You have a termination notice in your hand and you have a car breakdown, so you have up to the expense. In addition, you do not have the funds to repay the loan. Your heart is pounding and rotating after every sound… doesn’t the steps in the hall signify the bailiff’s arrival?
Although the inability to repay a loan is certainly a mentally demanding situation, it is not always a cause for panic. What to do in this case?
Inform your bank
Playing a dead beetle does not solve anything in this case. It is important to pick up the phone and inform the bank immediately that you have lost income and are insolvent. A banking institution is not a merciless monster, but a firm acting in a sensible way. For your sincerity you get extra points and a head start in solving the problem.
Your bank or credit firm is likely to propose postponement of installments for 3-6 months. This is the optimal time to compare your financial situation and find a new job. However, postponing installments usually does not mean total pause in payment. Mostly in this range you pay at least interest.
You can also find out by calling your bank that your loan may be in a position to do so. Some banks provide loans that can be interrupted or reduced without significant penalties.
If you have multiple loans, consolidation is the preferred solution. It is a merger of all loans into one, so you get a clearer repayment. Sometimes consolidation will bring you a longer repayment period and hence lower monthly installments that you can easily tighten.
While looking for a job, try increasing your savings by selling things for example. Of course, we do not mean that you sell a refrigerator, a washing machine and a stove, but rather items that you no longer use and are unnecessary for you.
It is also useful to secure your income while looking for a job. It is possible that you will come across a dream job in a few months. Therefore, use the free time between finding a job for any part-time jobs. For example, if you always go to job interviews in the morning, you can take part in the afternoon and weekends for part-time jobs. It is important not to let yourself be exhausted even more during the period of unemployment, but to try to monetize your free time.
What if postponing installments doesn’t help?
If your financial situation does not improve over time, the bank or credit firm will usually refer the case to the enforcement firm. It will start calling or informing you by e-mail to start repaying. In this case, it is also necessary not to ignore the calls and to reasonably agree with the enforcement company. Often, these companies try to meet the debtor and ask him to pay at least according to his possibilities. In practice, you may find that the recovery company suggests to the client to pay at least three hundred a week.
This cooperation is important not to fall into a distraint. By working with this enforcement company you can get some extra time. When the company hands over the case to the bank or credit firm again, it shares information on how to deal with the debt. If you did not respond to calls and calls, it will give the case straight to execution. If you have been demonstrably trying to reach a compromise, the bank will probably allow you to create a repayment schedule, ie spreading the debt into several smaller parts.
If the previous options fail, the lender will bring the case to court, which is followed very quickly by the execution. In this case, the bailiff may come to your home and confiscate your property.
Although the last option is not very joyful, the good news is that it will not happen immediately after payment of the installment. By early communication, you can prevent execution and get more time to settle your financial carnels.