Last updated July 13, 2019
3 minutes to read
Every citizen can usually take a new loan - many banks carry out the so-called “plans” for issuing loans, and try to give them out with a generous hand to everyone who turns to them. However, unlike “take”, “give” is not so simple - there can always be unforeseen circumstances that easily erase a calm life. What's next? Debt is growing, banks are becoming more insistent every day in an attempt to demand money back (and even with interest!). The debtor is increasingly feeling stress - how can you pay off the debt if there is no money?
And yet - you can! Below we will tell you how to act if you find yourself in a similar situation, and why you are still in a winning position!
What sanctions can banks apply to a debtor?
Banks often justify high interest on loans by the fact that they bear the risk of non-payment of debt. On the other hand, when such a situation happens, banks make every possible effort to repay the debt with interest. Everything is used: persuasion, exhortations, threats and intimidation.
So, the main ways that banks turn to, in addition to increasing debt exponentially:
- Collectors. Banks resell debts on cards and contracts to third parties, in other words, to collection agencies. Moreover, such transactions are carried out on unfavorable conditions - the debt can be sold for a penny, if only to get something in return. Further, the debtor is already harassed by collectors - they begin to go home, call for work, neighbors and relatives, and in every possible way get the borrower. Now you have to pay off debt for collectors.
- Courts The bank goes to court, submitted all documents on the loan. Often the debtor does not even suspect this - he simply either does not receive a summons, or comes, but with a significant delay. Then the bank makes a positive decision and the executive service is connected, you are now repaying the debt to the bailiff. How is this done:
- by seizing accounts, including those on which wages are accrued,
- by seizing property issued to the debtor.
In addition, bailiffs may impose a restriction on traveling abroad.
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How to pay off debts: 4 legal ways to solve a problem
The most important advice that we recommend to all debtors without exception is to never run from banks. This is an aggravation of the problem, not a solution. Itself will not pass and will not fall off. Children do this, but we are adults!
So what to do if there is a large loan debt? There are several options.
- You can contact the bank with a request to provide installments, the so-called credit holidays. In some situations, this is a very good option. But it is suitable only for those debtors who will soon be able to restore their solvency.
- You can contact a competent lawyer. Specialists will review your debts and help you go to court to write off part of your debts. But how to repay loans if there are a lot of them? This option is not suitable for debtors who have debts in 3 or more banks.
- If you are interested in how to pay off credit debt, and at the same time not to overpay interest, then judicial debt restructuring will be an excellent option for you. As part of the procedure, you can pay off the loan body for 3 years, without any overpayments. The procedure can be initiated through the bankruptcy of individuals, but you will not receive bankruptcy status.
- Well, the last way to pay off debt to banks is to recognize the bankruptcy of individuals. Accordingly, the sale of property is introduced. Do not worry - the only housing and a number of other property will remain with you, whatever the amount of debt. In fact, the procedure will free you from any debts to banks, as well as from a number of other types of debts.
If you are already desperate to find the answer to the question - how to close your loan debts, then you have come to the right place! Our experts provide competent legal assistance in this matter, helping to get rid of the debt burden. Contact us, we are always ready for dialogue!
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Strategy # 1: Pay More than the Minimum Payment
If you have an average loan debt of 494,000 ₽ and an average of 20% per annum, then the payment of minimum payments of 13,000 ₽ / month will stretch for 5 years. And this is only if you do not use a credit card and do not take other loans all this time, which can be difficult.
One of the best ways to get out of debt (by card, consumer, car, etc.) is to pay more than a minimum every month. This will not only help you save on the interest rate for the entire duration of the debt, but also accelerate the payment. To avoid any problems, before using this strategy, make sure that you will not be charged a fee or commission for early repayment.
Strategy # 2: Try the Snowball Method
If you are in the mood to pay more than the minimum monthly payment on loans and other loans, think about the snowball method to speed up the repayment process even more and gradually increase the pace.
First you need to make a list of all debts, from smaller to larger. Spend all your extra money on paying off the smallest loans, while paying a large minimum. After paying off the smallest debt, continue with the next smallest and so on.
