# Portugal property arrears - can they get my Irish home?



## lipton (4 Mar 2013)

I'm in arrears with a property in Portugal and cannot keep repayments. I told them to take the keys back. They said no and will pursue me for the money in Ireland by getting a Judgement. Can they get a Judgement on my property (morgaged) here in Ireland ? What can they do to me here ? Any advice on how I should proceed, Thanks.


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## Bronte (5 Mar 2013)

Is their equity in your Irish home.  Are you in paid employment?  If yes to both they could seek to put a Judgement order on your home.  Or they can try and seek an instalment order against your income.


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## ASK12 (5 Mar 2013)

Hi, have you tried to restructure the mortgage in Portugal ?


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## lipton (5 Mar 2013)

I was on Interest only but has now come to an end. They want us to now start repaying the principal. I have mentioned about spreading payments over 25yrs. There needs to be further discussion and consultation although I get the impression they don't want to negotiate a longer payment schedule. To be honest, I found it hard enough paying interest only on Portugal apartment and making full repayments on house in Ireland. I can't afford to pay any kind of restructured morgage in Portugal. I wish to focus on keeping payments on house in Ireland. I told them I just wanted to hand back the keys. They said they would chase my assets in Ireland for the money there owed. I just want to know how they can come after my home in Ireland if it's morgaged to a different bank?


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## lipton (5 Mar 2013)

Both myself and my husband are in paid employment. I'm working part time and he's a taxi driver but we have no available income. There is equity in our home but how can they come near our home in Ireland when when its morgaged with an Irish bank ?


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## Odea (6 Mar 2013)

I think that they might be able to register a second debt against your property. Whether they can then force a sale I am not sure. If this were to happen your mortgage provider would get paid their mortgage and then they pick up what's left over. Are both properties in same names? Do you have children?
Is there any point in trying to sell your property in Portugal at this stage?


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## Bronte (6 Mar 2013)

lipton said:


> Both myself and my husband are in paid employment. I'm working part time and he's a taxi driver but we have no available income. There is equity in our home but how can they come near our home in Ireland when when its morgaged with an Irish bank ?


 
How do you know you've no available income? A bank might see it differently. Though I must say from a banks point of view a taxi driver's income would be hard to pin down.

Of course they can go after your Irish home. They just apply to put a Judgement mortgage on it. And after that they could apply for a well charging order to get the house sold. In that circumstance they will be paid after your Irish mortage company.

Do you not think it would be better to come to some kind of arrangement wtih the Portuguese bank.

Please post up figures if you want more concrete advice.  For example if you really do not have any excess income and if the equity is very low - these would be important things to tell us.


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## ASK12 (6 Mar 2013)

Hi Lipton, do you currently rent the property in Portugal to at least try offset some of the cost of the mortgage if you cannot earn all the income to cover the mortgage. I have a property on the algarve and I part-fund the mortgage with a portuguese bank through short term holidaymaker rentals. It would also help in dealing with the bank to show you are making the effort to provide some repayments. I approached my bank in portugal last year and they were not helpful when I asked for another Interest only period as they would have applied a much higher interest rate on me. I would definitely seek advice locally in Portugal on your predicament.


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## Importer (6 Mar 2013)

Quite simply they will get a judgment against you and seek to have a judgment mortgage attached to your Irish property. 

The judgment mortgage will rank 2nd behind the Irish mortgage.In the event that your home is sold and there is some equity remaining after the 1st mortgage has been discharged, then the Portuguese bank will be paid next.


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## Time (6 Mar 2013)

It is highly unlikely the bank would get a well charging order if there is no prospect of them getting anything after the first mortgage is paid off. The courts will not grant an order where the proceeds will not discharge both debts.


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## lipton (7 Mar 2013)

Is this actually happening ? Are they getting Judgements against attached to Irish properties. We gave no security ! We are never going to sell our home in Ireland so it's really irrelevant. It will be passed onto our children when we die. In this case, what is the worst they can do ? Destroy our credit rating ? Put a judgement against our earnings ?


