subject: Dealing with a mortgage debt in Latvia [print this page] Dealing with a mortgage debt in Latvia Dealing with a mortgage debt in Latvia
With the large number of young Latvians now settling in England I am getting an increasing number of calls from Latvian citizens who have big mortgages that they owe in Latvia secured on property which is to all purposes worthless. They want to know what they can do about it.
The good news from their point of view is that I may have a solution. I have a bit of experience now in taking a number of EU citizens through our courts in respect of debt which they have built up in their own countries. So far I have helped Latvians, Irish and Lithuanians deal here with debt held in their own countries.
They can do this because EU law recognises across its borders any insolvency order made in another country in the EU. Therefore an insolvency order made here is applicable to write off debt incurred and existing in another EU country.
In the last month alone I have been able to help some Latvians write off debts owed on property to Latvijas Krajbanka, NORD Banka and Aizkraukles Banka. These were mortgages taken out at the height of the property boom, but which now show huge negative equity as against the property.
As long as the person applying for bankruptcy is able to show that their Centre of Main Interest is here in England at the time the bankruptcy order is made, the debts will be written off. I am always being asked what a COMI is and how to prove it. The simple answer is to move to England, settle down, rent a house, seek a job, get a bank account, get a national insurance number and make your home here. If you do that then as little as four months later you can go through the bankruptcy process and leave the Latvian debt behind.
The paperwork that needs to be completed can be a little tricky and there needs to be an appearance before a Judge and so many who seek to go down this route take specialist help to complete their paperwork and book the court time.
As it can take many years and huge amounts of money to go bankrupt in Latvia, people who have settled here are now taking the opportunity to start their lives again.
