The situation when there is nothing to pay a loan for, for many Russians, alas, is a reality. What to do when debts multiply like a snowball, all the phones cut off collectors with threats, and banks start calling friends and relatives to pay off their debts? If you look at everything, it turns out that many of the described actions of creditors are illegal, and the payer has very real chances to get a convenient debt restructuring.
Negotiations with creditors
If there is nothing to pay a loan, then the first thing to do is contact the banks you owe. Do not pull up to the last and come to the office on the day of payment, or even a week after the delayed admission. The bank is interested in the return of money no less than you. And if you apply in advance, you can find many quite acceptable options for getting out of an unpleasant situation.
So, the most obvious and simple are the following options:
- Negotiations with creditors is the first thing to do in this case.
credit holidays – deferred payment for an optimal period until the borrower has money;
- granting of a “grace period” – for example, paying only interest or, conversely, a loan body within 2-3 months;
- reduced payments — for example, making only half of the debt this month, and 1.5 times the size of the regular payment next;
- postponement of the payment date – for example, a few days later, if the enterprise has changed the date of salary issuance;
- refinancing a loan with the ultimate goal of reducing the monthly payment – most often by increasing the repayment term (for example, from 5 to 7 years).
It is better to apply at least a week before the next payment. The bank will have time to consider many different options and make a mutually beneficial loan repayment decision. It is also important to know what will happen if you do not pay the loan at all?
In order to be convincing when talking with the loan officer and the head of the department, you should attach documents showing your financial distress and that you have nothing at the moment to pay the debt. It can be a variety of papers, for example:
- a reduction order and a copy of the employment record with a corresponding record;
- birth certificate of the child;
- death certificate of the co-borrower or a close relative, at whose expense the debt was partially repaid;
- the claim in court and the application for suspension of work, if the employer delays the salary;
- certificate of disability;
- an extract from the medical record, indicating that a serious illness has occurred in the borrower or an expensive operation has been conducted, as a result of which his working capacity is temporarily limited;
- documents on damage to income-generating property, such as a rental car.
It is good if you have not made a single delay before contacting the bank and have been paying the loan for a long time. In this case, employees are more willing to meet you, especially if you confirm the reason for your temporary insolvency.
But even if a few delays were made on the loan and fines began to “drip”, then there is no need to hide. Negotiations (or at least a demonstration of readiness for them) is the first step towards establishing normal relations. It is possible that the bank, seeing your willingness to pay the loan further, will make concessions and write off the accrued interest. During the negotiations, you can achieve a more convenient payment schedule.
Loan refinancing – a simple way out of a difficult situation
If your financial condition is shaken only temporarily, and there is a chance that everything will be restored, then it is advisable to do a refinancing of loans. Simply put, it is a collection of many small payments to one. If you perform this operation correctly, you can get a lot of advantages:
- The interest rate decreases, and with it the overpayment.
- Reduced monthly payment.
- You can choose a convenient day to pay off.
- Instead of multiple payments, one.
The most convenient way to refinance is to find a special program in a large federal bank. The institution’s specialists will help you collect all the necessary documents and negotiate with third-party banks. In fact, you will close all other debts with a new loan and you should remain with only one organization.
Despite the fact that outwardly such an operation looks tempting, not everyone is able to achieve refinancing. To obtain bank approval, the borrower must meet strict requirements:
- not have a single delay on current loans;
- his income should be enough to service the new payment;
- It is necessary to provide the same security as under the terms of the previous agreement.
Thus, refinancing, in the understanding of banks, is the granting of a loan to a trustworthy payer, and not “rescue of drowning people”. Debtors in most cases, approval does not shine.
Another thing is re-lending, i.e., renegotiating the terms of a valid loan. As a rule, this is an extreme measure for debtors who find themselves in a difficult life situation. Most often, the loan term is simply extended to reduce the monthly financial burden. Sometimes the bank goes for the forgiveness of fines or allows you to pay them later, if there is nothing to pay now.
Another way is to make independent refinancing. Simply put – take a new loan on the best terms and pay off all existing debts. Here it is important to take into account a number of points:
- if you have so many loans, then the new loan may simply not be approved, so you will have to either confirm the presence of additional income or issue a loan to a third party;
- it is worth taking a new loan if it is cheaper than the old one by at least 2 percentage points, otherwise it is simply not profitable;
- the loan must be taken for the same period as it remains to pay as before – otherwise, with an external decrease in load, the actual overpayment will be more;
- repay first and foremost credit cards and loans with a rate above 33% per annum, regardless of their size;
- Please note that you may have to take out insurance – order the amount of the new loan a little more than necessary.
Re-lending issues should be treated carefully. The slightest mistake can cost a lot of money, and instead of reducing the credit load you get even more debt.
How to deal with collectors?
If you have not paid the loan for a long time, and collectors are attacking you, then it is too late to negotiate with the bank. Your goal is to build a competent interaction with those to whom the credit institution transferred your debt.
First, it is necessary to clarify how legitimate the “sale” of debt is. Usually all the rules of the transfer of obligations prescribed in the contract. Without notifying the borrower, banks are not allowed to do this.
Secondly, you need to know whether the transfer of debt occurred, or the bank simply “asked” collectors to influence the debtor psychologically. Sometimes the borrower may be called bank security service, seeming to be collectors.
