He wants to live with dignity in a world full of crises and chaos. And if it was not possible to just go and buy the necessary thing before, then with the advent of loans appeared in almost every person.
However, the joy of buying does not always last long, because euphoria passes quickly when the time comes to pay the debt. Everything would be good if there was a stable income that the borrower expected, but if there is no way to pay for loans? What to do in such a situation? This will be discussed in this article.
Grounds for debtors’ insolvency
The reasons for the lack of money can be most important – from losing a job to a serious illness. Many citizens who make another purchase on credit, of course, do not think of bad but hope for the best. But the next crisis can reduce all the plans of the once conscientious payer to face the difficult question today:
“There’s no way to pay for loans – what do I do?” Don’t despair, because there’s always a way out. In addition, it is legally possible to achieve deferred payments or even write off debt depending on the lack of money.
The borrower is the first steps if there is no money to pay the loan
The main thing to do first when the financial difficulties – is urgent to go to the bank in order to report this problem. Many insolvent borrowers rely on luck or some luck to save them from a debt hole. In fact, there is no such magic that simply repays the debtor generally writes off itself. The more time passes, the greater the penalty for late payment. The first step is to contact the bank where the loan was issued.
In addition, you must write a declaration of inability to repay the loan, because, after the oral hearing of the application, the bank administrator can forget about it by evening. It is, therefore, necessary to inform creditors in writing of their financial difficulties and the wish to restructure the debt.
Debt restructuring – what is it?
Many people who accidentally faced credit have heard of this concept, but few know what it is. Debt restructuring is the process of reviewing the debtor’s solvency in order to reduce the burden on credit payments. Debt restructuring means a measure aimed at changing the terms of a loan agreement for a debtor in order to maintain its ability to repay the debt.
Restructuring of foreign currency loans is most often undertaken by the state in crisis situations where most citizens who apply for a foreign currency loan suffer from a debt burden.
How to achieve loan restructuring
In order for the bank to meet the debtor, you must contact your manager as soon as possible with a written statement. The request should indicate the reason why the borrower can no longer repay the loan debt under the terms of the contract. It is also worth mentioning the amount of money that can be refunded, while you should write down a period of time during which the financial situation can change in a positive direction.
Do not write: “I have lost my job, there is nothing to pay the loan.” Therefore, the loan manager will not respond to the request and may consider it a refusal of its obligations and bankrupt the debtor. Therefore, in order to avoid controversial issues, it is better to write: “Due to unforeseen financial difficulties at work there is temporarily no way to repay loans.” What to do next tells the lender.
It is better not to decorate the situation, but to provide reliable information. Otherwise, the bank may verify the information provided by the borrower and refuse to restructure the loan if it does not correspond to the facts.
As mentioned above, currency restructuring loans are most often provided with state aid and it is important that you do not miss the time to apply for a contract review. Sometimes it is too late if you do not contact the bank on time, you will have to pay high interest on foreign currency loans in full.
Results of credit debt restructuring
After considering the use of borrower, the banking organization must make a decision. Banks usually meet their customers and revise the loan agreement. The insolvency debtor thus has the possibility to postpone the payment and the loan cannot be repaid for a certain period. Usually, this period is up to three months and then compulsory payments should follow, even in small quantities.
Restructuring loans can only take a short time to resolve payer’s financial difficulties. Sooner or later, the entire money loan debt will have to be repaid plus additional interest, as the time to repay the debt has increased.
This measure is extreme in order to avoid credit failure and to avoid the debtor’s bankruptcy. Therefore, if it is possible to repay the loan on time, it is better to contact the guarantor than to bring the thing to restructure the credit debt.
When can’t I repay the loan?
Many people mistakenly believe it. If problems arise, they will be able to easily refuse the obligatory payment of the loan. Neither pregnancy or maternity leave will remove these obligations. Even sickness can sometimes cause defaults because in such a situation the insurer takes over the obligation to repay the loans.
However, the insurance company does not always assume such obligations and therefore the bank can satisfy the needs of a client who has serious health problems. In this case, the creditor may offer a deferred payment for a certain period of time until the debtor is calmly concerned with health.
Another option, when there are many loans, is the repayment, which can not become refinancing. This means that the borrower must obtain a new loan to repay the old one. However, this system does not always work because each bank will study the credit history of its customers before issuing a cash loan. And if the lender sees the presence of several other loans, then he can refuse.
There is no way to pay for loans – what to do?
What to do if the bank refuses to restructure loans and refinancing is not available due to multiple failures of other banks. There is always a way out. Co-rulers and guarantors can save in a difficult financial situation. When issuing a major purchase loan, the bank usually requires the provision of one or more guarantors, which will be a debt repayment guarantee and the debtor’s solvency.
There are other situations where the guarantee also cannot repay the debt and does not have the ability to repay the loans. What to do in this case? You may declare yourself bankrupt, but you will not be able to get a new loan in the future. It turned out that there is a way out – you can sell the collateral and use these funds to repay the remaining debt.
Rights of the debtor
Both the bank and the debtor have rights that they can protect in difficult financial situations. However, they must be acquainted with them before signing the loan agreement. Banks wanting to raise their money sometimes resort to help collection agencies, which in turn begin to “debit” the debtor’s debt in all possible ways, namely, harass him at night, turn to his relatives and friends and even come to the workplace an insolvent customer.
This violates his rights. Even without the ability to repay compulsory payments, the debtor has the right to lodge a complaint with an organization specializing in such cases in order to protect his reputation and the right to a peaceful sleep.
Sometimes unscrupulous lenders do not specifically give it the opportunity to make a monthly payment to your client. For example, on the last day of the payment of the debt, the debtor is not entitled to go to the bank’s branch (the cash register is not working or for some other reason) and then charges a large penalty interest after the weekend or bank holidays.
The debtor must know that he has the right to reimburse another payment before the last day giving him this right, and the bank must accept the payment, even if circumstances prevent it. This will be the bank’s problems.
Consequences of debt to the creditor
Sometimes you may hear bold statements: “I don’t pay a loan for a year!” And nothing! “It really will, but the consequences have not influenced such unscrupulous debtors. Huge interest, bad credit history and ultimately recognition of bankruptcy – all this can be in the case of non-payment of mandatory credit payments.
In addition to fines, a banking organization applying for a loan has the right to treat the collateral property as a penalty under a loan agreement. This is also one of the common ways to get your money back.
An insolvent client who fails to repay the loan in time will receive a bad credit report from the Cream Bank and is deprived of the right to receive new loans.