Bankruptcy in Spain? [any advice welcome!]

dankybett · 16 February 2018 at 9:13AM

I am hoping someone here could give some advice are point me in the direction of where I could get some advice to help my brother who lives in Spain.

He is an English citizen living in Spain. He took an expensive interest only mortgage out on a property over there around ten years ago just before there was a bit of a crash in the market. I am not sure of the exact figures but my understanding is his mortgage is around 150k and the property is now worth less than 50k.

My brother has struggled to pay this mortgage ever since it started. Even though he has negotiated to only pay the interest on the mortgage, it was really more than he could afford to pay on his low salary. He has been working seven days a week full time and has not nowhere with it.

The house now has woodworm in the roof and is a health and safety risk which he cannot afford to fix (and I imagine makes the house even less valuable).

The guy really sounds like he has had enough, and the mortgage seems to be central to a lot of his problems (his partner has also left him to raise their two children, which is also hard for him with the amount of work he is doing).

However, when I have asked him if he has thought about giving up the mortgage or filing for bankruptcy he has always been of the belief it is impossible to do so in Spain. As far as he is concerned he will just have to continue struggling to pay it for the rest of his life.

So money savers, anyone have an idea of if there is anyway out of this for my bro?

Thanks for reading big wall of text. You guys are great.

DCFC79 · 16 February 2018 at 9:23AM

Have you googled going bankrupt in spain ?

First link is from elpais, looks like a news site. 4th link is intrresting.

haggis0073 · 16 February 2018 at 9:26AM

have a read, https://www.lovemoney.com/news/16438/bankruptcy-tourism

is your brother moving back to uk? as it seems like that he could file for BR here and include the debt, but if he goes back to spain after BR then they could pursue him

National_Debtline · 16 February 2018 at 5:44PM

Hi dankybett

If someone lives in an EU member state (like Spain) they can only go bankrupt in England or Wales if it is their main centre of interest, and has been for the last 6 months. Although there is no definition of centre of main interest it is generally considered to be the place where someone mainly works and lives.

If your brother intends to stay in Spain he will need to apply for bankruptcy there. Ideally he needs to try and get some impartial debt advice from an organisation based there first. He could try searching for something like the equivalent of our Citizens Advice Bureau.

Susie
@natdebtline

dankybett · 17 February 2018 at 10:31AM

Thanks everyone for the replies. He can't move back to England unfortunately because he has children in Spain (and their Spanish mother would not allow a move).

After doing a bit of reading, it does seem Spain has some rather archaic laws around defaulting on debt but it sounds like some people have had some relative success by hiring a lawyer to negotiate payment plans with banks. I have reached out to a Spanish legal firm to see if we can get some further advice.

Thanks everyone.

Bankruptcy in Spain? [any advice welcome!]

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