The bank or MFI sued for non-payment of the loan – what to do

Defaulting on a loan is a common problem faced by many borrowers in difficult financial circumstances. If a bank or microfinance organization (MFI) is sued for default, it can be a serious ordeal. However, there are certain steps you must take to protect your rights and interests in a lawsuit.

First of all, it is important not to ignore the message from the creditor and not to avoid contact with him. Instead, try to reach an agreement on debt restructuring or alternative repayment options.

If it is not possible to reach an agreement and the case is referred to the court, the borrower must carefully study all the nuances of the process and prepare a reasoned position for his defense.

Risks of mortgage lending

A mortgage loan is a difficult type of lending for the borrower, as the collateral is housing. If the bank files a lawsuit due to the inability to pay the mortgage, there is a real threat of losing the apartment or house.

Collection of evidence base

In such situations, first of all, it is necessary to collect the maximum amount of documents that confirm the difficult financial situation of the debtor. It is important to provide the court with evidence that the delay in payments was not due to one's own fault, but as a result of force majeure circumstances - dismissal from work, loss of breadwinner, emergency situation or illness.

Fines

Ignoring debt obligations to a bank or other financial institution can lead to serious negative consequences for the debtor. First, fines and penalties are charged in accordance with the terms of the credit agreement.

However, if the debtor continues to be unresponsive, the creditor may apply to the court for enforcement of the debt. Often, banks also transfer the case to collection agencies that use stricter work methods.

Arrest and confiscation of property

The next step may be the seizure of the debtor's property, which will make any transactions with him impossible until the debt is settled in full. And in the last resort, confiscation of both movable and immovable property with the aim of selling it to repay the debt.

Possibility of defense in court

If the bank or MFI decided to take the case of non-repayment of the loan to court, the debtor has the opportunity to properly defend his rights. First of all, it is necessary to carefully collect all available documents that can directly or indirectly testify to illegal or illegal actions of the financial institution - violation of the terms of the contract, incorrect calculation of interest, etc.

Also, one of the first steps when a bank or MFI submits an application to the court may be a request for debt restructuring or extension of repayment terms.

Get professional help

If you are faced with debt problems and do not know how to proceed properly, contact the law firm "Prykhodko and Partners". The company's lawyers are well versed in this area and:

1. They will provide you with a consultation and develop a strategy for protecting your rights.
2. They will help to collect the necessary documents and evidence in your favor.
3. They will try to reach an amicable agreement with the creditor through negotiations.
4. If necessary, they will represent your interests in court.
5. If necessary, they will appeal against an unfavorable decision in the appellate or cassation instances.

Thanks to the experience and professionalism of "Prykhodko and Partners" lawyers, you will receive qualified assistance at all stages of resolving the debt situation.