Reply To: Being repossessed ? Legal Overview




I think the banks are “writing down” the value of their loan books rather than writing off at the moment. They are making provision for bad debts. Here in Spain, a business cannot carry one years losses through to the next for tax purposes (unlike the UK) so the Banks will write off as much as their profit as possible rather than get hit by a huge loss in a couple of years time with little tax relief to offset some of those losses.

There is no doubt that the debt can be chased across EC jurisdictions with little effort and relatively little cost, so I don’t think we will see the banks letting things go if they think there is a route to recover even in 10 years time.

I would think that as so many now already have London branches or are even part of a UK group, they already have tracing and recovery departments there. I guess that “worthwhile” debts (say 40,000 EUR plus) they will chase themselves and smaller ones they will give to UK debt collectors on a no win – no fee basis. Even if they have costs of recovery of 25% of the debt, they are better off collecting what they can in that way. And beside, the interest will continue to accrue even after judgement.

I think it will be wait and see, but I really do think that those holding out a hope that with no LFO on the property the mortgage will be declared void will find themselves in a losing situation in the courts in the UK and Spain.