Defaulting on a Spanish mortgage?

mr_hat_2

Ive bought a Spanish property, with a Spanish mortgage. Unfortunately things have not worked out how I hoped they would and now I cant afford the mortgage any longer. The property is probably worth less than what I owe and ive been unable to sell it. So my question is, if I just stop sending money over every month I assume the bank will reposses, but will they be able to claim any of my assets or money in the UK, plus will it affect my credit rating in the UK?

Trollfever

Thousands of Britons face losing their dream homes in Spain as the country's property market lurches from paralysis into freefall.

http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article4368519.ece

seven-day-weekend

Sorry, I don't know the answers to your questions, but can't you rent it out to help with the mortgage?

AlanG_3

mr_hat wrote: »

Ive bought a Spanish property, with a Spanish mortgage. Unfortunately things have not worked out how I hoped they would and now I cant afford the mortgage any longer. The property is probably worth less than what I owe and ive been unable to sell it. So my question is, if I just stop sending money over every month I assume the bank will reposses, but will they be able to claim any of my assets or money in the UK, plus will it affect my credit rating in the UK?

This website may be useful. 1 link here (see 3rd post) , may be others.

http://www.spanishpropertyinsight.com/forums/viewtopic.php?t=3390&highlight=morgage+mortgage


Alan

Trollfever

Thanks for the link above.

“Under EU regulations, Spanish lenders can pursue outstanding mortgage-related debts against assets in the UK,” says Susana de las Cuevas, a dual-qualified Spanish and British solicitor with Irwin Mitchell in London. “Ignorance is no defence, so you can’t argue you didn’t know you would be liable in the UK.”

From:

http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article3889812.ece

missile

If you let the bank repossess as many do in spain (and UK), you may get far less than the property is worth. You are liable for their selling costs and shortfall to redeem mortgage.

mr_hat_2

oh dear... I have been told that it is very unlikely they will pursue you here, but your replies have left me more concerned. :eek:

geoffky

The Spanish Banks Put Charges On Your Uk Property...unless You Pay Them..

missile

mr_hat wrote: »

oh dear... I have been told that it is very unlikely they will pursue you here, but your replies have left me more concerned. :eek:

If you are bankrupt and genuinely can't pay fair enough and you have my sympathy. However someone has to pay for those who do a runner, passing the costs onto everyone else.

mr_hat_2

geoffky wrote: »

The Spanish Banks Put Charges On Your Uk Property...unless You Pay Them..

Could you explain how this works, i'm not sure I understand.

PasturesNew

mr_hat wrote: »

Could you explain how this works, i'm not sure I understand.

It means the Spanish bank will know who you are/where you live in the UK and they will register a claim against your UK property for the amount you owe them, so you won't be able to sell your house here without settling the debt.

This would also run the risk that they would still want payments from you and might decide to force you into a sale to get their money back (but I don't know how much power they have to do this).

But certainly the debt won't stay in Spain and so you can't run from it.