A Comprehensive Guide
Learn how foreign banks collect unpaid debts in the UK and what steps you can take to protect your assets. Discover how EU Property Solutions can help you navigate foreign debt collection processes.
Facing the Reality of Foreign Debt Collection
At EU Property Solutions, we frequently encounter clients facing the difficult situation of being pursued by foreign banks for unpaid debts. If you’re in the UK and dealing with this, it’s essential to have the right information before responding to any correspondence, especially when the debt comes from outside the UK. This guide will help you understand how foreign debt collection works and what steps you can take to protect your future.
Understanding Foreign Debt Collection
One of the biggest misconceptions is that handing back the keys or abandoning the property will resolve the issue. Unfortunately, this is rarely the case.
Many properties are in negative equity (meaning the property is worth less than the mortgage), and even if the lender sells the property, you will still be liable for the shortfall. On top of this, legal fees may be added to the debt.
Ignoring the lender or leaving the country can put you in the aggressive sights of debt collection agencies. These agencies can take severe steps to recover the owed debt, and the longer you wait, the harder it may become to resolve.
Who Will Be Collecting Your Debt?
If you’ve been avoiding your lender or have left the country, it’s only a matter of time before they turn to a third-party debt collector. The process can be slow, but it’s crucial that you understand the potential routes your lender might take.
Here’s a breakdown of how foreign lenders typically pursue debt collection:
1. European Enforcement Order (EEO)
The European Enforcement Order is part of EU law designed to facilitate debt collection across EU member states. Despite Brexit, this law still applies to the UK, allowing lenders from countries like Spain or Cyprus to pursue debts within the UK.
With this order, a foreign lender can request that UK courts recognise the debt and apply for enforcement. This can lead to a County Court Judgment (CCJ) or Statutory Demand being issued against you.
2. UK Solicitors
In some cases, foreign lenders may instruct UK-based solicitors to handle the debt collection process. Unlike foreign firms, UK solicitors are well-versed in local legal proceedings and are known to be more aggressive in their approach.
They may take the following actions:
Place charges on your UK property
Pursue a County Court Judgment (CCJ)
Issue a Statutory Demand (formal demand for payment)
Begin bankruptcy proceedings if the debt is not resolved
3. Vulture Funds and Loan Sales
Another route commonly taken by European lenders is selling the debt to a vulture fund. These funds purchase bad debt at a discount and then aggressively pursue it in full. The sale of loans to vulture funds is common for lenders dealing with bad loans, as it allows them to offload the problem quickly.
Popular vulture funds include companies like Axactor, Pepper Finance, LCS Debt Recovery, and E&G Solicitors, all of which are notorious for their vigorous methods of recovery. These companies can change the terms of your loan, adding extra fees, interest, and legal charges, making it harder to settle your debt.
Vulture funds are also harder to negotiate with because they are motivated to recover as much of the original loan amount as possible, often leading to less favourable settlements for borrowers. However, with the correct representation, these funds can be pragmatic and commercial.
Why You Should Take Action Now
Dealing with foreign debt collection can feel overwhelming, but ignoring the problem will only make things worse. Left unchecked, your situation can escalate, leading to legal proceedings, court judgments, and significant financial and emotional stress.
Taking action early can help you avoid rising costs and aggressive tactics, and it can also give you the best chance of reaching a manageable settlement. EU Property Solutions has helped many clients like you, saving over £13 million and protecting assets in the UK.
How We Can Help You
At EU Property Solutions, we have over a decade of experience helping foreign property owners with debt collection. Here’s how we can assist you:
Expert Advice: We help you understand the debt collection process and your rights.
Debt Negotiation: Our team can negotiate with creditors and vulture funds on your behalf to reduce your debt.
Asset Protection: We work to ensure your UK assets, such as your home, remain protected from foreign creditors.
Legal Assistance: Our team of bilingual experts can communicate and translate documents, taking the stress out of the process.
Get Started Today
If you’ve received communication from a foreign lender or debt collection agency, don’t delay in seeking help. The sooner you take action, the better chance you have of resolving the matter on your terms.
Call us today on 03301241230 or email us at [email protected] to book your free initial consultation.
Conclusion: Protect Your Future from Foreign Debt Collection
Dealing with foreign debt can be challenging, but EU Property Solutions is here to help you navigate the complexities. Whether you’re facing aggressive debt collectors, struggling with a negative equity property, or dealing with vulture funds, we have the expertise to protect your assets and negotiate a favourable settlement.
Contact us today to take the first step toward resolving your foreign property debt.
Check out our website to read more on being pursued in the UK.
