Getting into financial problems is still unpleasant. You may be surprised by unexpected expenses, loss of employment or illness. It is important to have a financial reserve to help you overcome this unfavorable period. But sometimes even a reserve is not enough …
What do you need to do if your income is not enough to pay your mortgage , loan or credit card installments? We asked the lawyer of the Bank:
What should the client do if he is unable to repay the loan?
First of all, it is necessary to contact the bank without delay and inquire about the possibilities of resolving the situation. The issue of insolvency needs to be addressed at the outset, increasing the likelihood of finding an appropriate solution . The longer the delay, the greater the problem.
What options can the bank offer the client to overcome the unfavorable financial situation?
The options are different, such as extending the maturity of the loan and reducing the original set monthly installment, deferring the installment, forgiving part of the outstanding loan accessory or refinancing it. In such cases, the Bank assesses not only the client’s previous payment discipline, but also his active approach to solving the situation.
In any case, ignoring Good Finance’s reminders or debts by the client cannot be considered an active approach. In this respect, however, it should be stressed that there is no legal entitlement to reduce repayments, deferment or loan refinancing and, if the bank agrees to such a client’s request, it is always a positive step on its part.
Bank proceed when a client stops paying off a mortgage / loan?
In general, the bank will notify any client who is in default of repayment to the bank by sending written reminders and requests to the address of the client specified in the contract or last notified to the bank by phone, SMS or notification via internet banking. In practice, we often see that clients do not fulfill this reporting obligation to the bank.
It should always be borne in mind that when contacting a client, the bank relies on the last contact details provided by the client , which is mostly the contact details provided to the client when entering into a contractual relationship, and it is therefore important to always inform the bank of any changes to these details.
Will the bank refinance the loan or allow repayment?
At the client’s written request , the Bank may, at its discretion, allow deferral of principal or full repayment of the loan in the event that the client is in difficulty repaying the loan. It should be noted, however, that this is not an absolute repayment of installments , that is, any repayment or reduction of repayments will have to be made to the bank after the grace period.
When applying for deferment of payments and refinancing the Good Finance loan, they also check, among other things, the client’s ability to repay his obligations properly and on time. Therefore, it is essential that the client asks for an interruption of the loan repayment in time, ie not only after he has not paid several installments.
In reality, how are Good Finance accommodating clients who have difficulty repaying? Will they meet them at all, or vice versa, will they pay off the entire loan?
From our practice, we have the experience that Good Finance strives to meet their clients, who temporarily find themselves in a difficult financial situation. However, it is always about how the client starts to solve his financial situation with the bank in a timely manner. Good Finance solves each case individually and there are several ways to solve the problem. Therefore, it is necessary to state in concrete communication with the bank a specific reason that caused the client’s temporary insolvency, such as loss of employment, a significant decrease in income or serious health problems.
The opposite situation occurs when the client fails to fulfill his contractual obligations towards the bank, is passive in solving the situation, he does not repay the debt and does not respond to Good Finance’s calls. In this case, the bank may, after exhausting all possible solutions to the situation, proceed to declare the extraordinary maturity of the loan, which means for the client that the loan becomes repayable in its entirety and the bank will require the client to repay the loan. default interest, ordinary interest or charges.