Spanish Mortgage Shortfall and UK Bankruptcy

Good luck for the future gonehome. It can happen to all of us.

Good luck, gonehome, I'm sure it was stressful but worth it. Can you confirm to those who told you that "the debt will remain in Spain, etc"....that in fact you had the slate wiped clean in Spain also?

Hi all. I'm not going to lie. It has been very stressful. When I first went to court to declare myself bankrupt, due to size and location of the debt the judge adjourned the hearing as they thought I may be a bankruptcy tourist. They wanted me to prove I had the right to open proceedings within the Uk. I had to provide a lot of proof that the uk was my centre of main interests. I did , and upon returning to court the judge made the order in a matter of minutes. I have since had my interview with the official receiver, over the telephone. My creditors in spain have been written to, told that I am insolvent and that any contact must be with them and that the debt has been obsolved and that it is illegal for them to contact me. I feel a great weight has been lifted and within a year I will be discharged and free to get on with my life. The judge and the insolvency service have been both professional and sympathetic to my situation. For all those out there who say you shouldn't be able to just walk away, I don't promote what has happened, in my case and that of many others, it was inevitable. All I would say to those who Are unlucky enough to find themselves in the same position as me is, everything can be dealt with and once done. You can start a new life debt free. It's not easy, but the best decision I have ever made. If anyone wants to discuss I am more than happy to. Thank you all. 

Thanks gonehome. Pleased your stress levels are now reduced and you can get on with your life.

It will be interesting to learn if the Spanish creditors observe the courts directions. The debt in Spain cannot be dissolved by a UK bankrupcy court. These courts do not have jurisdiction in Spain. The debt will be recorded against you however by the Bank of Spain indefinitely along with hundreds of thousands of others. Until that is Spain changes their insolvency laws.

Thanks. I have no intention of returning to spain to reside so no problem there. I wanted to draw a line in the uk and under eu regulation the opening of insolvency proceedings must be recognised in a member state, ie spain. If I were to return to spain and buy a house , yes the could go after it. If I built assets or inherit after my discharge, 11 months now, they will be secure and the spanish bank can not seek any money from them. For me this was always the aim. To safe guard my families future in the UK. Done. Thanks again

It's very interesting hearing about this as there must be thousands, if not more, in similar situations, who will take heart from your experience. Out of curiosity, what was the reaction of the Spanish lender when they were "given the news"? lol.

It's understandable that if you were to return to Spain and buy a house within the next 11 months, before you are discharged, that they would go for you as you're not supposed to have any money! But paradoxically, once discharged, you are a better credit risk than before as they know you have no baggage.

One thing is for sure, if it was a Spanish builder who went bust with your deposit while at the same time continuing to live in a mansion in Marbella in his wife's name, etc, you wouldn't get any sympathy from the Spanish system. (or British).

 "The debt in Spain cannot be dissolved by a UK bankrupcy court. These courts do not have jurisdiction in Spain."

Mickey,I asked you before in June, "What makes you say such things?" Can you provide any sort of link? 

The debt is extinguished. It is the law of the EU. The Banks of Spain can keep all the records it likes, but the debt no longer exists. If any Spanish creditors do not observe the injunction (that it is illegal to chase gonehome) then they are in contempt of a UK court and gonehome should ask the judge to issue a European Arrest Warrant and get them locked up. 

This link clarfies the law.

http://ec.europa.eu/civiljustice/bankruptcy/bankruptcy_ec_en.htm

However in Spanish national law a debt is never written off and remains permanently on file. It will have no practical effect in this case and cannot be pursued because of the bankrupcy order in UK. However if 'gonehome' ever returns to Spain in the future the debt will re-appear and could be applied to any assets he may bring to Spain.

Moves have recently been made to change this law in Spain but the ruling party blocked it.

The main thing for me to come out of this is, no matter how bad things get, there is always a solution. People in my situation, yes , arguable brought it on themselves, however, are not to blame ultimately. None of us have crystal balls and have lost a lot of money too, it's not all the banks money!! For me, the fact I can draw a line under it and move on with my life is the main thing. Thanks