The reason you received a letter
A letter from a Spanish bank will typically arrive if you have missed mortgage payments or walked away from your foreign property without taking proper steps to resolve any issues.
The letter will initially be a demand for the debt, and in many cases it is for a shortfall amount as the bank has reprocessed the property and sold it. One of the biggest issues with people running away from properties is that many lenders sell it under market value to get a quick return. Borrowers will also be liable for any legal fees as well as any property related taxes such as IBI tax.
What happens after you receive this letter
Typically, the first letter will land at your Spanish address, and after a short period of time, you will be hounded by calls & emails. If that fails, the Spanish bank will become more aggressive and cross borders to your home country to collect.
They commonly appoint a solicitor or debt collector in your country.
At this point, getting the right advice is crucial because the debt collector is now in your home country and knows the system much better than the Spanish bank. In many cases, we see aggressive tactics such as second charges being placed on homes, loan terms being changed to claim more money back from you, and CCJs being issued.
Yes, Spanish banks can chase debt in the UK through European Enforcement Orders or court judgments, allowing them to obtain a County Court Judgment, enforce against UK assets, and even force the sale of your property.
If you default on a Spanish mortgage, the lender can repossess and auction the property. If the sale doesn’t cover the debt, they can pursue the shortfall through debt collection agencies, potentially affecting your credit rating and leading to legal action in Spain or your home country.
If you have debt in Spain, creditors can pursue legal action, attempt out-of-court settlements, obtain a court judgment, and even seize your assets, such as bank accounts or property, making it essential to seek legal advice.