Thus, when you contact the collector you need to know a lot of information:
- his name and position, the name of the organization he represents;
- loan agreement number and the name of the bank that “sold” your debt to it;
- total debt and monthly payment;
- details for the payment.
The data provided by the collector must match the data in your copy of the contract. Collectors do not have the right to increase the amount of payment due to fines or change any conditions: to increase the interest rate, to renew the contract, etc. If you have already transferred the debt to the collection agency, then they have the right to charge only what is provided for by the current credit contract. They want more – let them make another agreement with you.
With regard to information about the agency and its details – it is necessary to verify the organization. Sometimes it turns out that debts are demanded by people who have no relation to collectors or banks.
In most cases, the callers behave in a boorish way, threaten, call space fines. It is recommended to record the entire conversation on the recorder with prior notification of the collector – then they behave more decently. You need to know that the law protects you, and collectors can not:
- Threaten you personally or your family – criminal liability is provided for this, which you can notify the caller about.
- Insulting you – for this, too, provided an article.
- Require additional amounts – penalties and interest for the use of the loan, and so spelled out in the contract, no one else can get from you.
- Require immediate repayment of debt, otherwise threaten with the withdrawal of an apartment, material assets, a ban on traveling abroad, etc. – if you are obliged to pay, then only under the terms of the contract, and the court decides all matters related to confiscation and bans but not a collector.
The best way to talk is this:
- quietly listen to the collector;
- find out all the information about it;
- report the inadmissibility of threats;
- refuse to pay the accrued fines, but agree to pay the debt;
- propose to resolve the issue in court.
Similarly, you should act if you call from the security service of the bank and threaten to confiscate property. First of all, it is necessary to propose to settle the conflict before the trial by refinancing. In case of refusal, you must send a revocation of the permit for the processing of personal data to the bank by registered letter (then the institution will not be able to transfer the debt to anyone), as well as a repeated offer for the pre-trial settlement of the dispute.
Attention: if the contract specifies collateral, such as an apartment, the bank may well have it at its disposal for failure to pay the loan. However, this cannot happen arbitrarily, but only by a court decision.
Going to court
This is what you should strive for if banks and collectors overdone their threats and fines.
If your loan was handed over to collectors, then the court is the only way to achieve a favorable outcome of the situation. Collectors, while threatening such proceedings, are in fact afraid of court hearings. In many cases, they end up with the fact that all debts are written off from the borrower, and the amount of payments on loans is determined in the amount of no more than 40% of his income.
You can not wait until the bank goes to court, and act proactively. In this case, it is you who will dictate the terms of the future loan restructuring. Freed from paying the debt, definitely, will not work, but it will be possible to produce it according to a convenient scheme. Be sure to demand the cancellation of fines and penalties, especially if their size has already exceeded the amount of debt.
Reassure the judge that you do not refuse to pay the loan, but are temporarily unable to do so. Attach the documentary evidence of your temporary disability, show that you tried to negotiate with the bank and collectors before filing a claim.
How to save property if you have nothing to pay?
If the amount of debt is impressive, and you have nothing to pay, the bank can send a penalty to your property. Therefore, in order to protect your apartment, car, household appliances, etc., you should prepare:
- find at least some work to show the presence of permanent income;
- try to accumulate the maximum amount in cash so that you can pay off part of your debts and not pay off your property;
- give expensive property to someone from close relatives or friends;
- Prepare evidence that the property is the tool through which you earn money (for example, you earn money as a private cab driver or freelancer using a computer and printer).
Consider a number of points:
- any transactions during the year preceding the court session may be challenged and declared null and void if the court decides that you deliberately dispose of the property;
- the apartment, which is the only housing, can not take away;
- they cannot take away also personal belongings, children’s things and objects of a specific purpose necessary for life activity (for example, medicines, wheelchairs, etc.);
- property is sold at auction at prices well below average, so if you don’t need something, it’s better to sell it before the process and close some of the debt.
Do you need bankruptcy?
With the issuance of the law on bankruptcy of individuals, many debtors, if they have nothing to pay the loan, have wished to take advantage of the new opportunity. You have to decide if you need it. Bankruptcy is usually the last resort when the amount of debt exceeds all reasonable limits, and the payer has no way to pay it off. In addition, such a measure can be applied to individual entrepreneurs who are responsible for their obligations with personal property.
Bankruptcy does not mean debt forgiveness. If a person is declared insolvent financially, then all his property, including an apartment and transport, will be sold to maximize the repayment of loans. First of all, the pledged property, cash and securities will be seized.
In addition, the bankruptcy procedure itself involves a lot of costs: for the arbitration manager, for holding an auction, for appraising property, etc. The bankrupt will need to pay them at his own expense.
After the termination of the process, the impoverished citizen will be subject to certain restrictions for the next five years. So, he will not be able to:
- get a loan or act as a guarantor;
- set up a company or open a bank account for individual entrepreneurs;
- hold a management position;
- enter the military or civil service;
- travel outside the country.
It is much easier and more expedient to agree with creditors on a mutually beneficial debt settlement scheme. If the world did not work, then in court. But it is better not to declare bankruptcy.