I have to date avoided writing on the subject of the ‘European Enforcement orders’ for various reasons. One being that I did not want to jump onto the ‘scaremongering’ bandwagon. Two, which may seem presumptuous of me but do know that our website is navigated not only by members but by professionals. I was concerned about providing the information to some Spanish entities with information they not as yet been party to. Three, I wanted some first hand information on this important matter which I now have. I have been involved in a process associated with a EEO. Following the case as it unfolds both here in Spain and the UK.
The group lawyers were asked by me to step in when a client from a previous business of mine who lives in the UK, contacted me after being served with an EEO at his home. This client had bought two properties as an investment at the height of the boom only to find that with illegal clauses and the sudden increase in interest rates, was no longer able to meet the mortgage repayments. The courts only sent a few emails communicating that the mortgage was in arrears. The next he knew, was when he was served the said papers at his UK home to appear in court. The Spanish bank via UK lawyers are asking for the courts to embargo his home to pay the debt.
What is an EEO? EC 805/2004 This regulation creates a European enforcement order for claims which are uncontested by debtors. The European enforcement order is a certificate which enables judgments, court settlements and authentic instruments on uncontested claims to be recognised and enforced automatically in another Member State, without any intermediate proceedings.
What does it mean? That anyone in Spain or other EU countries who claim that you are a debtor, can take direct action to have you appear in a court, in any country where you have assets so these can be embargoed to pay the alleged debt.
The process to obtain the EEO are relatively simple. Some banks are already using this authentic instrument to chase those who have not been able to pay a mortgage debt. This does not include those who have been able to procure ‘dacion en pago’ (where the bank has agreed to take the property in lieu of debt) The latter must be signed by the bank and debtor at the notary to be assured that the debt is no longer pending.
You may or have not been negotiating with a bank or other about a debt. You may find that instead that you have a EEO served on you after a search has been made to find your assets. It is important to be aware of these measures as the court date and the notification can arrive without enough warning for you to take the necessary steps to challenge the order.
Our lawyers have enough experience and knowledge of this regulation to be able to act quickly. In the case mentioned above, they have been able to collaborate and provide information to the British lawyers so that the case has been stayed in the courts in order to have time to take the necessary actions in Spain.
Those who are finding problems paying their mortgages, do not let the proceedings reach this extreme, contact our lawyers for any options you may have. There are actions that can be taken that you may not have contemplated. Due to abusive clauses in many mortgage contracts, the probabilities of having a property repossessed have been lessened.
For further information please email Myra
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