Repossession in Spain

llh189

A good friend of mine returned from living in Spain last year, he is single with no UK assets, he works 35 hours per week and earns minimum wage, rents a room in a family house and lives pretty much day to day. He has no debts in the UK, no credit cards, is never overdrawn and doesn't own a car.

He returned to the UK after becoming single and losing his job when the recession hit Spain.

About four years ago him and his girlfriend went to Spain chasing the dream, bought a really lovely apartment for 180k on 100% mortgage, both of them had good jobs and they paid interest and capital on their mortgage.

The relationship broke up his ex moved back to the UK and they switched the mortgage to interest only - he has been managing to pay his share of the interest only plus all the associated local bills but the interest only period on his mortgage has run out - the ex has paid her bit too. No defaults or missed payments to date.

Now neither if them can afford to start the capital repayments, my friend flew out to Spain to talk to their bank who did put them forward for voluntary repossession by their bank - this was denied as the basis that the bank was already flooded by properties and didn't want to take anymore on.

My friend and his ex are now not sure how to proceed.

The are fully aware that they will have to hand the keys back to the bank but do not understand the process and have no one to advise them.

Neither of them have any assets, both have low paid jobs, the apartment is in negative equity by about £30K.

They have tried unsuccessfully to rent the apartment out both to holiday lets for longterm lets to no avail.

The property is on a relatively exclusive independent golf resort but around 50% of the properties there are either for sale or vacant.

Does anyone know what could happen next, how long the process could take, the effects on their UK credit history etc etc, how will their Spainish bank seek to recover the debt associated with the negative equity?

Please feel free to ask questions or move to a different board if this is in the wrong place!

I have already verbally bashed him about the stupidity of getting himself in this situation - nicely though as he is really quite nice!

Thanks

Conrad

I do not have particular expertise in this but I would'nt expect eh Spannish Bank to seek anything from them in the UK as thier costs in so doing would be significant, but the likely benefits could be minimal as this couple have no assets, and even if they did, gaining a court order to posesses assets would be complex and again time consuming.

Spannish Banks are swamped with repos, so I suspect many of these, especially those from foreigners, simply get written off.

Nothing is certain though. It's a simple porcess to go Bankrupt in the UK and the Spannish lawyers would also factor this in when considering whether to chase Brits.

Brock_and_Roll

The Spannish banks are still "fire fighting" at the moment, but they will deal with each property eventually. Either that or they will sell them to "specialists".

Just like the UK they will look to recover the shortfall (which after costs will probably be very significant). They will happily go after people in EU countries, but as your friend has not assets, obviously he wont be there No1 target. Nevertheless it would be foolish to think this will just go away.