Problem with loan repayment – what to do?

March 21, 2016 It doesn’t take several years for our lives to change completely. Sometimes it only takes a few minutes for relatively good future prospects to disappear from our view. You can get caught up in problems instantly, which will quickly ruin your current location. For example, lose your job and lead to a delayed payment of the cash loan installment. Fortunately, this is not a dead end. If we made a commitment some time ago, and now we are unable to pay the installments, we can use several solutions. Our expert will advise you on how to overcome the financial crisis. 

Polish debt is still a current problem

Polish debt is still a current problem

The problem with loan repayment concerns many Poles. They ask themselves every day what to do about late payment of the cash loan installment and any other liability that is the source of their trouble. Unfortunately, skillful dealing with debts is not an advantage of the inhabitants of our country. Quite the opposite – credit installments often overwhelm us. According to data from the beginning of October 2017, the value of overdue debts is PLN 25 billion. 3 million outstanding claims belong to 1.8 million Poles. The most unreliable payers are men, who have to pay back as much as PLN 19 billion. Why are we getting into debt? Mainly through loans, telecommunications contracts and loans.

A break in loan repayment is not a dead end. You can effectively deal with temporary financial indisposition that has affected our budget. What to do to see the future in positive colors again?

Negotiations with the bank

Negotiations with the bank

First of all, contact with a banking institution cannot be avoided, counting on the statute of limitations on debt. Although the debt arising from the non-repayment of a cash loan or loan is barred after three years, according to applicable law, the creditor is still entitled to claim reimbursement. Because the statute of limitations does not expire, you can still claim a refund before the court. Only when the debtor raises an objection of limitation does the court agree with him. Otherwise, the debt collection company will easily obtain an order to pay the expired claim, because the judicial institution is not required to thoroughly investigate the case. The government is working on a statutory prohibition on pursuing time-barred claims, but this is only a draft amendment.

By negotiating with the bank, you can get out of the crisis by finding a solution that will be beneficial to both sides. We should not hesitate to talk. The sooner we report to the institution, the better the chances are that our requests will be accepted. What can we apply for?

Suspension of loan repayment

Suspension of loan repayment

The first option is to suspend loan repayment, i.e. credit holidays. It is worth knowing, preferably before signing the loan agreement, whether the bank we selected allows you to temporarily stop paying installments. Thanks to this, we will avoid the consequences of late payments. Sometimes banks agree to a suspension of repayment for several months, without exempting us from paying interest on the loan. The suspension concerns only the installment itself. What’s more, you should also take into account the commission on credit holidays. Financial institutions try to help customers, but each additional service usually involves fees.

Repayment of a cash loan while complying with the contract is very important to us. If we do not comply with the initial arrangements, we will lose financial credibility. Then future efforts to get a cash injection may prove fruitless.

Change in the amount of cash loan installments

Change in the amount of cash loan installments

The difficult financial situation can also be normalized by changing the amount of cash loan installments. Initially, it seems to us that the set amount of payments will not disturb the peace of budget management. Unforeseen accidents and unexpected costs can make the installment too big.

Sometimes the problem is not the installment itself, but the day of payment. When determining the terms of the contract before taking out the loan, we did not pay attention when we receive the payment. As a result, we are unable to accumulate the necessary funds on time. Then eliminating the trouble can be very simple.

Extending the loan period

Extending the loan period

If neither credit vacation nor change in the amount of cash loan installments are solutions that would be helpful to us, perhaps it will be more convenient to apply for an extension of the loan period? The bonus in the form of extra time to settle the loan can be beneficial to our budget. Thanks to this we will reduce the monthly installment.

Keep in mind, however, that the new repayment date is tantamount to an increase in the amount we will have to pay. The bank will add additional interest, but since we avoid a bailiff, it is worth considering such a solution. Remember to recalculate all costs carefully and plan your finances with all fees in mind.

Borrowers Support Fund

Borrowers Support Fund

Also, when we have a home loan, we can get the help we need. If we lost our job and registered as unemployed, let’s apply for funds from the Borrower Support Fund. From February 12, 2016, the Fund provides support for a period of up to 18 months, in the amount of mortgage loan principal and interest installments, but not more than PLN 1,500 per month.

Such support should, of course, be returned, but only after 2 years from the end of receiving support. The funds can be used by people who lost their jobs because of no fault of their own. The Borrower Support Fund is therefore not for disciplinary dismissals or for those who have themselves resigned. What if we work and we still can’t pay it back? When the monthly loan installment exceeds 60% of our income, then we can also apply for such assistance. Applications for support should be submitted to the branches of the banks that granted us the housing loan.

Credit Consolidation

Credit Consolidation

Consolidation of liabilities may also be a beneficial solution. It is a particularly attractive proposition for people who have problems with timely payment of several simultaneous payments.

What is the consolidation loan? It is a combination of various receivables (e.g. cash, mortgage and installment loans) into one receivable, often much lower than the sum of individual receivables. The exact amount depends on the conditions the bank offers us and the loan period. An additional convenience is the possibility of receiving an additional amount that will be used to pay for the most urgent needs.

Declaration of consumer bankruptcy

Declaration of consumer bankruptcy

When the installment overwhelms us, the final solution is to file for bankruptcy. There is one condition – debts cannot be our fault. If we had insufficient knowledge or we show that we did not understand the formal issues, the court may also grant our request and cancel the liabilities. The same as in the case of job loss, illness or participation in an accident that caused health damage. Each case is thoroughly investigated to exclude the applicant’s dishonesty.

Who can definitely not declare consumer bankruptcy? Is a person who currently conducts business activity or has had such activity during the last six months. Does this not concern us? In that case, we can apply to the bankruptcy court of your place of residence.

How to contact the bank?

How to contact the bank?

How to contact the bank when we have a problem paying off the loan?

Three basic ways to contact a banking institution:

  1. A visit to a bank branch.
  2. Hotline phone.
  3. Submitting an application by post or email.

It is not important which way you choose. The main thing is not to underestimate the trouble and talk to find the best solution. The lack of any action will not make the problems disappear. On the contrary, trouble will increase and sooner or later we will have to face the unpleasant consequences of our decisions.

No loan repayment – consequences

No loan repayment - consequences

Lack of loan repayment will always have consequences.

Failure to meet the debt settlement deadline may lead to:

Loss of financial credibility related to entry in the register of debtors. ERIF? KRD? BIG InfoMonitor? We will be able to find our data in each of these databases if we exceed the payment deadline by a set number of days. Impeccable debtors are also recorded in the Credit Information Bureau. By downloading the free BIK report, we will find out in what light financial institutions see us,

Debt collection proceedings, and if the actions of the debt collector do not bring results – bailiff proceedings. Bailiff’s powers are much greater. At the initiative of the creditor, in order to repay the debt, it may occupy further elements of our property,

Debt spiral – we often try to pay the installment with another loan or online loan. Before we look, our budget will be in complete ruin. You have to strive for financial support – then it will serve, not hurt. If we have nothing to pay off the first claim, it is better than to apply for the next one, to reduce expenses or find a better job.

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