When hiring a personal loan, as a general rule, you are sure that you can face the debt month by month. But sometimes, unexpected situations are experienced such as a dismissal or perhaps the illness of a family member, which makes it impossible to meet the budgets that were planned.
When this happens it is not necessary that I live startled, avoiding picking up the phone for fear of recoveries or ‘like the ostrich’, with the head buried to try to escape from the problems.
What does it mean to be a loan holder?
There are solutions in case you cannot pay a debt but it is important to know, before hiring a personal loan, what it means to be the owner of one.
To begin with, we must know that the loans have a personal guarantee, that is, when we take out a loan, we offer as collateral all present and future assets. That is why, faced with a prolonged non-payment situation, a judge, at the request of the financial or credit institution, can give a ruling that our assets be seized.
In addition, if someone has endorsed the loan, the person who has done so will also have to take over the debt, since the guarantor accepts in solidarity to take over the repayment of the loan, so if we can no longer pay the installments and we do not have sizeable assets or these are insufficient, the guarantor has the obligation to pay the debt and if necessary it can also be ruled that they seize his assets.
You are already delinquent
On the other hand, when a debt is not paid, it is registered in a file of defaulters, very consulted by financial and credit institutions when granting a loan, which will practically make it impossible to access a financing in the future. To stop appearing in the file of defaulters will be first to cancel the debt and ask the entity to make us a certificate as we have paid, and then send it to the file of defaulters in which we were discharged to be erased.
Another important fact to know is that from the first installment that the entity is not paid, it will charge interest for late payment, normally much higher than ordinary interest, as well as charging a commission for claiming payments or unpaid installments. Both interests accumulate to the original debt which will cause that in the long term more money has to be paid.
These are priority expenses
So, we see how the non-payment of a loan can lead to serious problems, so it is important that in the planning of monthly expenses, the payment of debts is a priority to other expenses. In the face of an economic problem, we should never think about the non-payment of a debt as a solution, since in the future it will bring us not only major economic problems but also severe headaches.
And if for any reason we cannot pay the loan installments, before the installment expires, the most advisable thing is that, without fear or shame (most people, at some point of life, we go through difficult economic situations) , we go to our entity to explain our case.
It can be declared insolvent
The only other possible alternative to deal with the non-payment of a debt is to declare it insolvent. Thing that from the modification of the bad credit payday loans and Bankruptcy law can make the physical persons, in a process very similar to the one of the legal persons. A creditors’ meeting must be held, whereby the lawsuits filed for non-payment are paralyzed and the possibility of foreclosure is frozen until the process is completed.