… From the belegal.com website
In plain English, a dacion en pago means handing back the keys to the lender, and in exchange the lender will fully discharge all mortgage debt, not holding you liable in the future. The lender will also renounce pursuing the debt in your home country or elsewhere against any other assets you may hold. This procedure is based on Art 1175 of the Spanish Civil Code, which establishes that a borrower can cancel his creditors’ debt handing in exchange any of his assets.
Jonas can I ask a personal question.
Has your sister-in-law’s financial situation recently changed that has forced her into this situation? Or did the bank really lend her 240,000 Euros knowing her financial position?
Anyway looks like she has had a lucky escape, if you can call a loss of 60,000 Euros (deposit + payments) lucky.