Over time, all small debts will disappear one by one, which will save you money in order to start paying large ones. This “snowball method” allows you to first pay the smallest loans, which leads to the psychological effect of the “small victories”, while large ones remain for dessert. Ultimately, the goal is to launch "snowballs with money" in your debts until you defeat them, and then free yourself.
Strategy number 3: Take a side job
Snowball debt attack will speed up the process, but earning extra money will make your efforts even more noticeable. Almost everyone has some kind of talent or skill on which you can earn money, for example, translate text, draw a picture, solve a problem or become a virtual assistant.
With sites like work-zilla and fl.ru, almost anyone will find a way to earn extra money. The key is to use extra income only to pay debts.
Strategy # 4: Tighten the belt
If you really want to understand, and repay loans faster, you need to cut costs to the maximum. For example, you can live as budget as possible, with this strategy you will reduce costs to a minimum. Continue to live as fast as you can.
This method is suitable for everyone, but for everyone it is individual. You should always avoid any “extra" expenses, such as restaurants, taxis or other unnecessary expenses. As long as you live in such a tight rhythm, you will be able to pay much more for your debts.
Remember: This strategy is for temporary use. Once you have paid off your debts or become much closer to paying them off, you can start adding other expenses back to your monthly budget.
Strategy # 5: Sell everything you don’t need.
If you are looking for a way to quickly receive money, you should pay attention to your things. Most of us have something here and there that we rarely use and without which we can very well live. Why not sell it and use your profit to pay off your debts?
Think about selling goods on one of the Internet sites, this is the cheapest and easiest way to sell unnecessary things and make a profit.
Strategy # 6: Take Seasonal Temporary Work
When the holidays are approaching, many are looking for temporary employees to get more profit during busy days. If you are ready, you can take one of these jobs and earn extra money for early repayment.
Even outside the holidays, many temporary work may be available. In the spring and summer, it is necessary to work in the cottages - to dig, build, garden. In the fall, they are looking for workers to harvest.
To summarize: regardless of the time of the year, additional work without long-term obligations is available and is within reach.
Strategy # 7: Ask for a lower interest rate on credit cards and talk about restructuring.
How to get out of debt if the interest rate on your credit card is so high that you feel that paying off debts is almost impossible? It is worth calling or going to the bank to talk. Believe it or not, asking for a lower percentage is fine. And if you have a good credit history, then it is likely that you will receive a reduction in interest rates.
For example, you opened a card when% were too high, and now the conditions are more attractive. In this case, payments with a new card with a lower interest rate will be more profitable and the budget burden will be reduced.
Not only interest on credit cards, but also on some other loans can be agreed. You should always remember: the worst that bank employees can say is not. And the less you spend on fixed expenses, the more you can give to pay off debts.
Strategy # 8: Use suddenly found or received money to pay off debts.
During the year, most people faced cases when they “found money”. Maybe you got a promotion, bonus or inheritance. Or maybe you are counting on a thick bundle of money, which you will receive in the form of a tax refund for studies, medical services or a mortgage. No matter where you “found the money,” it brings you closer to debt relief.
Each time you suddenly receive some kind of income, you can use this money to pay off part of the debt. If you use the "snowball method", use the money to pay for the smallest loans. And if you have only large debts left, you can use the money received to significantly reduce them.
Strategy # 9: Get rid of expensive habits
If you are in debt and constantly think about how to reduce your monthly expenses, an analysis of your habits may be a good idea. It doesn’t matter what you spend money on daily; you should track all these costs. Thus, you will assess whether these expenses are really worth it and come up with ways to minimize or completely get rid of them.
If you spend a lot on cigarettes and alcoholic beverages, stop drinking and smoking. Alcohol and tobacco do not help you, they only stand between you and long-term goals. If you have less expensive habits, such as morning lattes, lunch at restaurants during working hours or fast food, the best thing to do is to get rid of them or replace them with something less expensive. And one more strategy, how to repay a loan faster:
Strategy # 10: Depart from ____
Each of us has some kind of temptation. For some, it can be a supermarket or a favorite online store. For others, this is a trip to a restaurant dear to my heart to taste delicious food. And for those who are prone to spending money, having a credit card in their wallet is too much of a temptation.
Regardless of the degree of temptation, it is best to avoid it until you pay off your debts. When you constantly want to spend, it can be difficult to avoid new loans, not to mention paying off old ones.
