Spanish Bank Loan

kwells1979 · 13 January 2017 at 11:09AM

I know this is probably more suited for a lawyer to answer it I thought I'd try on here first...

In brief:

Deceased Father with outstanding Spanish loan of €8500.
When deceased, father had been a resident in Portugal for the last 2 years (loan taken out whilst living in Spain).

I am heir to the estate but am being told that by Dpanish law I am responsible for the loan?! There was no will but I am legally next in line (son). I'm yet to have the relevant documents drawn up by the notary in Portugal and I'm wondering if I should as I can't e responsible for any debts.

The bank will not put the loan on hold until the house is sold and said they will take action against me if I am the heir and do not pay.

As I am resident in the UK (and my dad was a resident in Portugal) is there anyway that the Spanish inheritance law doesn't apply? or is it based on the fact that the loan is under Spanish law? This is stressful enough as it is without the threat of legal action over a loan that's nothing to do with me.

Thanks for any help.

leespot · 13 January 2017 at 11:14AM

Sorry for your loss.

I'm not familiar with Spanish laws so cannot really help you there. Is there enough money left in the estate to repay the loan your father had? If there is, it is not unreasonable to repay the loan from your fathers estate. You are not personally responsible for the debt at the moment, but your fathers estate probably is.

kwells1979 · 13 January 2017 at 11:16AM

Thanks for the quick reply. The only money in the estate is his house which is yet to be sold. This will easily cover the loan but the only problem is the bank have no interest in waiting and want me to take on the €350 a month repayments. House in Portugal could take months/years to sell (middle of a renovation project in the middle of nowhere).

leespot · 13 January 2017 at 11:22AM

There is almost certainly nothing they can do to you personally for the debt that your father left behind. However, they could probably attach an order to the property or at worst enforce a sale to recover their money.

Regarding the house sale, how much is it worth? You will need a spanish / portuguese lawyer to help you get this sorted, and there will be costs involved, inheritance taxes etc. You really need to take specialist advice for this as without a will things will be much more difficult to sort out.

kwells1979 · 13 January 2017 at 11:26AM

Thank you. Yes, there is a Portuguese lawyer involved as that's where the house is. I'm waiting on her to get back to me about the situation with the bank but taking a while.

I'm more than happy for the Spanish bank to have their money but it needs to come from the house sale and not from me personally. That's what I'm telling them but their response is that by Spanish law everything of my dads becomes mine including his loan repayments.

Hopefully the lawyer will be able to put them off as they're not listening to me. I'm told that if he'd taken out the loan in Portugal it'd automatically be covered by life insurance. Typical.

Thanks for your replies leespot

leespot · 13 January 2017 at 11:29AM

Nothing ever happens quickly in Spain

I would be amazed if they could some way enforce repayments of the loan - just doesn't sound possible at all.

Did your father have any insurance policies? Is there any money in his accounts to repay the loan?

kwells1979 · 13 January 2017 at 11:34AM

No insurance unfortunately. There's €1000 in the bank which the bank has said they will drain each month until its gone and then seek legal action against me if I don't continue the repayments.

I don't want anything from this effecting my own finances. If I go to remortgage in a few years and am turned down due to missed payments of a Spanish loan I'll be livid.

leespot · 13 January 2017 at 11:40AM

Hopefully your lawyer will get back to you sooner rather than later - although there seems to be a few months worth of payments left to tide you over.

MrsTinks · 13 January 2017 at 12:12PM

Not certain (definitely chase your lawyer) - but I'd even be surprised unless there is an agreement between Spain and Portugal if they can do anything about a Spanish debt against a property in Portugal - I'm not even sure they have any way to access his spanish bank account?

As for your credit file, I'vm fairly sure you should be fine on this one. Ultimately it's not your debt here in the UK, and so it's highly unlikely that they would be able to register a default against you here. Whether you would be liable for anything at all is an interesting point... and probably one we will see more often as generations of ex-pats pass away whilst holding property and debts abroad.