This year has been very difficult for many families who had their assets mortgaged. The coronavirus has forced us to find, in dation in payment, the solution to the non-payment of mortgages.
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What is it?
Dation in payment appears as a solution to the fact that we cannot meet the mortgage payments. Thanks to it, we managed to extinguish the existing obligation between creditor and debtor. How? Both agree that the debtor will transfer the mortgaged asset to the creditor. In what concept do you receive them? As a payment, therefore, the initial obligation for which the debtor was obliged to the creditor was extinguished.
For many, payment in lieu is the clearest solution to avoid foreclosure. We free ourselves from a clear and enforceable debt.
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Advantages?
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- The debt we have with the bank would be terminated at the time we deliver the mortgaged property.
- Economic savings: A foreclosure is very expensive.
- A dation in payment allows you to negotiate, for example, to stay living in the property in exchange for a social rent.
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How to get it?
Is not easy. Only in certain cases can we take advantage of it, since a law firm such as Martinez & Caballero Abogados has to negotiate with the bank this possibility of giving the asset as payment of a debt. However, the bank is not obliged to accept the dation in payment and can ask us to comply with certain requirements.
Once we have freed ourselves from this debt, and with a view to granting future new loans, it is possible that the bank will make it difficult for us since we are a risk profile for future compliance with our payment obligations.
Anna Nicolàs Torán
Lawyer Department Civil Law.
Martínez Caballero Abogados