So, in order to avoid dozens of temptations, try to get home the other way. Avoid shopping centers and keep in the refrigerator the necessary products that do not need to be spent a lot. If possible, hide the credit card somewhere for the time being. You can always get it again after you pay off your debts.
It’s easy to continue living on credit if you don’t have to face a sudden disaster. But when she arrives, you are in a hurry to revise your views.
It is also quite easy to get sick from paycheck to paycheck, and then look for ways to get rid of the crushing weight of a large number of loans.
Regardless of the type of debt you have, whether it is a credit card, consumer loans, car loans or anything else, it is important to know that there is always a solution.
How to get out of debt and loans? This will not happen overnight, it takes time and liberation will certainly come, you only need to create a plan and stick to it.
Regardless of which plan you have, any of these strategies will help you pay your debts faster. And the faster you get rid of them, the faster you will begin to live the life that you really want to live.
What strategies did you use to quickly repay loans? Have you tried anything from this list?
Credit or credit card debt: pay or don’t pay ...
Against the background of the attractive picture of the growth in lending volumes, another figure is interesting regarding loan arrears: today, approximately 8.1 million people have outstanding late payments for more than three months. This means that the number of citizens faced with problems in repaying a loan is comparable to the number of residents in a metropolis. And each of them raises the question - how to pay off debt on a loan?
The consequences of even small debts on loans or cards and short delays should not be underestimated. The loan agreement indicates the degree of responsibility of the borrower for failure to fulfill the terms of the agreement - the penalty measures that the bank takes in case of delay in making the next payment. Usually this is a fine or fine, which is charged on the amount of delay. Contractual liability may be one of two options, for example:
- Accrual of 20% per annum on the amount of overdue debt on a loan (loan), if interest under the contract is accrued during the period of violation of obligations.
- The accrual of 0.1% of the amount of overdue loans (loans) and interest for each day of breach of obligations, if interest under the contract during the breach of obligations is not charged.
Each new late payment leads to an increase in the total fine. Therefore, after 2-3 months the default of the borrower can expect a very unpleasant surprise in the form of the need to make a significant amount.
Also, in addition to the liability stipulated by the loan agreement, there is a liability defined by law. In case of violation of the terms for repayment of the loan (loan) for more than 60 calendar days within six months, the borrower must, at the request of the creditor, pay the remaining amount ahead of schedule, including interest. From the moment a corresponding notice is sent to fulfill this requirement, the borrower is given no more than 30 calendar days.
Making an incomplete amount is not a way out. It is worth knowing that in the case when the payment amount is not enough to fully repay the debt, of the funds received are primarily repaid:
- overdue interest
- overdue amount of principal
- current interest
- current amount of principal.
The process of fulfillment of obligations by the borrower is recorded in his credit history: the information part of this document contains such clause as information about the absence of two or more consecutive payments under the loan (credit) agreement within 120 calendar days from the date the obligation is due. It is impossible to exclude information on late payments from the credit history, they are stored for 10 years from the date of the last change in this document.
Since verification of the credit history (its information part) may be available for the purpose of issuing a loan (loan) to legal entities or individual entrepreneurs without the consent of the subject of the credit history, access to refinancing is very limited for persons with outstanding arrears. According to information received from the Joint Bureau of Credit Histories, only 3% of individuals who received a new loan in 2017 had an outstanding delay of more than 90 days for previously opened obligations.
Поиски рефинансирования путем получения займов у частных лиц весьма рискованны, чреваты огромными процентами и необходимостью предоставления (с опасностью последующей потери) залога в виде движимого или недвижимого имущества. Обращение в микрофинансовую организацию (МФО) приводит к получению денег под неоправданно высокий процент и может еще больше углубить финансовую пропасть.
What is the solution? It will be correct if the borrower warns the lender in advance about a possible delay, without waiting for its occurrence. The best solution in this situation is the restructuring of a loan or loan or the search for options for its refinancing.
What to do if debt is sold to collectors
In the event that the debtor does not show a desire to make contact, banks are not profitable for a long time to independently deal with the issue of repayment of overdue debts. Therefore, in all countries with a developed banking structure, there is a professional debt collection service, in other words, collection agencies.