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## lipton (7 Mar 2013)

Where would they get the order ? Why are they so insistent that they can a Judgement against us that they can apply to us in Ireland ?


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## lipton (7 Mar 2013)

The figures don't matter as I haven't the money to pay. Forget about any restructured payments etc. The point is I'm at the end of the road. We're all out of options. What I'm asking is how bad the end result is going to be. My mortgage in Ireland will not be repaid for another 20 years. Will the the secondary judgement still be active in 20 years time ? I'm not looking for advice on figures. I'm wondering what the end result will be. Have you experience or know people who have had a judgement put on their property by an overseas bank ?


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## Time (7 Mar 2013)

> Will the the secondary judgement still be active in 20 years time ?


No. 12 years is the most they can get from it.


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## Importer (7 Mar 2013)

The world is a much smaller place than it used to be. It's not difficult for a foreign bank to get a foreign judgment registered against your home in Ireland. It really is a trade off for them of legal cost Vs amount of money owing Vs amount of equity in your home.

In short they can do it and will do it if the amounts in question are large and if they believe that they have a good chance of recovering the debt withing the twelve year window.

They have to make a call on it. Two different banks might make two different calls on it.

You are right that it is more unlikely that they will take this action but it is possible and they may or may not seek to do it. Nobody can tell you categorically that they they will or wont take this action.


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## Bronte (8 Mar 2013)

lipton said:


> Where would they get the order ? Why are they so insistent that they can a Judgement against us that they can apply to us in Ireland ?


 
They can apply to an Irish court I assume.  But you've now told us you've 20 years left on your mortgage so I'm guessing there is very little equity (figures from you would be helpful) and they will not waste time on the legal fees of going for a judgment.

It would be in your best interest to prove to them that there is no 'value' in your Irish property and that you are on a low income.  It might make them go away.


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## Brendan Burgess (8 Mar 2013)

lipton said:


> TMy mortgage in Ireland will not be repaid for another 20 years.



Hang on a second here. 

If you are paying off capital on your Irish home, then you must have some cash available to pay off capital. Have you asked your Irish lender to reschedule so that you can pay some capital off your mortgage in Portugal? 

Have you considered selling your Irish home to repay your Portuguese debts? I am not recommending this, but you must consider all options. 

You should provide the full figures to get proper advice.

Value of both properties. 
Amount of each mortgage.
Interest rates. 
Income 
etc.


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## lipton (8 Mar 2013)

We have 300,000 remaining on Primary residence in Ireland. We are at the pin of our collar trying to make these repayments_. We have 140,000 remaining on our mortgage in Portugal. Wewere on interest only for the past 5 years. They now want principal but we don't have the money to pay anything. The rental income comes nowhere near meeting the principal repayments needed. The rental income didn't even cover the interest only payments on the property in Portugal. We are making full repayments on property in Ireland but just about. We couldn't even really mange the interest only in portugal. We cut or medical insurance policy just _to cover the shortfall in Portugal that when the rental income didn't cover the interest only payment. We have nothing to give or remorgage on our own home. We might if very very lucky get 400,000- 500,000 on our own home but we do not want to sell. What would we the big deal if they did get a judgement against us in Ireland ? Could they get a judgement on our earnings / Any advicewould be greatly appreciated ?


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## Billo (8 Mar 2013)

Do you need to live in a home worth 400 - 500k ?
If I were you I would downsize and pay off at least some of my debts.


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## lipton (8 Mar 2013)

Realistically with the market as it is we might get 300,000 or 350,000. Our mortgage is 300k. Debt in portugal is 140,000. So we're still left with debt of 90,000 minus a roof over head for us and our kids. I'd love to believe its worth 400-500k but objectively we're never going to get that for it.


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## Dermot (8 Mar 2013)

What is the property in Portugal worth realistically?


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## Dermot (8 Mar 2013)

Lipton.  Just a number of points. You have been asked for more detailed information and it is not here.  You have given a variety of valuations on your house of 300k at the lowest and 500k at the highest. Is your home on Interest only or P & I, how many years left on mortgage, how old is the mortgage, what is the interest rate, is it a tracker or svr rate mortgage. What is the household income, family, your ages and family ages. Have you any other debts.
Portguese property.  Current value, potential rental income if managed properly.

