I’m Stuck With an Apartment Loan in Poland I Can’t Pay. – Rafal

“Dear Jon,

In 2007 I took a loan to by a flat which was still under construction and all money from that loan of almost 100K £, has been disbursed directly to the building company account towards the price of the apartment. Unfortunately, this building company bankrupted and non assets left to cover my debt so I still have pecuniary obligation of 80K £. This all happened in Poland. This loan have some collaterals, however it is not mortgage as the apartment as well as the entire building has not been finished – thus mortgage has not been established. Nevertheless, there are two other collaterals:

• First one is a loan insurance (called ‘insurance up to the mortgage establishment’) , which would be disbursed to the bank (only) in case I would stop paying my installments, but in such case I’m obligated (in accordance with the loan agreement) to pay this all back to the insurance company – so this protects only the bank. As I mentioned above, I’m obligated to pay 180£ each quarter for this, although the mortgage will never be established, as the apartment will never be formed.

• Second one is ‘transfer of obligation’ – possible future obligation from building company to the bank. This means that before this building company bankrupted, all possible future obligations from this company to me, which normally I would have right to, were transferred to the bank.

Currently I live in England Wiltshire. I’m paying this installments each month as well as the insurance. Each month I pay credit installment of 350£ and each quarter I need to caver insurance fee of 180£. I’m obligated to do so by the loan agreement. Although I’m paying this, it looks like the bank is going to terminates this loan agreement, as there is no goal of this credit. This would mean for me the commitment of paying whole 80K £ in one week time, otherwise bank would get the right to start debt enforcement proceeding. Due to this risk, now I’m thinking about bankruptcy.

To provide full view on my situation I would like to supply some more details about my relations with the bank where I took my loan. All described in the paragraph below happened in Poland before I move to UK.

Basically, about one year before building company bankrupted, I found that this company is not in good financial condition and I informed bank about this fact. Then I decided to terminate my contract with the building company, which I did, to get bank’s money back.

Since building company refused to refund money, I sued this company to get many back.

I’ve informed bank about this as well, and then as a response bank terminated the loan agreement. According to the bank this was because I terminated contract with building company so there was no goal of the credit any more.

What’s more, it turned out that due to this one of collaterals called ‘transfer of obligation’, I do not have entitlement to bring proceedings against this company, as all possible commitment from this company belongs to the bank, not to me.

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This meant that my suit was not effective. I tried to negotiate with the bank and asked them either to transfer the right to the obligations back to myself or to sue the building company by themselves.

For both my requests bank refused. Eventually, bank proposed that the only possibility for me to avoid necessity of refunding whole credit in so short period of time is to back to the agreement with the building company – the one which I’ve already terminated.

I did it, as I couldn’t find better solution, Then, after about one year this building company filed an declaration of bankruptcy where they explained that the reason of that is the financial crisis which heat Poland at 2008. This declaration has been accepted and this company officially bankrupted.

After some time I filed a sue against the bank. Ground of my action was the crisis which leads the building company to the bankruptcy (so the crisis as an extraordinary circumstances) and behavior of the bank after I’ve terminated contract with this company (as a violation of principles of community life). Eventually, the court dismissed my action saying that can’t see any relation between crisis and building company bankruptcy and also that there is no blame on the bank side at all. So I lost the case and I’m still obligated to pay the installments, insurance, and the is huge risk I will be facing debt enforcement proceeding.

So this is my story. This situation is very hard for me. I’m dreaming about starting new life without this debt. Thus I would like to kindly ask you for your advice and help.

In regard to what I wrote above, I would like to ask the following questions:

1. Am I eligible already to bankrupt due to the debt which I described?

2. In case bank would terminate this loan contract, would I be eligible to bankrupt in respect to this debt?

3. If the bank would use this insurance which I’m paying for, would I be eligible to bankrupt in respect to the debt against insurance company?

4. Under the circumstances, that all the money from my loan has been disbursed directly into builder’s account which then bunkrupted, am I obligated to continue payments to the bank at all ? I’m asking how it is according to UK’s law

Thank you in advance
Kind Regards



Thanks for providing a good bit of detail and background about your situation, unfortunately we do not provide legal advice, so I would suggest speaking to a Solicitor in England and possibly also in Poland.

I can provide some advice regarding going bankrupt in England and how it will relate to some of the debt(s) you have in Poland.

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As Poland is in the EU, and debts in the EU can be included in a UK bankruptcy, it may be possible to go bankrupt and include these debts. But there may be a few issues you may wish to be aware of in doing this.

Bankruptcy in the UK is only for unsecured debts, so if the loan in Poland is basically a mortgage or secured by the flat, completed or not, that loan cannot be included in a UK bankruptcy. If the flat were to be repossessed and there is a loss or shortfall, that shortfall is then unsecured and can be included in a UK bankruptcy; or if there never was a secured loan, then it can be included in the bankruptcy.

Next would be the issue that if you were to go bankrupt in the UK do you meet the residency requirements, and is the majority or centre of your interests in the UK. You live in the UK, bank, pay taxes, work, etc, all in the UK.

Also, do you have any property or assets or debts in the UK? Any debts in the UK will be included in your bankruptcy, and any assets could be taken to be sold.

So a few points to ponder before deciding to go bankrupt in the UK.



Jon Emge is an experienced UK debt advisor who has helped thousands and thousands of people in the UK to deal with problem debt. Jon specialises in finding good solutions for problem debt using a variety of UK specific techniques.

If you have a question you’d like to ask about how to get out of UK debt, just use the online form. I’m happy to help you for free.

Jon Emge is an experienced UK debt advisor who has helped thousands and thousands of people in the UK to deal with problem debt. Jon specialises in finding good solutions for problem debt using a variety of UK specific techniques.

If you have a question you’d like to ask about how to get out of UK debt, just use the online form.

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