Many borrowers believe that the bank is not entitled to sell or transfer debt to a collection agency, but this opinion is erroneous. How is it that the issue of overdue debt to the bank goes into the sphere of activity of collectors?
- First of allbank can transfer to debt collection to a collection agency. This step does not mean changing the lender. The collector in this case acts on behalf of the bank, the debtor returns the money to the bank account, and the collector receives a percentage of the amount of debt for the work performed.
- Secondlybank can to sell bad debt to the agency, after which the collector acquires the rights of a creditor. In this case, we are talking about the assignment of claims, which bears the legal name “cession”. This procedure is allowed by the Civil Code of the Russian Federation and does not require mandatory mention in the loan agreement. The amount of debt does not change, it includes all fines or penalties accumulated by the time of the transaction.
In the second case, the bank sends the debtor a letter of notification of the sale of the debt, where he informs of a new creditor. The collector, in turn, notifies the debtor that he is a new creditor and intends to begin the process of collecting debt.
What should a debtor who receives such a notice do? In this situation, it is worth making sure that the lender has changed correctly. To do this, you need to require an assignment agreement from the agency to verify the legality of the transaction. It is also necessary to check Is this collection agency listed in the FSSP registry (Federal Bailiff Service). The last point is very important, because according to information received from the National Association of Collection Agencies (NAPCA), most of the debtors' complaints relate specifically to the work of “gray” collectors, who for some reason did not fall into the FSSP registry and, in fact, do not have the right to work as a professional debt collection market.
It is worth noting that the presence of “gray” collectors is a problem not only for debtors, but also for officially working collectors. In fact, after entry into force Federal Law of July 3, 2016 No. 230-ФЗ “On the Protection of the Rights and Legal Interests of Individuals in Carrying Out Activities on the Return of Overdue Debts and on Amending the Federal Law“ On Microfinance Activities and Microfinance Organizations ” (hereinafter referred to as Law No. 230-FZ or the Law on Collectors), which governs collection activities, illegal collectors should have disappeared. However, to date, the official state register of collection agencies contains 216 legal entities, while about 800 companies worked in this market before the entry into force of the aforementioned Law. The professional collection community believes that for the most part, those who did not qualify for the registry did not disappear from the market, but switched to work in the “gray” zone, without bothering to comply with the requirements of the law and collection ethics.
The debtor can make sure that he is dealing with a representative of an official agency, already by the manner of communication of the collector. Respect for collection ethics is one of the fundamental differences between a professional collector and an adventurer. A specialist acting on behalf of an official agency, when talking with a client, must tell the name, creditor name and collection agency registration number.
In the case when the debtor is dealing with a representative of a registered agency, we can say that he was lucky - all actions in relation to him will be carried out within the framework of the law. Therefore, it is worthwhile to calmly listen to the information that the specialist reports and determine ways to solve the debt problem.
How to pay off debt to a collection bureau?
A dialogue with an employee of a legal collection bureau is the first step towards solving the debt problem. How to communicate with collectors? It is very important not to react too emotionally and understand that a loan (loan) debt is an undisputed debt, as evidenced by the signature of the borrower on the loan agreement.
To pay off debt, collection bureaus have established schemes and solutions. For debtors who understand the benefits of voluntary repayment, the following suggestions exist:
- Debt restructuring, i.e., a change in the terms of its repayment. As a result of the restructuring, the borrower is able to repay the debt in a more favorable mode. One of the options may be to reduce the monthly size of payments, accompanied by an increase in maturity. Another option is to write off part of the debt if the debtor makes contact and has a firm intention to pay off the debt. Such a service is not provided by every collection agency and most often is a kind of bonus for debtors who show themselves on the positive side.
- Assistance in the sale of collateralfor example a mortgage apartment. Implementation is carried out upon obtaining the prior consent of the bank on terms favorable to the borrower. At the same time, a collection agency helps in preparing documents for the transaction and assists in the search for buyers.
- Counseling about how you can make the cost of paying a loan affordable for the debtor and comparable with his monthly income.
- Assistance in arranging debt payments without commissions in online mode. This service is not offered by all agencies, but most of them have their own services, with the help of which the debt payment procedure is facilitated.
