon them to review the case? Or it can be recharged anyway which kind of defeats the point? If the former it can´t be easy to prove that was my only intention?
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Yes and No.
It would be the Bankruptcy that would be annulled which of course would mean the debt would become due again.
The law basically outlaws “forum shopping” i.e choosing where in Europe to declare oneself bust. Actually you don’t even have to go back to England to go bust in England.
The test as to where you should go bust , and I am doing this off the top of my head so the wording may not be 100%, is “where your main economic concern is”
Best
Loco
@nige wrote:
Thanks for that Loco.
Are you saying if it can be shown that I returend to the UK for the sole purpose of becoming bankrupt then the debt can be recharged if a creditor takes it upon them to review the case? Or it can be recharged anyway which kind of defeats the point? If the former it can´t be easy to prove that was my only intention?
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This is actually wrong. Spain is signed up to the EC Regulations on Insolvency Proceedings 2000 so the lender wouldn’t normally be able to seize any assets.
Best Loco
@Inez wrote:
Go back to the UK and declare bancruptcy there and you should in theory be clear! If you come back to Spain in happier times, then you will have the debt still against you which may incurr your bank account to be embargoed and assets seized.
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Nige,
I suspect Logan is talking about dación en pago. If so it is a non starter for you given your negative equity. Even if your lender agreed to do it it could lead to all sorts of problems for you in the future.
From what you have posted, and reading between the lines, bankruptcy in England seems your best bet.
Best
Loco
@logan wrote:
There is in Spain a legal procedure whereby you can voluntarily transfer the asset back to the bank through a notary. The fees involved are small in comparison to the asset value of the problem. You surrender ownership (and take the hit) on condition the bank does not chase you and it avoids bankruptcy which is never desirable. It involves simple signing of papers you and the bank.
There are conditions of course but the size of your debt to asset value seems small. (30K)
Your lawyer can advise you better.
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