Spanish Mortgage Shortfall - Chasing Debt In UK

HI There, am new to this and would really appreciate some help.

I lived in Spain for 11 years, in 2006, we bought a big house with a big mortgage, times were good, had earned good money from my previous property and was earning a good income.  We purchased a house for 750k, and took a mortgage of 400k, so put down 350k deposit. Times changed, things wet very wrong, very quickly, income stopped pretty much overnight and could not find work to support my family or pay the rent.  In 2010 we took the decision to rent the house out and move back to the UK.  We rented the house out, although the rent couldnt cover the mortgage, I supplemented for a bit but couldnt cope.  I spoke to the bank who were not prepared to do anything.  It all got too much and I stopped paying the mortgage, the tennants then moved out.  All communication with the bank broke down and the have last year repossessed the property.  I have resigned myself to the fact I have lost the 350K euro deposit we put down, but now understand that I can be persued for any shortfall created in the repossession due to high costs,penial interest rates and banks taking what they can for the property and then chase the debtor for the rest.

At present I have no cash or assets in the UK, however, this will change at some point due to inheritance and the fact I now have a decent job.

Really, I need people view on this situation, if anyone has had a similar situation and how they have dealt with it.

I have come to terms with the fact I have lost my home and the 350k we invested into it, what I now need to do is safe guard my families future so we have no more misery from this situation.

All help and suggestions would be very much appreciated.

Thanks

Sounds very sad and you seem to have lost a lot which is such shame.

When the bank sell your house and if there is any oustanding debt then you will still be liable to pay that debt and the banks have the right to pursue you for whatever you owe them.

I do not think they can prusue your children as debts die with you etc maybe you should ensure any inheritance is paid direct to your children

Thanks, do you know if the property has already been repossessed, would that create the shortfall, or is that esthablished once they sell on?

gonehome

Thanks, do you know if the property has already been repossessed,

I am confused!!

I would not know if the property has been reposessesd or not - maybe this is a typo!

Anyway when a bank repossesses a property it is with the intention of recovering any outstanding loan they made to the buyer.

They cannot make a profit.

So if the property had a mortgage of say 400K€ and they sold it for 450K€ then you would receive the 50K€ balance less any reasonble expenses incurred by the bank (sales tax, solicitors fees, admin fees, interest , estate agent fees etc.)

However if they sell the house for 350K€ then you would still owe the bank 50K€ plus reasonable expenses incurred by the bank and they can pursue you for that outstanding debt

HI, It has been repossessed, and there will be a massive shortfall the property prices in the area have dropped massivly, currently circ 300K, they would take it @ 60% of auctionable value, so I will be liable for a huge amount of money which I have no procpect of paying.  I am contimplating bankruptcy here in UK to deal with the shortfall.

Has anyone else had experience of this.

Thanks

I am so sorry to hear about your problems. DON'T go bankrupt in the UK unless you really have to as I don't think that it will solve the situation in Spain. Get some legal advice. It will cost but may well be worth it.

Sorry that I can't be more helpful but others might. Good luck.

As you have returned to the UK  suggest you visit your local CItizans Advice Bureau for FREE advice . They will tell you all the legal options available to you.

Gonehome: Where did you get the auction value from?

I am not getting this or the maths

House price 750K deposit 350K mortgage of 400K and assume you have been paying mortgage for 11 years the balance must be lower than 400K loan - on average I would guess using a 4% interest rate would leave approx 250K (many online mortgae calculators to use e.g. http://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator#result)

Price dropped to circa 350K and yes they may take 60% which is circa 210K so

A circa 40K shortfall plus expenses incurred

Have you got an outstanding balance on the mortgage?

Don't think going bankrupt in Uk would help

mortgage could have been interest only Tadd ...... if it was only interest charges being serviced the debt would not have reduced - further if there have been short or missed payments the mortgage deed allows for pretty swingeing penalty interest rates to be added and capitalised into the loan and these are ongoing monthly and compounding ...... debt can run up very quickly

as everyone is suggesting you need to take expert legal advice and establish the specifics with the bank - it's within your legal rights