If the debtor does not want to make contact with the collection bureau, a cardinal solution to the problem of the resulting debt is to collect the debt by sending a statement of claim to the court. From the moment the documents are submitted to the court, the property and finances of the debtor are seized in order to secure the claim and repay the debt. Section 67 of the Law on Enforcement Proceedings allows the bailiff service to impose restrictions on the debtor's departure from the Russian Federation, even if there is a small amount of debt.
In a difficult situation connected with the need to pay off a large debt to the bank, the borrower should not be afraid of communicating with an officially working collection agency. Having established cooperation with the collector, the debtor saves himself from transferring the case of non-payment of debt to the court, where a decision is often made in favor of the creditor, and part of the legal costs is subject to repayment.
Collection services for debtors
We asked Pavel Mikhmel, General Director of the First Collection Bureau, to tell about the experience of productive interaction with the debtor.
“For several years now,“ The First Collection Bureau ”has been placing a priority on its work out-of-court settlement of issues related to paying off problem debts. By acquiring creditor rights, PKB has the opportunity to offer customers individual debt repayment schemes and a variety of discounts. What are the special conditions offered by our company?
Specialists of the design bureau individually approach the problems of each client, informing him in detail about the state of debt and options for paying it off. Together with the client, employees of the First Collection Bureau develop payment schedules that are comfortable for him, arranged in such a way that the debt load is feasible for the borrower.
For those customers who do not break promises and adhere to the payment schedule, the First Collection Bureau offers the opportunity to forgive part of the debt after each payment when paying by installments.
One of the significant advantages of PCB was the creation of a modern online service for customers, with which you can learn about the total amount of your debt and get information about available special offers from our company. This is “My Account” on the website of the “First Collection Bureau” www.collector.ru, in which the client can:
- Check credit history online.
- Get full information about your debt, including possible bonuses from our agency.
- Find out about possible installment plans.
- Pay debts online without commission using the following services: bank card, Alfa-Click and Sberbank Online banking, QIWI and Yandex.Money electronic payment systems.
- Set up the “Auto payment” function, which is especially convenient for forgetful people. Connecting auto payment allows you to not violate the debt repayment terms and exclude further communication with the collector.
- Get a certificate of lack of debt, as well as other necessary documents.
The First Collection Bureau also offers its customers bonuses for showing activity in resolving the issue of debt repayment:
- For registration on the PCB website - by registering, the debtor gets the opportunity to independently regulate the issues of paying off his debt without interacting with the collector.
- For the first payment made by the client - this action confirms the willingness to pay, so the borrower can count on a more loyal attitude from the Bureau, which is demonstrated by the accrual of a bonus.
- For maintaining contact - this bonus from the First Collection Bureau company is given to those customers who do not shy away from communication. It is these customers who are given the opportunity to pay off installments. Moreover, during the installment period, it is possible that part of the debt will be forgiven as an incentive (if the client strictly adheres to the payment schedule). ”
P. S. More information on the work. PCB can be found on the agency’s website.
* Non-public joint-stock company First Collection Bureau (NAO PKB) operates on the basis of registration certificate No. 3/16/77000-KP of December 29, 2016 issued by the Office of the Federal Bailiff Service in Moscow.
Rule 1: Do Not Be Afraid
Fear pushes for rash steps, especially if lenders press. In my case, there was even extortion and blackmail attempts.
Try to call the closest person and make an appointment. In my case, it was a father. Strictly forbidden to be alone. You can make irreparable mistakes.
Tell it as it is, without embellishment. You should discuss further actions together: letters, calls and any steps you need to think through with all the possible risks.
You will see, it will instantly become easier.
Rule 2: analyze the situation
A very important process that needs to be carried out is determining the depth of the problem. The algorithm is as follows:
- We put off all urgent and important matters.
- We warn relatives about temporary inaccessibility.
- Turn off the GSM-connection and all alerts on the phone.
- Turn on the background music of the relax format.
- We write out methodically absolutely all debt.
An important point - the format of "Google Sheets" is ideal, since you need to have a separate plate, which will always be at hand.
Most likely, it will be emotionally difficult. You will try to lose some of your debts with the sauce “well, this is for mom, this is for dad, you can not write ...”. No you can not. We write everything, it is important.