Above may seem to be looking for a lot of information but if all of the above questions are not answered as well as other pertinent information posters cannot get a true picture and therefore will be unable give the proper advice


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## lipton (10 Mar 2013)

I don't really know what its worth in this climate or what I'd actually get for it in this climate hence the fluctuations. I have no yard stick to judge by similar house in the area. We owe 420,000 between two banks. 300k in Ireland and 140,000 in Portugal. I earn about 35k as taxi driver and my wife 17,000 per part time. We know ourselves we cannot pay both mortgages. We have two kids and our quality of life is suffering badly. I was hoping to get pratical advice as regards should we stop paying portugal mortgage and allow judgement proceedings go ahead and try and defend it by showing we cannot pay anything ? We cannot, will not and haven't the money to pay the mortgage in Portugal so we just wish to get advice from someone on how Portugal bank will proceed and how we should proceed to stop them getting a judgement. Have you experience in this area with a Portugal bank ?


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## lipton (10 Mar 2013)

We're not interested in breaking down figures. We're not interested in an extended payment schedule in Portugal. We need advice on how to defend ourselves against a judgement?


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## munchy (10 Mar 2013)

Are the banks in Europe really so interconnected and motivated I wonder, because if they were surely the Irish banks would be contacting all the Spanish, French, Portuguese etc banks to find out whether they have clients with holiday homes and investment properties in the same names as their own defaulters, in order to attach judgements. I haven't heard of this happening yet, and vice versa, the many European banks owed money by Irish investors dont appear to have started forcing Irish sales here. I just wonder whether this is really an option. Yes, it is theoretically but Ive not heard of any cases yet. 

Does the Portuguese bank have the jurisdiction/ authority to contact every Irish lender and ask for client lists and mortgage details? Are these not private?


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## Jim2007 (10 Mar 2013)

munchy said:


> Does the Portuguese bank have the jurisdiction/ authority to contact every Irish lender and ask for client lists and mortgage details? Are these not private?



Well whatever about the Portuguese banks, the Irish lenders would not have the right to hand out details of your banking affairs to just anyone contacting them.

However the Portuguese banks are in serious trouble and they have lent money to a large number of Irish borrowers, so it is not unreasonable to expect they may try to collect on it.  Given that they would be going after a large number of borrowers the cost per action would be much lower than if they were taking action against one or two borrowers.  Alternatively a large loan book might be attractive for refactoring to an Irish debt collector.

I would think there is more motivation for a Portuguese or Spanish bank to act on trying to recover the debt than say a German or Italian bank. but at the end of the day it is all speculation...

Still if I was the OP I would try to get the issue sorted in some reasonable way.


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## Jim2007 (10 Mar 2013)

lipton said:


> We're not interested in breaking down figures. We're not interested in an extended payment schedule in Portugal. We need advice on how to defend ourselves against a judgement?



Well first of all we don't give out legal advice here, only opinions, for legal advice you need to consult a solicitor.

Having said that if the Portuguese bank or one of it's agents takes an action against you to get a judgment, then you will have to defend it in the same way as you would if it were an Irish bank.


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## Mrs Vimes (10 Mar 2013)

lipton said:


> I don't really know what its worth in this climate *or* what I'd actually get for it in this climate hence the fluctuations.




What it's worth *is* what you would get for it.


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## lipton (10 Mar 2013)

I've wondered could they sell the debt to an Irish debt collector ? Has it happened in the past. Surprised there is not somebody on this website who has been caught up with an overseas property in Portugal !!


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## Luternau (10 Mar 2013)

lipton said:


> I've wondered could they sell the debt to an Irish debt collector ? Has it happened in the past. Surprised there is not somebody on this website who has been caught up with an overseas property in Portugal !!



If you are dealing with an aggressive Portugese bank they could do anything including selling your loan on (if the conditions all it). I would say there are other Irish people in the same position, but they may not be here. All situations are different and you really should put up as much information as you can.


