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Sometimes users of financial products are not aware of the consequences that can result from not returning a loan or loan in the appropriate time. Unaware of the increases in fees, management costs or even legal procedures.

List of consequences for not returning a debt:

1 – Increase in the amount of money owed.

Some users of personal loans or consumer credit, they think that only increases the debt, depending on the interest they have with the loan, however this does not work well. Since this is added management costs, much higher fees and all kinds of expenses, as consequences of not fulfilling the contract with which the consumer, is supposed to agree and committed to comply. In the financial contracts, this type of added costs are indicated very well, it is possible to find the conditions of the service or in the FAQ , frequently asked questions.

2 – Bad image in your company – You can call work.

Having a bad image in a company, can generate distrust of your coworkers and also senior officials. It is possible that the companies to which you owe money, after ignoring their calls or not returning the fees, have to try to contact in other ways such as calling the work . Most times when requesting a loan, a payroll is delivered. Thanks to this information, the financing company has the easiest contact with your company. However, they can also garnish the payroll, without knowing the company in which you work, but for that it is necessary before a legal procedure.

3 – You can garnish the payroll.

As we have said before, you can be garnished a part of the payroll. They can not garnish the payroll in full, since there are laws that have been made to protect the consumer. Likewise, a payroll embargo is still something negative that harms the domestic economy or the family economy. It is also something negative regarding the previous point, since you are giving a very bad image in the company. Who would amount to someone who owes money to a fast-loans lender or to a bank?

Many people who have a lot of debt, end up working in black. Which can be negative in the case of fines in labor inspections, less contributions for retirement or suffer accidents at work, which are not covered by anyone.

4 – Suffer an asset embargo.

You can also remove high value goods depending on the type of loan that has been requested or the judicial procedure. An example would be, when applying for a mortgage loan. When applying for a mortgage loan, the guarantee of a home is placed. Many people have applied for loans that were believed to be personal, giving information from the deeds of their homes , when in fact they were applying for a mortgage and by not returning the money, they have lost their home. Is it really worth losing a house for wanting to buy a new car or a house with a cost that can not really be met?

Divorced parents who are heavily indebted and do not pay their child’s pension may also be subject to a payroll or property embargo in order to pay for family support .

5 – Management fees and fees.

That increase the debt more.

6 – That your family suffer because of you.

If for example you have family responsibilities, such as children and you can not afford the cost of their care, because you have debts that have increased by not paying, is something that affects their lives, such as their academic training or to your emotional state. Having debts can also cause breakup of a couple , especially if these debts have been made because of vices, parties or other expenses are not important and that nobody has to support for you . If you have a family and have debts, they are creating a bad economic situation and a bad living in their lives . Also legal problems in the case of not paying the basic expenses of the children.

7 – Not being able to access other financial services or fees – List of Defaulters

Since figures in the list of defaulters to have a debt that has not been fulfilled, it is possible that some banks or financial companies do not want to give you a loan, especially if it is due to a default. The greater the debt or the amount of the installments, the lower the chances of accessing a loan or a credit card.

  1. Not have a credit card . Something very uncomfortable if you are already used to it.
  2. Not having access to some telephone company promotions and contracts.
  3. Not having access to monthly fees such as cable television or any monthly service that bothers to verify the solvency of its customers .
  4. Not being able to take advantage of the 0% financing of some shopping centers or brands.

If it is a debt that you did not repay when it was owed and you are on the list of defaulters, there are also non-financial companies that deny services, such as television with monthly installments or contracts with telephone companies. It is very important to emphasize that everything depends on the amount owed, the true cause of being in default and the economic capacity of the consumer.

8 – Having a bad history in the future.

Banks have access to a consumer’s credit history, since when requesting a financial service, firms form part of a database. If you have a negative history, it can be a consequence of not being able to apply for a mortgage in the future or enjoy the advantages of having a credit card . It is not coherent, not being able to request a mortgage for the purchase of a home or a more important expense, for a debt of a small credit or a card.

9 – Go to lawsuits and legal expenses.

The legal expenses are caused when the company to which you owe money, forces you to go to a trial. Going to a trial can cause very large expenses, even thousands of euros, for example, expenses in lawyers, counseling, costs of trials etc … Depending on the amount that is due, will go to a certain type of trial.

What type of judgment is made for a debt?

  • Verbal judgment: when the debt is less than € 6,000
  • Ordinary trial : when the debt exceeds € 5,999
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10 – Frac collector.

It is not something that financial companies do on a regular basis, as this borders on the legal limit . Do not rule out making you look ridiculous in a very important event, if for example you work in the business world or you are in a meeting / work event, making new professional contacts.

There are also other dangers much greater than the previous ones, when dealing with lenders who work in a particular way. Some lenders of the game world, the night or doubtful businesses, hire thugs who are responsible for threatening or even assaulting people who do not comply with what they agreed . There are also usurious lenders, who blackmail their clients, when they take a long time and force them to return debts could be considered as usury, to increase them as much as extortion, when they use violence / threats as a way to expedite a collection.

