Being chased by Sabadell in the UK

Have received a pretty threatening letter from a UK law firm acting for Sabadell, basically giving us 2 weeks to repay 85k euros shortfall on a mortgaged property that we handed the keys back to in 2008.

We've basically heard nothing for 10 years.

Letter suggests putting charge on our UK property, reporting us to credit agencies and seeking a bankruptcy order.

The letter feels quite speculative - it has a lot of generic language that I assume has been sent out to lots of people.

I have been reading about EEOs which is quite concerning.

Has anybody else been through this and what was the outcome?

cheers

Have you checked this law firm? Are they registered with law society?

What's an EEO?

They can certainly do all they say. The bank may need a Spanish court judgement first and then ask the UK courts to enforce it.

Who do you think should pay the 85k euros you borrowed?

If you are living in rented property in the UK then it's just a simple case of declaring Bankruptcy protection ....if you own or part own any property in the UK then you should seek immediate legal help .

The days of doing a runner and getting away with it are over. The world is a much smaller place now. I do not see how independent legal advice will absolve a bad debtor. A lot of this is head in the sand, borrow money, renege on paying it back and just walk away and keep all your assets. Strange why some people perceive banks as a money tree just printing euro’s in the back office. The only money banks have is customers and shareholders and it is them that bad debtors are thieving from when they have the resources to pay their debts.

Have received a pretty threatening letter from a UK law firm acting for Sabadell, basically giving us 2 weeks to repay 85k euros shortfall on a mortgaged property that we handed the keys back to in 2008. 

Suppose you have checked with Sabadell bank over these past 11 years to see if your property was sold? then find out out how much for, but then you should have known all this.

We've basically heard nothing for 10 years.

Because you haven't heard from the bank means nothing, unless of course you check and find out that the bank only has a certain amount of time to ask you for back pay,  you might have changed house a few times to become out of the system, hence the long contact time, the bank might be just putting the frighteners on you in the hope you cough up.

Letter suggests putting charge on our UK property, reporting us to credit agencies and seeking a bankruptcy order.

If you own your house probably can put a charge on it, if not then no chance, might be they haven't checked to far at all to see if you do in fact own you're / a house, normal letter from a law firm telling you all this, if you reply you are admitting the debt, if you don't reply could be worse.

The letter feels quite speculative - it has a lot of generic language that I assume has been sent out to lots of people.

Consider how many folk did this to banks, now Judgment Day is looming.

I have been reading about EEOs which is quite concerning.

Haven't looked this up so don't know.

Has anybody else been through this and what was the outcome?

No

Lots of if's, but's, and maybe's here. A lot of people did what you have done thinking that was the end of it, probably not.

PS. If you google 'Clear Debt' some of it might help you, but you will also see why the bank has done this.

Thinking out loud here....if the OP got a bank loan for a property, then realized they couldn't afford it, then have it back....what are the banks chasing? They have the asset back.

I doubt it would be difficult for a UK law firm to find out through land registry if someone owns a property in the UK and if there is a mortgage on it, also some idea of its market value. If after 10 years the OP has not made any legal asset protection procedures then following a warning letter to pay the bank they may well go for a bankruptcy order (no messing).

Not referring to the OP, but in general, many thought they could just throw the keys in and jump on Easyjet, go back home and live happy ever after in their UK home, head in the sand and do nothing, which was probably true 10 years ago when the banks were in chaos, but the Spanish banks are now getting organised and will have their pound of flesh one way or another if the debtor has assets, why not?

Europa, did you just hand back the keys or did you actually sign a 'dacion en pago' with the bank in a public notary?

If you did a "dación en pago" then there is nothing to chase, it must be a mistake, you should have a notarized document that declares you debt free of the mortgage (signed by the bank, you and the notary) ....if you just said "keep the property" it would have eventually gone up for auction and then they will chase the difference up to the total of the debt with interest etc.  If is the latter I would get legal advice, if you have assets in the UK. Not sure post Brexit how EEO's would work though... I can not imagine it is a quick process...

( EEO  -- European Enforcement Order -  debts in other EU countries. )

Hi Ian 

Anyone who had arranged a 'dacion en pago' during surrender or repossession of a property would certainly know about it as it meant and involved a settlement with the bank. In some rare cases it could have been included in the mortgage agreement, but usually only on main residence.

European Enforcement Order is only a convenient fast track method to enforce legal proceedings between member states and will remain enforceable in the UK for as long as who knows? After that normal procedures will come into force. The UK is not on Mars as many UK Spanish mortgage defaulters imagine, it is just a border with a bit of water.