As Jim said, you should not expect to get legal advice here. Have you sought your own legal advice? It may be worth getting this sooner rather than later.


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## Time (10 Mar 2013)

The Portuguese bank may do no investigating of your status in Ireland and may launch a headlong attack on your Irish assets. It is only then that they will realise that there is nothing for them to collect and at that stage they will probably back off.

You would be well advised to put them on notice that they would gain nothing from attaching a judgement to your Irish property and that you will seek costs against them if their applications are thrown out by an Irish court.


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## Bronte (11 Mar 2013)

Time said:


> You would be well advised to put them on notice that they would gain nothing from attaching a judgement to your Irish property and that you will seek costs against them if their applications are thrown out by an Irish court.


 
OP did say his property might be worth 500K. If it is he could sell it releasing 200K to pay down the 140K in Portugal. And selling the Portuguese property should reduce the 140K even more. 

Lipton you cannot defend a case against this. No money is not a defence. You owe the money that is clear. We don't know what the Portuguese bank will do. If you have no equity it is pointless them seeking a Judgement mortgage. So you really ought to prove to them there is no equity, which might stop them. Also you might try to prove to them you have no surplus income so they don't come after you with an instalment order. Before they launch legal proceedings it might be a good idea for you to actively engage with them.

How much is the Portuguese property worth?


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## sunnyalgarve (24 Jul 2013)

*Mortgage debt is limited to sale value of property*

A friend is in a similar position. He is of the opinion that the bank cannot look for more than what they will get when they sell your Portuguese property. It's similar in the US I believe. In other words your indebtedness to the bank is limited to what they can get when they sell your property. After they sell your property they can keep all they get up to what you owe them and then that's it.


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## John Flynn (3 Oct 2013)

Lipton. Unless I am missing something from the thread, have you tried to sell the property in Portugal? (or discussed the option of selling it with the bank)


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## so-crates (3 Oct 2013)

sunnyalgarve said:


> A friend is in a similar position. He is of the opinion that the bank cannot look for more than what they will get when they sell your Portuguese property. It's similar in the US I believe. In other words your indebtedness to the bank is limited to what they can get when they sell your property. After they sell your property they can keep all they get up to what you owe them and then that's it.



That does not sound logical or reasonable. The OP owes the bank an quantifiable sum which they are pursuing, "what the bank would get for selling your Portuguese property" is not quantifiable until a sale is agreed. On what does your friend base his opinion? Does he have something more concrete to back that position?

OP, from reading through this thread, the answer to your question seems to be yes, they can pursue you in Ireland for the debt through the same means available if you owed the money in Ireland. If they get a judgement order it can be enforced like any other judgement order. The order will exist for 12 years and can be converted into a judgement mortgage against your property. This can be paid from the proceeds of the sale of your home only after your home mortgage is paid off. That judgement mortgage will only be of value to them if you have positive equity in your property. If you do, they can try to force the sale of your home to recover the money. You have the same defensive options open to you as you would if they were Irish.

You can advise them and perhaps demonsrate that there is nothing to be gained for them but that will not prevent them trying.

I think you need to stop seeing it as a "Portuguese" debt. It reads almost as if you hoped the different jurisdiction would be a protection and a distance, a firewall between you and there. That trouble in one jurisdiction was safely confined there.

You need to sit down and lay out your options in terms of your property and debt as a whole and not try to view any one part of it in isolation. You need to try and get a reasonable idea of the value of your Irish property to assess the risk to your home (300k - 500k is a very wide margin of error!). You need to investigate the possibility of selling your Portuguese property, what would be the shortfall, whether there is any option of converting the NE into unsecured debt at a reasonable rate and whether you could afford such a solution.

It won't be a simple or a comfortable exercise but at least it will give you a more secure position to argue any case from.


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## Mrs Vimes (8 Oct 2013)

I think sunnyalgarve is under the impression that mortgages in Portugal are non-recourse as they are in a number of US states.

According to this report, mortgages in Portugal are full recourse so the borrower can be pursued for any shortfall.


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