Mortgage Problems in Spain

Many people who previously took out a mortgage with a Spanish bank to purchase a property in Spain are now experiencing problems repaying or servicing the debt. This has left these purchasers in direct conflict with their Spanish bank and facing the prospect of being legally pursued for the outstanding amounts.

 At Judicare, we are a specialist and leading firm of UK Solicitors in this area of law. We appreciate that being contacted by a Spanish bank, or solicitors acting for a Spanish bank, can cause a significant amount of anxiety and stress. Our team can guarantee constructive and sensitive legal help, to minimise stress and resolve matters quickly.

Get in touch with our specialist solicitors today

Whatever your circumstances, we are here to provide practical guidance, tailored to your requirements.

If you are experiencing mortgage issues with a Spanish bank, you can contact us by calling 01438 840258 or filling in our short enquiry form on this page. We offer a no obligation free consultation.

Why choose Judicare?

When looking for a firm to represent your interests, and to negotiate with a Spanish Bank on your behalf, it is important that you look to engage a specialist, experienced and regulated firm of solicitors. Here at Judicare we have decades of combined experience in dealing with Banks in foreign jurisdictions. As one of the UK’s leading firms of Solicitors in this area, we have been able to negotiate over £40 million of foreign bank debt being successfully written off for our clients.

If you have received a legal notice from your Spanish Bank or a UK firm of solicitors, have concerns about a Spanish property mortgage debt, or would like more information on our fixed fee approach, a member of our team will be happy to assist you.

Getting in touch will allow us to understand your individual circumstances and discuss your concerns and objectives. Once we have a clear understanding of your situation, we can decide upon the correct strategy, working towards a solution which is right for you.

Below are just some of the reasons why our clients instruct us:

  • Our legal team has decades of combined experience of handling mortgage problems with Spanish banks.
  • We are regulated by the Solicitors Regulation Authority (SRA), and as such, we carry professional Indemnity Insurance giving you vital protections and redress in the unlikely scenario something goes wrong.
  • Using one of the unregulated "Advisory" firms providing foreign property debt solutions across the EU can be risky, as there are no safeguards or any regulatory redress for clients if something goes wrong.
  • Our successful negotiations have resulted in over £40m of foreign debt being written off for clients
  • We’re members of the Association of International Property Professionals and devote ourselves to promoting principles of good practice within the international property industry.

You can call Judicare on 01438 840258 or email Alternatively, we can also arrange a free no obligation teleconference via Zoom/Skype.

Below we address some of the most frequently asked questions from clients to these issues in Spain.


Useful Spanish terms


Lawyer or solicitor

Agente de propiedad inmobiliario

Estate Agent

Apartamento / piso


Asesor fiscal

Tax consultant


Town Hall



Clausula suelo

Floor Clause

Clausula techo

Ceiling Clause

Comunidad de Propietarios

Community of owners / Residents Association

Compra / compraventa

Purchase / Buying and selling

Dación en Pago

Handing the keys back to the bank






Embargo / Charge


Title Deeds







IBI (Impuesto Sobre Bienes Inmuebles)

Council Tax




Estate Agency



IVA (Impuesto Valor Añadido)

VAT (Value Added Tax)















NIE (Numero de Identificación de Extranjeros)

Foreigner’s Identification Number

Nota Simple

Land Registry Search


Notary Public

Permiso de obra

Planning permission


Court case


Power of Attorney

Póliza de seguros

Insurance policy





Registro de propiedad

Land Registry










Branch (Bank)



Valor Catastral

Official value of the property

Mortgage Problems in Spain

What are my options for dealing with a Spanish mortgage debt?

You may have various options available to you, but it is vital that you understand what those options are before starting any formal procedures with your Spanish Bank.

Banks in Spain often think in a different way and therefore it is important that you understand what their priorities are before speaking to them.

For more information

Can a Bank in Spain pursue my assets in the UK?

The short answer is yes. Many people mistakenly- have been led to believe that because the property is in Spain, the Bank is in Spain and the mortgage debt is in Spain, that the Spanish Bank cannot come after them in the UK for the debt. This is certainly not the case.

In the majority of cases, the Bank in Spain will have a first charge on the property and are likely to attack that in the first instance. If they can sell the property through an auction process to cover the amount outstanding, then that would bring the matter to an end. However, if the value of the property is less than the amount outstanding then the Bank has a right to pursue a borrower for any shortfall.

