Husband (separated) going bankrupt in UK - will it affect our house in SPAIN

Betfairy

Hello everyone

I have been on the forum for sometime trying to work out the answer to my questions, but it is pretty tricky...

Perhaps someone can help.

My husband and I own a quasi -legal house in Spain. Jointly. No mortgage. We own the land upon which the house is built and we also own some adjoining land, jointly.

He had racked up some fairly decent personal unsecured debts in the UK, mainly on credit cards, before he left, and god knows what else he has been up to. We have two children who live here with me.

There is talk that he intends to go BR in the UK to relieve himself from the 40k (minumim I reckon) debt he has in the UK, but I am really worried that I will have debt collectors "collecting" here. I (we) spent the last 10 years paying for the land and building the house that I live in, and cannot imagine losing it all now!:(:(:(:(:(

What are the legal implications, and chances of this happening? He says something along the lines of that because his main interests are in the UK, (he lives and works there) that his UK BR will only deal with UK assets. There are NO uk assets in my or his (as far as I know) name. But he is very difficult and vague to talk to, so I just dont know. I have read that CC companies can sell the debt to DCA here in spain, and they can collect here...??

I live a fairly self sufficient life here in the countryside, and cannot afford to not have a 'free' home. Can they force me to sell the house? I understand from the forum that they cannot, and so long as we dont sell the house, then they cannot collect? And what about contents, and cars etc. Can I just say they are all mine?

Well, any advice much appreciated

(PS I say quasi legal house - I am not sure of the full legality situation, its extremely complicated - basically it is 'out of law' and is neither illegal nor legal, and so I should imagine very DIFFICULT to sell at full value, though I would also imagine not UNSALEABLE just would not be 'worth' what it would be. As I understand it, the LAND could be sold and what evr is on it goes as well. SO effectively it could be sold for the value of the land (plus a bit) I guess, which would probably be around 40k ish... not bad for a 4 bed villa with a pool with unbeatable mountain and lake views! :mad:

Im scared!

coolcait

No-one can pursue you for any of your husband's debts - unless any of them are joint debts.

But, I'm afraid that overseas assets will form part of your ex-husband's bankrupt estate. If he says that the OR will only be interested in UK assets, he has either been misinformed, or is trying to mislead you.

The OR/trustee will have to decide whether or not it is worthwhile pursuing those assets. But they do have the right to do so.

They can only pursue your ex-husband's share of all the assets.

I'm sorry to be the bearer of bad news . I think you really need to get some advice yourself.

Betfairy

Hi coolcait

Thanks for the reply. So according to this then, the OR/trustee could force the sale of the house and half of the proceeds would go to his estate? And I would keep half?

Would it be fraudulent then to have the house put in my name here then (effectively buy him out without giving him any money as I dont have any!) and then let him go bankrupt. It doesnt sound great, as in it sounds like one shouldnt be able to do that.

I was looking throught the forums yesterday and the BIS website and came accross this.

If your centre of main interests is in another EU state, then any bankruptcy proceedings in the UK can deal only with assets in the UK. These would be known as Territorial Proceedings, under the EC Regulation on Insolvency Proceedings 2000.

So if it were argued that his main interests were in spain, (ie he has house and family here??) would this affect things? Territorial proceedings?

Anyway, thanks for the help

fermi

If he lives in Spain and his main centre of interests is there, then he cannot make himself bankrupt in the UK.

See: http://www.bis.gov.uk/insolvency/personal-insolvency/foreign-issues#2

The EC Regulation on Insolvency Proceedings 2000 came into effect on 31 May 2002. It will affect you if you live in an EU Member State - apart from Denmark, which opted out of the Regulation. Under the Regulation you can open insolvency proceedings (make yourself bankrupt) only in the country where you have your "centre of main interests".

There is no definition of a centre of main interests, but the court will usually regard the country where you carry on a business or earn your living as your centre of main interests. The court will also consider the place where you normally live, i.e. your country of habitual residence. If you are not employed or self-employed your centre of main interests will be the country you normally live in at the date of the petition.

The quote you found only applies if a creditor makes you BR.

If his centre of main interests is in the UK,

If your centre of main interests is in the UK, your trustee will be able to deal with all your assets throughout the EU, except if bankruptcy proceedings have also been started in another EU state where you have had a business (except Denmark). In that case, a trustee appointed in that other state will deal with the assets. Assets you have in Denmark, or any countries outside the EU, will be part of your bankruptcy estate in the UK. The trustee may encounter problems in selling them if they are not "recognised" in a foreign jurisdiction as having power to sell them. The trustee may require co-operation from you and they may need to apply for a court order in the foreign country to deal with the asset.

fermi

Also see this link from the OR's manual.

DEALING WITH PROPERTIES IN SPAIN

fermi

Betfairy wrote: »

Would it be fraudulent then to have the house put in my name here then (effectively buy him out without giving him any money as I dont have any!) and then let him go bankrupt. It doesnt sound great, as in it sounds like one shouldnt be able to do that.

Doing that in the UK would be a "transaction under value" which is prohibited. The OR/trustee would be able to go after you for the asset/money regardless, via the courts if necessary.

As the property would have technically been a bankruptcy asset in UK proceedings, despite being abroad, I think the same would apply. They would come after you and/or seek to reverse the transaction via the courts.

sort_me_own_yard_out

Would the op be able to divorce and have house /land signed over to her as part of a divorce settlement and end all finances with him before he goes bankrupt would that work?

Betfairy

Hmmmm.... seems like its going to be a headache.

Thankyou so much Fermi for you input. Not quite sure where to go from here. I'll keep you posted as I find out/work out what to do.

At least I can go back to my estranged husband with some info, he is not a bad person so would not want this to happen.

ALternatively, if he cannot pay his credit card bills, will the CC companies make him go bankrupt (not in their interests??) or chase his assets in SPain via a spanish DCA?

I am off to read the article you posted Fermi

Thanks