Rule 3: go through the phases of accepting the inevitable
In phase denial You will use all the means of escapism - aimless freezes on the Web, games, series. You can’t do this. We pull ourselves out of this state. We need to feel the point at which we are, otherwise this destructive phase will permanently cover.
Anger will be. Do not extinguish it, it is a discharge. Of course, to reasonable limits - do not go too far and go to the physical manifestations of aggression.
Bargaining dangerous. It is at this phase that you will replace the real picture with an illusory one: yes, it seems, and not so much debt, everything seems to be given back, everything is normal. Not. Not OK. We throw ourselves away from the comfort zone.
Only then will it come to us humility: I know where I am, I soberly understand how to act, I am steadily moving towards a positive balance.
Rule 4: do not pay too much
Since, most likely, your receipts are irregular, you must first get rid of the maximum possible number of regular payments so that the amount of debt is not charged.
Penalties, fines, fixed payments, subscription fees for the use of services - everything needs to be filtered through a fine strainer.
If the task is to save the business, use the Pareto principle:
- only 20% of your customers bring you 80% of the profit,
- only 20% of your customers load 80% of your work day.
Important: profit is the amount of live money that you directly put in your pocket.
For two years I could not understand that I had mixed up profit and revenue. When the error was found, six out of eight customers were transferred to the reliable hands of partners. As a result, the working day was unloaded almost completely, and the loss of money did not exceed 25%.
If you still have employees, try to agree on piecework or hourly pay. Such a scheme will be more profitable for both parties, and the main advantage is likely to be a radical improvement in labor productivity.
Rule 5: develop payout mechanics
Next, it is necessary to estimate the minimum possible income, from which to subtract the amount to ensure livelihoods, and take the remaining amount of funds as a resource for eliminating debts.
This very resource must be proportionately divided into each segment of debt obligations. For this purpose, I entered a separate tablet in Google, where there is a total amount of debt and specific recipients.
It works according to the formula:
The amount of a specific payment = the amount received × the ratio of the liquidation resource × ((the amount of a particular segment / (total debt / 100)) × 0.01).
Difficult, let's flesh out.
- The total amount of debt - for example, 1 million rubles.
- The ratio of the liquidation resource is 0.2 (this means that we direct 20% of personal income to liquidation of debts).
- The amount of a particular segment is 250,000 (for example, debt to a supplier).
- The amount of receipt is 30,000 (for example, someone gave, miracles do happen).
You need to understand how much to pay the contractor:
30 000 × 0,2 × ((250 000 / (1 000 000 / 100)) × 0,01) = 1 500.
The table should read the amount automatically. We drive in the corresponding cell the amount of receipt - and pay what happened.
1. Do not skimp on lawyers
In my practice, three specialists refused to conduct business. With different formulations, but the reason, most likely, was the lack of a prospect of winning - but why spoil your rating.
A competent lawyer will not give any guarantees. On the contrary, in the consultation phase, he will prepare you for the worst case scenario. But if he gets down to business, then you should feel the reinforced concrete power in every word and gesture.
I do not romanticize, this is really very important. Any court, especially for the first time, is a terrible stress, and your main weapon should be the Jedi calm and confidence in their rightness.
2. Do not rely on bankruptcy
There is an illusion that the relatively fresh regulatory framework for bankruptcy of individuals allows you to legally jump off payments of debts, loans, fines and penalties. Is it worth explaining that this is not so?
Most likely, you will not be able to officially work, and all your property, with rare exceptions, will go to the so-called bankruptcy estate to pay off debts. In addition, bankruptcy is not at all a cheap procedure, and the result is often unpredictable.
Avoid this, in the most extreme case, carefully select a specialist.
3. Do it yourself
Partnership should always be mutually beneficial. Moreover, often the first business is created in a partnership for only one reason - because of the principle of shared responsibility.
There are two possible outcomes:
- partner-leader will crush the authority of another,
- the tandem will fall apart and proceedings will follow.
There can be only one managing partner. The rest should only in strictly specified periods be interested in whether the company reaches the breakeven point, whether everything is according to plan, when is the profit and if help is needed.
Well and the most important thing. This is just money, do not be silly. And may common sense keep you.