legal help

[expat1]

hi i have been recommended to this site through another forum. I am new to forums so please bear with me.

I am ( we are ) currently in a very difficult situation with credit card debts and are worrying ourselves silly mostly about the unknown. If anyone coudl give me any guidance legal advice it can only help.

Brief history

My husband, 3 children and I moved to spain nearly 3 years ago.

Historically in teh UK my husband had 3 credit cards (cc) which we used occasionally but always paid any credit off each month. I was an additional card holder.

Unfortunately the move to spain has not been great financially, even though our children have settled exceptionally well and are now fluent in Spanish.

We have no asstes in the UK and advised the cc cos and banks of our new address in spain.

Our property has fallen in value,like all ppties by around 45%, as such the mortgage and second charge with the builder mean that our secured debts exceed our assets.

We are up to date with mortgage, soc sec and tax in spain.

However our income is insufficient to meet all of our outgoings, my husband has spoken with the cccs in the uk and the inc & exp has been sent to the 3 cc cos explaining we cannot make any payments (3 months now). My mother is helping us out each month, we are short by about 400 euros per month on essentials.

My husband speaks to the cc cos and writes regularly explaining the situation, we live in the cmapo, not a tourist area and we are constantly searching for extra jobs. Understandably the local spanish help their countrymen with work before offering anything to expats.

It is very difficult to get any legal advice from the uk, as soon as we mentionewe live in spain most debt advice agencies can't help. As I mentioned we are worrying ourselves silly and we would just be very grateful if someone could give us any advice around the following questions. Please bear in mind we have looked at all possibilities of increasing income eg renting a room out but with 3 children and the layout of the house this is not possible. We are also not running away from our debts we simply cannot pay anything at the moment.

What will happen if the situation does not improve and we get to 6 months without paying?

Can the cc cos take out a ccj if we dont live in the UK?

if they can will this meant that legal action can be taken against us in spain, bearing in mind our secured liabilities exceed our assets?

my mother is trying to get an equity release on her home in the uk, to help us with a lumps sum, this would produce around £17,000 roughly 35% of the cc debts. Could we offer a full and final settlement with this figure?

Any advice would be greatly appreciated especially around what happens if the debt is sold to a debt collection agency (dca), because the debt is under uk law could a spanish debt collection agancy do anything? once again even if they made us become bankrupt there would be nothing left for thye cc cos or DCA as all of our assets would go the the bank morgage and 2nd charge with the builder.

Any help wouuld be greatly aappreciated as the worry is causing issues with health, stress and depresion, many thanks in anticipation

[Jool]

One of the reasons credit card interest is high is because it is unsecured debt. I know someone who still owes some 20000 of credit card debt, has done for over 2 years, lives in Spain, no assets in UK, gets regular letters from debt collecting agencies and the like but pays either 1 GBP per month or nothing.......there seems to be little the credit card companies can do. He cleared those he could with an offer, one company accepted half the actual sum owing, the other accepted two thirds as he did owe more than this originally, his debt currently stands at 20000. I suggest you write and explain your circumstances, offer them 1GBP up to 10GBP per card per month and ask them to freeze the interest so no more interest accumulates.......It would be better for your mum to pay this each month for you than for her to do an equity release quite honestly and remember credit card debts are the lowest priority of all.

Debt collection services will only take action against assets if there are any assets to realise and you have none.........UK debt collectors will contact you for UK debts....and they do not want to get involved in the queue for spanish Courts. You may get different letters from different debt collectors, this is because the companies sell the debts on they take months if not years to do anything as they know if will not be worth it in the end, if you have nothing what can you do? If you do hear from one just advise them of your circumstances......

Sorry you are having such a tough time at the moment.

Bankruptcy does not exist in Spain as it does in the UK and you have no creditors here so I think it unlikely anyone will petition for that anyway.

[Julie]

www.swarb.co.uk is a good law forum, but it is UK based, have a look through it and see if it could help you, Good luck !

[expat1]

Thank you for your comments, I will take a look at swarb.

Jool you mentioned bankruptcy in spain is not like the uk what is the difference?

When this site was recommended to me someone mentioned D searle, I think from memory, hopefully if I've got the name right they will have a look at this thread

Many thanks again

[Ambre Solaire]

Would be interested in David's response to the inital posting

[gus]

Am I unduly suspicious?

Credit cards all paid up before leaving UK................
Been in Spain for almost 3 years................
Credit Card debt now some £50000............??

[Jool]

My understanding is that your debts stay with you, they are not wiped out so bankruptcy in that sense does not exist.......I think Sid can probably explain it better than me, I think all bankruptcy does is just stop you being hounded and perhaps stop interest racking up but i believe the debt stays with you.

[DavidSearl]

FROM DAVID SEARL

FOR EXPAT1

You request legal advice and guidance in your difficult economic position.

1. Legally, you owe money to the credit card companies. The companies are legally empowered to seek payment of this debt in another EU country. They can bring a lawsuit against you in Spain to recover the money they are owed.

2. And that is the end of the legal picture. Now for the guidance part.

3. Read Jool's long post. It covers just about all the points. Thank you, Jool.

4. The credit card companies will surely not act against you unless they can identify sufficient assets to make it worthwhile. You have no such assets, therefore the companies will not take legal action against you.

5. They will continue to harrass you through the debt collection agencies. Ignore them or continue to write back offering to settle for less than you owe.

6. Here is the most difficult part, for an honest citizen. You say that you are not running away from your debt. Change your attitude. Run away from your debt. That, by the way, is what bankruptcy is. A legal way to run away from debt.

7. Yes, personal bankruptcy exists in Spain, but the court procedures are so complex and the courts so overloaded, and the procedure so new, that I would advise against it.

8. If you are able to exist with some help from your mother, continue to do this and wait for better times. If you have difficulty regarding yourself as someone who has run away from debt, I can understand this, but it may help to know that credit card companies see many, many defaulters. Eventually they will tire.

9. I am sorry not to have a silver bullet for you.

Good luck with it, David Searl