Consequences of Unpaid Loans: What Happens to Insolvent Debtors
Unpaid financing what happens to the owner
The economic uncertainty of these years leads more and more people to have problems with consumer credit. Unpaid loans are therefore a reality not to be overlooked and which does not always depend on the amount of the amount requested.
If you intend to apply for a loan or a small loan it is therefore good to understand what happens to those who are unable to pay the installments. In fact, the consequences can be more or less serious depending on the type of insolvency.
When it comes to unpaid loans, it is necessary to clarify that banks and financial companies have different tolerance levels and timing. In fact, banks usually wait longer before they start sending reminders or carrying out other actions. On average, banks await the non-payment of at least three installments, that is 90 days from the first default.
Financials, on the other hand, tend to be more severe. As a rule, the procedure for returning the money granted is activated after the second unpaid installment. In any case, we speak of non-payment only on condition that at least 45 days have passed since the deadline set for the payment of the installment. This is because it is possible that there are problems with the systems and with the notifications of the lenders.
Unpaid financing consequences and interest
Let us now begin to go into detail on the consequences of unpaid loans.
Considering that already after an installment one is classified as defaulting, it should be specified that, in general, the first step involves a reminder of the payment by the entity that provided the loan.
If this is ignored, the next step is to enroll in Crif as bad payers. This can lead to major difficulties in accessing credit, unless one relies on the transfer of the fifth or loans changed, for many the last resort to obtain sums of money.
Another thing you need to know when discussing unpaid loans is the presence of default interest, which is charged by the credit institution on the amount that the customer has in debt.
This means that those who cannot pay one or more installments of the loan will have to repay not only the initial debt, but also the amount charged as interest.
Debt collection method
In the face of unpaid loans, financial companies and lenders can behave differently depending on the policies. There are those who decide to proceed independently and those who, instead, opt for the use of special debt collection companies.
In many cases, these groups endeavor to recover the unpaid and the related default interest by intervening with methods such as the attachment of the fifth of the debtor’s salary.
Foreclosure of the fifth of the salary
The foreclosure of the fifth of the salary is one of the most used methods by credit companies that need to solve problems related to unpaid loans.
How does it happen? In an extremely simple way, i.e. with the reality that has disbursed the loan – or with the debt collection company to which the unresolved resolution work was contracted – which withholds the fifth part of the paycheck received by the defaulting party directly from the source.
To avoid such problems, credit institutions tend to protect themselves with employment risk insurance contracts.
In such situations, when the debtor’s financial position becomes particularly critical, it proceeds with reference to the TFR. Treatment that is restricted and therefore not available to the worker who has applied for a loan and is going through a time of economic difficulty.
When there is a prescription for funding
If the intervention of the debt collection company is ineffective, that the bank can not recover the loan, credit is prescribed. In other words, the loan is no longer recoverable. The time limits for the prescription of debts vary from case to case, but in most cases the time limit is set at five or ten years.
If we talk about debts deriving from the stipulation of loans, mortgages or loans, the limitation period is set at 10 years. This also applies to the loans granted by INPS to public employees and pensioners. The social security institution therefore reserves the right to recover the sum granted within ten years. Period that usually proves sufficient for debt collection purposes.