A foreign mortgage may have followed you for years and will be in the back of your mind. But what happens when the bank decides to recover their money?
As and when your debt is chased, any communication received from the various financial institutions, be it from a bank in Spain or Cyprus, or representatives in the UK, comes as a rude awakening.
For anyone who owes a large amount, receiving a demand for its full payment out of the blue is a terrible shock.
You may have hoped it had gone away, however, this is not the case. Debt does not go away.
A foreign debt will be chased by one of the following five methods:
In the main Banks or debt collection agencies, start off on a gentle basis demanding the money with some threats. But they mainly looking to resolve the matter. If they do not receive the engagement or recompense they require, they will pass that to solicitors in either country where the debt is chased.
Vulture Funds and solicitors in the UK are completely different and usually take a ‘route one’ approach. Demanding money within a very short time, and serious threats of litigation.
Once litigation begins, and solicitors essentially have ‘carriage of the case’ then there is a different agenda to the case. It will likely be revolving around the legal firm’s fees. Litigation is very, very expensive, with the costs being crazy. If a case goes to the concluding stages, then 50%+ can be added to the debt in terms of costs. This is to secure the Judgment and used to enforce it.
To enforce a debt the Banks and their advisors will either obtain a Judgment, in either Spain or Cyprus. They then transfer the litigation via the EU Regulation No 655/2014. Enabling them to chase debts in the UK Courts.
As and when the financial institution secures a Judgment, then it is likely that they will proceed to what is known as an Order Charging Land, which secures their foreign debt on your UK home. This Charge will at some point need to be satisfied, be it by sale or re-mortgage.
Typically, Vulture Funds will push to enforce this security and realise same, releasing the funds they need to settle the debt owing.
This could mean the repossession and sale of your UK home to ensure they realise these funds. If it gets to this stage, as we said above, the costs could be astronomical, and consequently the amount of the debt will balloon.
EU Property Solutions recently settled a case where the client believed they may owe £80,000 to their foreign financial institution. With interest added over nine years, as well as other costs accruing, this debt had risen to £107,000.
The client chose to ignore the initial solicitor chasing letters in the UK, so a Judgment was secured, which with costs, had then risen to £142,000.
EU Property Solutions negotiated a settlement, including costs, for £40,000. This is typically more than what we normally would have had to pay in this instance, but the Bank and their advisors were reticent to offer any further discount, due to the lack of cooperation from the client. The upside in terms of this case is that the family home in the UK was saved.
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We are a UK based firm with legal teams in Spain and Cyprus who understand the market and Bank practices as they stand. We remove the language barrier and utilise law, Bank lending flaws and current client circumstances to negotiate the best feasible outcome for all our clients.
EU Property Solutions was formed following the success of our associate firm Bell & Company. An FCA registered firm of Debt Strategists, Bell & Company assist individuals in difficulty in the UK and Republic of Ireland with Personal and Business-related debt issues.
We have an excellent track record of success. Our success stories and testimonials come straight from our clients & highlight the high quality of our works and outcomes. We have individuals willing to speak to prospective clients on the telephone to offer their story and experience.
Our obligation is always to our client and that is where our strength lies. Debt is highly stressful and emotional. We deal with debt day in day out and employing an intermediary removes emotion from the situation allowing clear strategy to be implemented to get the best outcome for our clients. Understanding a firm of professionals is acting on your behalf can remove stress and focus the mind to a positive end goal.