Each borrower may experience a situation where it is not possible to pay debts on loan obligations. In case of a long non-payment, the case may reach the courts. In this case, it is important to maintain composure. If repayment cannot be made for objective reasons, then you should show your best (and not refer to the statute of limitations on the loan, as some unscrupulous debtors do).
When does the bank sue you for not paying the loan?
The bank has several main reasons for applying for non-payment of a loan before the trial:
- The main reason for bringing the case to court proceedings is the reputation of the bank: in this case, the fact of the bank’s claim activity becomes an important aspect;
- there is also a reason at the legislative level – a banking institution cannot simply write off financial losses without receiving a court decision;
- the limitation period for non-payment of the loan is also taken into account – it is three years, after which it will not be possible to demand a return through a court decision.
Usually the bank files a claim for non-payment of a loan in 2-3 months after the delay. During this time, he carries out attempts to contact the client personally. For the borrower, there are options for actions on which you can reissue credit obligations on a voluntary basis. Getting a deferment, credit holidays, restructuring or refinancing – all of these tools can help avoid litigation. For the bank, this opportunity is also more profitable, and if the client provides objective evidence that he cannot pay the loan under current conditions, he can be met.
The decision may also be affected by the length of the delay in payments. More specifically about this issue – here.
Can collectors sue for failure to pay the loan
In some cases, banks are initially set up for confrontation, in which case the trial will be the best outcome for the borrower for the following reasons:
- filing a claim by the bank stops charging the fine and interest on the loan;
- litigation can last a long time, during which the borrower may well improve their financial condition and pay off the debt;
- if the debtor convinces the collegium of its integrity, the case may well turn in his favor.
However, even before litigation, banks often sell debts to collectors, who are often not shy about pressure methods. One of the most frequent threats is criminal punishment by court order. Even if the collectors go to the courts, the maximum that this threatens the debtor is the payment of a certain amount on collection.
A lawsuit is usually initiated by banking institutions, although collectors can do this, they rarely file lawsuits. In most cases, this outcome is more beneficial to the debtor than to them.
The court ruled to recover the debt on the loan what to do next?
It should be understood that the court decision will not cancel the payment of the loan. All that a debtor can count on is to reduce penalties. If a decision was made to recover the loan debt, it will be necessary to repay it in the prescribed manner.
Many wonder how the court collects interest on a loan. It has several main stages:
- decision and notification of all parties to the conflict;
- receipt by the bank of a writ of execution according to which it can initiate the recovery process;
- there is a short period of voluntary execution of the court decision, when the defendant can independently pay the debt;
- if the debtor has a sum of money, it is recovered in the first place, if it is not enough – the penalty is drawn on the debtor’s property.
If a bank is suing for non-payment of a loan, what should be done?
When a notice of a bank claim for non-payment of a loan arrives, the best option would be to ask for the help of a specialist. Providing all the data to a lawyer will help you immediately understand what you can count on.
The advantage for the debtor will be written evidence that he promptly applied for a delay or restructuring and was refused. If the defendant convinces the judicial board that he wants to repay the debt and is looking for a solution for this, they will almost certainly meet him.
Period of limitation on the loan after the court decision
The limitation period for a loan is determined by current legislation in three years. If the bank has not filed a lawsuit during this period, the non-payment recovery through the decision of the courts cannot be carried out.
If the claim is filed, the statute of limitations is reset. Further, the process takes place in the standard manner, and it is worth noting that each officially certified contact of the debtor with the creditor becomes the next starting point for a new three years.
Can collectors sue the debtor after three years
Collectors generally rarely bring the case to court, although they strongly threaten it. But after three years, neither they nor bank employees can demand a return of the debt through a court decision.
In practice, this does not prevent collectors from facing a court decision, hoping for the legal illiteracy of the debtor. The legislation does not prohibit claiming repayment of a loan, but already on a voluntary basis.
Whether the bank filed a court for failure to pay the loan – how to find out
When a bank sues for non-payment of a loan, the debtor receives a notice or notice. It is worth noting that she comes to the address of registration, which is specified in the loan agreement. Therefore, in order to prevent non-attendance, it is necessary to take measures to regularly check mail at this address.
You can also learn about the claim by contacting the creditor directly. A bank employee will provide this information.