Today, there are many methods to get rid of credit debt. Let’s talk about the simplest and most popular.
Credit holidays (postponement)
The parties agree to postpone payments several months in advance in this option. Your monthly payments will increase due to unpaid fees.
The legislation of the Russian Federation establishes that access to credit holidays is possible for borrowers whose official income has decreased by 30% or more compared to last year. The grace period can be up to 6 months. The payer must present to the bank all the necessary documents.
Debt restructuring and changing conditions
The concept of debt restructuring refers to revising an agreement with a credit institution. If necessary, you can lower the interest rate, increase the repayment period, and change the currency for payment. Also, the bank can change the monthly fee schedule, determine when the debtor will pay only interest on the loan, and other conditions.
The borrower must have good reasons to apply for restructuring. Otherwise, it will not be considered. You will need to attach documents confirming the complex financial condition. For example, dismissal or going on sick leave will need to be proved by an entry in the workbook, a medical certificate, checks for goods purchased at a pharmacy, and so on.
Loan refinancing program
It makes it possible to combine several loans into one and make a smaller payment due to a convenient interest rate and an increase in the repayment period. As a result, the borrower has only one debt, which is much easier and more profitable to pay.
You can implement the refinancing program for bank loans and loans received from a microfinance organization. Moreover, this option can provide an additional amount for current expenses and take the property or car out of collateral for their sale.
To implement the program, you need documents such as:
- Citizen’s passport
- References for all loans
- Certificate 2-NDFL or in the form of a bank (in some instances)
You can apply via the Internet. It is usually considered for several minutes.
If, on your part, there have already been delays with a credit institution, then difficulties may arise when trying to agree on refinancing with it. It may require new guarantees from you, for example, the deposit of property on bail, a surety from a solvent citizen, or others. In addition, strict conditions for the loan may be offered: a high interest rate, the emergence of new clauses on late fees, the signing of an insurance contract, and so on.
Bankruptcy
Bankruptcy of an individual is a legal and working method to get rid of debt quickly. You need to consider it last if you know you will not pay off the loan for three years. If such a decision happens, you need to consult with an experienced lawyer in advance. Bankruptcy is a paid procedure, but anyone who desires to resolve the issue of debts can afford to pay its cost.
This method suits people who do not have property to leverage. It does not include fines, alimony debts, and everything else that is not related to credit organizations. When the client cannot pay the loan, it can be written off. If he has something of value, the bailiff service will have the right to take it away and sell it to pay off the debt. After the property sale, the debtor releases further payment on loans.
The process can take up to 8 months.
The downside of this approach is that a citizen will not get a new loan for five years and engage in entrepreneurial activities after bankruptcy.
The borrower will be considered bankrupt six months after the start of the process, and his debts will be recognized as uncollectible and written off. Such an innovation in the legislation made it possible for poor citizens to free themselves from impossible obligations.
Writing off debt due to the expiration of the statute of limitations
The opportunity to get rid of debts for free from the borrower may appear when he has not made payments for more than three years and the bank did not go to court for collection during this period.
The disadvantage of this method is obvious – you need to stop paying in full and wait for three years from the payment deadline. The write-off is possible only if the bank does not sue during this time but applies later.
The debt will grow faster over the entire default period due to interest and penalties. And the borrower will be disturbed by bank employees and a collection agency.
But if such a rare write-off opportunity nevertheless appeared, then you should take advantage of it and fight for it in court with the help of all the evidence confirming your right. Please note that the credit institution may use tools such as suspending and interrupting the statute of limitations. Therefore, find out by what rules it is calculated.
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