If UK lawyers start the no win no fee ambulance chasing for Spanish banks God help the defaulters and their cosy little homes.

Spanish Property Insight

Good read from the website above, although not sure about it if nothing has been done by the buyer for many years, as it does sound like you have to agree this step from the very onset of handing back the keys.

Personally I can imagine plenty of UK lawyers jumping onto this, chasing bad debts In Spain, no win no fee business, costs them a bit of paper, couple of stamps, junior clerk doing the homework, not much to lose either way, plenty to gain considering the amount of people that must have done this, even if it works on just a few debtors.

A couple of articles that might be of relevance here.... 

The first (dated 2013) providing some background as to how abusive mortgage collar clauses came about and why there was the need to stamp them out, and the second (November 2018) an update relating to a new mortgage law which has relevance to floor clauses ( collar clauses) and repossession procedures....

https://www.spanishpropertyinsight.com/legal/mortgage-collar-clauses-revisited-clausulas-suelo/?utm_medium=email&utm_campaign=SPI+Bulletin%3A+Industry+insider+calls+...&utm_source=YMLP+mailing&utm_term=%2B+Mortgage+Collar+Clauses+Revi...

https://www.spanishpropertyinsight.com/2018/11/21/new-mortgage-law-to-be-passed/?utm_source=Spanish+Property+Insight+News+Bulletin&utm_campaign=3ca5ca831a-SPI-NB-160818_COPY_01&utm_medium=email&utm_term=0_5c1bbc37e8-3ca5ca831a-137954973

The days of doing a runner and getting away with it are over. The world is a much smaller place now. I do not see how independent legal advice will absolve a bad debtor. A lot of this is head in the sand, borrow money, renege on paying it back and just walk away and keep all your assets. Strange why some people perceive banks as a money tree just printing euro’s in the back office. The only money banks have is customers and shareholders and it is them that bad debtors are thieving from when they have the resources to pay their debts.

Angeleyes, thats wrong. The banks DO create money from nothing. For every £1 that gets put in a bank account, the banks can create (from thin air, on a computer) £9, in the form of mortgages, loans etc.

Fazarelli for the benefit of everyone can you fully explain how this works?

It's called fractional reserve lending. 

Fractional reserve banking is a banking system in which banks only hold a fraction of the money their customers deposit as reserves. This allows them to make loans to people who want to borrow money to (e.g. to buy a house, a new car ). This process essentially creates money and thus increases money supply. It is important to note however, that even though new money is created, the overall wealth in the economy remains unchanged. With current low interest rates the return is minimal and £1 to £9 is fantasy. All money and funds held and controlled by a bank belongs to either its customers or shareholders.

The last part is incorrect.

You are correct, maybe a second hand car or a caravan.

You can just imagine the scenario in the bank for the customers.

Hello Mr & Mrs Garcia I am really sorry but we cannot give you back any of your savings money. We operate the fractional reserve banking system. We loaned your money to Burt & Betty Brit from Scunthorpe to buy their Spanish holiday home. Sadly they did a runner back to their nice semi in Scunthorpe and never paid us a penny. But not to worry Burt & Betty have just had a new conservatory built on their semi with all nice new cane furniture. They told us to stick the mortgage debt where the sun doesn’t shine. They are off on holiday to Las Vegas next week.

Just Google it. You'll see what FRL is.

Fractional reserve banking is a banking system in which banks only hold a fraction of the money their customers deposit as reserves. This allows them to make loans to people who want to borrow money to (e.g. to buy a house, a new car ). This process essentially creates money and thus increases money supply. It is important to note however, that even though new money is created, the overall wealth in the economy remains unchanged. With current low interest rates the return is minimal and £1 to £9 is fantasy. All money and funds held and controlled by a bank belongs to either its customers or shareholders.

Angeleyes, that last part is contradictory and incorrect. The first part says that the banking system only holds a fraction of the money their customers deposit, which is true.

If i buy a house for 10k in 1990, using 1k deposit. Where does the 9k come from? It can't come from the banks reserves because their isn't enough to fund 1000's of other buyers. Then, I sell the property in 2010 for 100k, where does that extra 91k come from? The buyer of the property is only putting 9.1k in, there's 80k~ to find from somewhere.

Also, probably 90% of all money is tied up in property (houses, offices, land, skyscrapers, factories, hotels etc) plus things like cars, bikes, boats, plant and equipment. This money doesn't actually exist. In fact 97% of the world's money only exits on a computer screen.