Dation in payment of the main residence
This consists of handing over to the bank the home securing the loan in exchange for the cancellation of the outstanding debt.
Since the measures of the Code are successive, the following circumstances must be present in order to apply for dation in payment:
- The debtor meets the exclusion threshold.
- The house purchase price complies with the limit imposed, with a maximum of €250,000.
- The debt restructuring plan is unfeasible.
- The institution has opted not to apply the debt reduction.
- Although the bank has initiated foreclosure proceedings, the auction has not been announced.
- The home is not encumbered with subsequent charges.
- The request for dation in payment must have been submitted within the twelve months following the request for restructuring. After this period, any action by the institution would be outside the Code.
The dation in payment fully extinguishes the debt secured by mortgage and the personal liabilities of the debtor and third parties.
At the time of requesting the dation in payment, the debtor can request to rent the home for two years by paying a rent of 3% of the total amount of the debt at the time of the dation. In the event of non-payment of the rent, a late-payment interest of 10% will accrue.
The Gómez family started having difficulties paying their mortgage in 2018 and on 15 March 2019 they requested debt restructuring. As they met all the requirements, the institution drafted a restructuring plan, but this proved to be unfeasible, since the Gómez family had no income. On 15 September 2019, the family requested the debt reduction, indicating that, if the institution opted not to apply it, they would request the dation in payment of their home.
Because 12 months had not passed since the date of the request (15 March 2019), they were within the deadline to request dation in payment.
The Fernández family started experiencing difficulties in 2014. As they met all the requirements, the debt was restructured with effect from 15 April 2014. For the first five years of grace period, the Fernández family paid the interest instalments at Euribor + 0.25. At the end of this period, on 15 April 2019, the family did not have sufficient income to pay the new instalments and requested the dation in payment of their home.
In this case, because more than 12 months had passed since the request in 2014, the institution refused the dation in payment.
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