Cannot Pay Mortgage Is there Any Advice for Me?

The first thing one should do when aware that they cannot meet their monthly mortgage repayments, is talk with the bank director as soon as possible. The banks will often not tell you that due to non payment for three months, they can embark on legal action to repossess your home. This process can be stopped but you may have incurred legal costs on top of the debt. If the bank makes you an offer for some kind of payment plan, try to get this in writing. Many have thought they had an agreement only to discover that the bank has started legal proceedings to recover the debt.

Many who are in debt may have a bargaining tool; the now well known abusive ‘Clausula Suelo’ floor clause. You may have a debt but the bank could owe you money. The amount owed may even offset the debt. In these cases it is best to use a lawyer with expertise in bank products. Claiming can also buy you time.

It is imperative that you are aware that negotiating with Spanish banks can be difficult. Most are not aware of the Spanish banks tendencies. Many are used to the more simple agreement that can be made with UK and other northern European banks.

For those who know that they are not in the position to pay the debt and continue monthly payments, should be aware that the banks can and do chase these debts to other European countries. Using an European Enforcement Order (EEO), banks have successfully pursued their case in the UK courts putting embargoes on the debtors UK home.

Many have been assisted to avoid this I personally have just mediated with a bank which has allowed the client to return the keys. In this case, the bank has been able to find a buyer for the property. With tactful mediation, this particular homeowner will not have to pay the debts of the community or IBI as the bank will be paying these. owner will pay the plusvalia. When paid, a lawyer will assist in reclaiming the amount.

If the debt is ignored, the banks will take the homeowner to court for payment of the full outstanding mortgage and legal costs. often the owner will not even be aware of this process until served with court papers. At this stage the client will have to pay the full amount claimed. If not able to do so, the bank will continue via the courts to repossess the property. In many cases it does not end there, the banks are now aware of the successes of their UK lawyers enforcing claims in the UK.

Do not ignore a debt. For further advice or assistance email: myra@citizensadvice.org.es

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.