For more information -

I have received a legal letter from my Spanish Bank or a UK firm of Solicitors, a Company called Axactor?

We are seeing more and more clients being contacted in relation to an outstanding debt which exists as a result of a previous Spanish property purchase. The clients are receiving legal demands directly from their Bank in Spain directly, via a UK firm of Solicitors acting for the Bank in Spain, or via a third-party debt collection agency or Vulture Fund acting for the foreign Bank.

Typically, these clients had previously purchased a property in Spain and due to their changing personal circumstances, took the decision (and the chance) to walk away from their foreign property, believing their foreign lender would simply take back the property and not pursue them for any monies thereafter.

Read more here - I have received a letter from Axactor regarding a mortgage debt in Spain (

What is a Vulture Fund?

A so-called Vulture Fund is an investment fund that will seek out and purchase securities in distressed investments. The objective thereafter for the Fund is to 'swoop in' and pick up under-priced assets at a fraction of the debt, with a view to collecting from debtors an increased percentage of the bad debts. This is particularly true within the European Banking sector in relation to non-performing property mortgages/ loans.

For more Information -

These funds then aggressively pursue the mortgage defaulters seeking to recover the amounts.  Companies like Cerberus, Blackstone and Axactor to name a few of the entities chasing clients in the UK.

What is a Dación en pago?

You may have heard the term Dación en Pago. This essentially is a mechanism that allows you hand the property back to the Bank.

It has to be done by agreement with the Spanish Bank. The belief that you can simply hand back your keys is certainly not true and has in fact placed people in extremely severe positions when the Bank in Spain finally locate a borrower.

The vast majority of the Spanish Banks have signed up to a Code of Conduct in which they have agreed to always agree to a Dación en Pago if certain criteria are met by the owners of the property or the borrowers who took out the mortgage.

This system was brought in by the Spanish Government as a way of reducing the cost of repossession and providing a solution for the people who had taken out mortgages and who could no longer afford them.

If you comply with the requirements, then you can hand the property back to the Bank as full and final settlement for the mortgage debt owed.

What are the Dación en pago requirements?

In order to qualify for an automatic Dación en Pago it is necessary to comply with all the following requirements:

A restructure of the loan to make it more affordable must have been attempted.

The value of the property must be less than €200,000 in large cities and less than €120,000 in cities with less than 100,000 inhabitants.

The property must be the only home that the borrower owns anywhere, not just in Spain.

All family members of the borrower must be unemployed.

The mortgage was taken out to buy the property and is not subject to other guarantees registered on it.

The mortgage payments must make up more than 60% of the net family income

There are no other assets with which to satisfy the debt

Dación en pago by negotiation

Even if you do not comply with all the requirements for a Dación en Pago, it may still be an option for you. The individual Bank can, if they wish to, agree to take the property back from you in settlement of the amount outstanding to them under the mortgage

The requirements above only set out when a Spanish Bank, that has signed up to a Voluntary Code of Conduct, has to accept a Dación en Pago. Obviously, the more requirements you meet and the greater the equity on the property the more chance that we can negotiate a Dación en Pago with your Bank in Spain.

In some cases, we have even managed to negotiate with the Bank that they will take over the cost of running the property until it is sold and then give you back any difference between the amount that you owe them, and the price realised upon a sale.

Can I renegotiate the existing terms on my Spanish mortgage?

If you wish to retain the property and simply want to negotiate over the terms of the mortgage, then this may be possible. Any negotiation and the final scope of the changes in your terms will be at the discretion of the Bank. Fundamentally however, the Banks in Spain would much rather re-negotiate with you over the terms of the mortgage and get to a stage where you are paying regularly rather than be in a situation where they have to re-possess.

The Banks remain probably the largest estate agents in Spain due to the large numbers of borrowers who have defaulted on their obligations in the past decades.

Some of the terms that be renegotiated include:

Periods of time in which your mortgage is interest only

Extending the length of the mortgage to reduce down the monthly payments

Reducing down interest rates

Writing off part of the amount outstanding to the bank

Naturally, factors such as the amount of arrears on the mortgage payments or the longer you have been ignoring the Bank can result in the Bank being less co-operative. It is therefore important to deal with an experienced firm of solicitors with specialist knowledge of these issues to negotiate on your behalf.