What are the ways to avoid a debt or reduce it legally?

There are some ways to avoid debts, return them in a more comfortable way and even reduce them. Below are some legal forms that work in Spain. Here are some :

  • Have a minimum or reduced salary: in Spain there is a law that says you can not garnish a payroll if it is very small or can only garnish the payroll in a certain percentage. This law has been made to protect consumers from debt and they can continue to pay for very basic things such as food, electricity or rent.
  • Report the debt as usury, thanks to a lawyer : in Spain there are also laws against usury. With a good lawyer and with enough evidence, such as to qualify a usury debt, this can be reduced or even canceled. Canceling debts through a trial is usually not very common, however you can also reach better negotiations.
  • Unify the debt through another loan : this is not available to everyone and is only available to those who have much more favorable conditions in their domestic economy, such as those who enjoy a steady job or permanent help. Through the unification of debts, a user can return the debts with a large loan, so that they do not increase so considerably and also have the convenience of having only one fee, instead of different fees and ways to deposit the money in the creditors .
  • We recommend : compare financial companies and their opinions .
  • Leave Spain: so that you find a job, save enough and you can return with the money to repay the debt. It is something that not everyone can afford, only people without burdens or with a cold enough mind, to leave everything behind. It is important to go to all the judicial processes that the debt could generate.

Are banks obliged to negotiate a debt?

Thanks to the Second Chance Act, debtors have the opportunity to make their debt more comfortable, also thanks to other regulations that banks have, when they try to negotiate debts. These types of laws are not applicable to all types of debts and certain characteristics and requirements must be met.

Hire a lawyer to negotiate a debt.

When dealing with someone with debts, the most normal thing is that they do not have money to pay a lawyer. However, there are economic lawyers and also cases in which the debt is so large that it is also advisable. There are lawyers and companies specialized in negotiating debts and even getting, negotiations that perhaps without the help of them, could not be acquired .

When is a loan in Spain?

In Spain to qualify a debt as usury, it is necessary that some point that we will indicate below be fulfilled and also depend a lot on the interpretation of the judge .

  • Average interest of the loans : when in the similar financial products, the average interests are lower and this duplicates them, it is very probable that this debt can be considered as usury. Also to take advantage of desperate situations or mental problems / deficiencies of the applicant, in order to sign a usurer contract.
  • The Law of usury of 1908 : is the one that is used at present. It is true that this is a very old law and that possibly some financial products are not compatible with this law, so that they are interpreted in another way.
  • Read the full usury law : Law of July 23, 1908, of Usura (Legal News)
  • Take advantage of the consumer : it could also be considered as usury, when the lender takes advantage to make oral contracts that are not indicated in the signed contract, such as demanding larger amounts that do not appear legally or dates that either.

Just by opening the previous link, we can see how in the first paragraph it indicates as one of the most important characteristics, the comparison of interests, compared to other financial entities or similar services.

What happens if I can prove that the debt I owe is usury?

A loan can be canceled when it is considered usury. So that the person who owes the money would win. It is not easy to prove.

Interesting fact : in some countries the usury is considered, like any loan that has a certain interest, in Saudi Arabia, it continues being this way – From when the money exists .

When is a loan pool necessary?

A group of loans or unification, is necessary when the financier or lender to whom we owe money, is causing that debt to have an excessive increase. So that a unification can only add some extra costs to the debt, which are not as high, as the growth of the previous debt, as time passes and the defaults continue . As we have said before, not everyone is lucky to achieve a unification, before it is important to get an indefinite contract, something very difficult in the current times, especially in some autonomous communities where unemployment is very large.

Beware of groupings of credits.

Some companies that advertise themselves as debt consolidators are really just companies that charge a financial advisory study . This can make you “get” the money for an advice and finally not get a debt pool. It is important to seek opinions and read well the services that are advertised.

Habits that make you return a loan.

  • Reach a negotiation instead of not responding to calls . There are people who ignore the calls of the collectors, when in reality, many times what they seek is to negotiate a debt, so that it becomes a more satisfied client that does not soil the reputation of the financial or banking entity.
  • Do not ignore small debts . Some people have very small debts in financial companies like Cofidis or Cetelem . While they continue with their vices, buying tobacco daily, alcohol, traveling etc … Sometimes for debts of € 100 or € 300 that could solve quitting smoking or leaving other vices and that end up in much more negative situations, paying more fees and receiving legal notifications.
  • Habits of saving in the family economy . Such as buying an inexpensive shopping basket, once a week or even once a month. With cheap products. It is better to make a small effort in a present than to have an increased debt in the future.
  • You have to see: How to save money in a short time? A list of cheap supermarket foods with which to live healthily and how to save on fuel.

Conclusion:

Not returning a debt has very serious consequences and in the best of cases, this can be considered as usury, something that is rarely possible and that can lead to very expensive legal expenses. When you have an outstanding debt, it is best to return it as soon as possible and not delay it.