Non-bank loans are products that have allowed many people to get out of the financial hole. They are an invaluable support in crisis situations, when to cover the necessary expenses there was no savings, and you can not count on the help of the bank. However, not everyone fulfills the contract concluded with the lender, hoping that the debt will expire . Of course it is possible, but such situations are rare, as creditors watch over timely payments. Before the limitation period , you may have unpleasant consequences for an unpaid loan. See what threatens you for avoiding paying off debts to a non-bank company.
Unpaid debts in a loan company – the first stage
In the absence of timely repayment, the first steps to enforce the debt are taken by the loan company. The lender tries to amicably reach an agreement, trying to find out what is the reason for the lack of payment and, if possible, propose a solution. If this does not help, you have to reckon with sending paid reminders, which additionally increase the debt by additional costs. Among the basic consequences of non-repayment are:
Calculation of additional interest for each day of delay
Charge for sending paid reminders
Fees for sending a request for payment
Costs for steps taken by the lender to enforce the claim
In the absence of the debtor’s reaction to the activities of a non-bank company, more serious consequences are drawn for unpaid debts , which are much more severe.
The next step is to transfer the debt to a debt collection company that has more effective tools to collect its debt. There is a misconception that a debt collector is a synonym for bailiffs. In fact, debt collection is the stage preceding the inclusion of a bailiff and the last moment to pay off the debt amicably. Debt collection companies want to collect the debt, so they try to find a beneficial solution for the debtor so that he can make a payment. It may be a proposal to spread the debt into installments or to postpone repayment in time to give a chance to avoid serious consequences. If such action fails, the case is referred to a bailiff.
Bailiff for outstanding loans
The last stage of debt recovery is the initiation of bailiff proceedings. At this point, the situation is already serious, because the case in court for unpaid credit can lead to the seizure of property. With the issuing of the order for payment , the bailiff can start actions to enforce the debt. The bailiff for unpaid loans has the right to enter a bank account, take over home appliances, and in serious situations, even take over the property to pay off debts. At this stage, you can still try to get along with the bailiff and settle the matter amicably, but you must also take into account the possibility of seizure of property.
Unpaid loan and the police
In addition to debt collection, many people are afraid of a policeman’s visit for an unpaid loan. No legal provision regulates the possibility of calling the police to a person who is evading debt. However, this can be interpreted in various ways, as the police may be involved when the loan was taken out as a result of extortion or fraud. Then it is a crime that gives rise to police intervention. Many also wonder if you can go to jail for payday loans . This is the same situation and there is no risk of imprisonment for an outstanding loan. However, it should be remembered that situations resulting from indebtedness may result in a prison sentence. These include:
Sale of assets seized by the bailiff
Fraud about taking loans for your data
Evasion of court judgment
Borrowing with the intention of not repaying them
These cases are punishable by restriction or imprisonment, so it can be considered that in some situations, non-payment of debts is a direct reason for initiating criminal proceedings.
Unpaid loans and taxes
Business people often wonder if they can include a loan in tax deductible costs. It is not possible to add installments and the amount of the entire commitment, but only includes interest. However, when it comes to unpaid loans and earning income , interest can only be charged to costs once the liability has been repaid. It is worth mentioning that non-bank loans can be taken by both entrepreneurs and physical entities, and in both cases interest paid can be added to costs. It is necessary to document expenses to show that the funds obtained from the loan were allocated to the development of the enterprise.
How to avoid the consequences of defaulting on a loan?
Instead of being exposed to severe consequences, you should first take care of your interests. First of all, when applying for a non-bank loan, you should carefully analyze your financial situation and take it into account when determining the amount of the grant. Installment loans are also worth considering, as they represent less of a burden on the budget and allow for gradual repayment of the debt. If the payment date is approaching and it is not possible to settle the payment at that time, please contact your lender. He may suggest different solutions, such as:
Extension of the repayment deadline
Negotiating repayment terms
Loan companies want the client to pay his debt and resorting to debt recovery is a last resort. Therefore, instead of avoiding repayment and counting on limitation , a better solution is to settle the matter amicably. An unpaid loan may not only lead to negative entries in BIK and a decrease in creditworthiness, but even to the seizure of assets by a bailiff. It is good to avoid such situations and try to reach an agreement with the lender.