Spanish Negative Equity

What Are My Options If I Have Negative Equity?

The first real action to take if you are suffering from negative equity is to breathe, and then think about your options. While there are many horrifying stories about evictions, repossessions and unsustainable debts; there is a way out. In fact, not taking care of the problem is always the worst option.

Understandably, real estate debt is a sensitive issue, and we pride ourselves in understanding our clients concerns before offering them a plan to claim to settle their debts; and perhaps even keep their properties. It is easy to feel helpless, particularly if your Spanish skills are not great.

But we can help you. After an initial consultation, you can grant Power of Attorney (PoA) to one of our expert lawyers at Spanish Bank Claims. This means they will be able to effectively represent you. Since we are spread across the country, we have experience with different jurisdictions and banks, and will be able to negotiate a fair outcome.

Our lawyers have won landmark cases defending the rights of homeowners in Spain. Their work has been recognised by organisations like Amnesty International. They are not afraid of taking on any bank, big or small. Spanish Bank Claims is licensed to operate in both Spain and the UK, and the team is fully aware of European regulations which can help you avoid future claims on your British assets.

However, they need as much information as possible to assess whether your case is viable. The sooner and more detailed your message is, the sooner they will start working for you.

Can I Just Abandon My Property in Spain and Forget About Debts with Spanish Banks?

Unfortunately, in Spain the legal regime currently does not extinguish your debts, even if you hand your property back to the bank. Many British expats have returned to their home country, thinking that it was sufficient to give up their property to end the nightmare. Some time after, you receive a communication from the bank, notifying you to appear before British or Spanish courts to answer for your debts. They can make claims on all of your assets!

In fact, banks take some time to notify you, whether intentionally or not. What this means, in practice, is that your debt burden increases. You are left with no Spanish property, but you still have to pay interests, the principal and whatever costs acquired by being in arrears. For instance, repossession costs, legal fees for the bank’s lawyers and any other costs associated with contacting you and forcing you to repay. If you are in this situation, we fully understand your desperation: our specialised lawyers have effectively defended the rights of concerned borrowers for decades.

There is one way out: an agreed “dacion en pago”, or what effectively amounts to negotiating a release from both the property and the debt. You need to fulfil very specific conditions, which the bank must agree to. Another option would be to renegotiate the mortgage, under more favourable terms. In any case, to lead these complex discussions, you definitely need a specialist on your side, like those working at Spanish Bank Claims.