Many debtors successfully wipe out loans, microloans, debt on debit cards, consumer loans, and other financial obligations using the bankruptcy procedure for an individual. However, this procedure is not suitable for everyone. Fail Gabbasov, the head of the TrustFinance company, a lawyer to resolve problems with credit history, told socialbites.ca about this.
“For example, bankruptcy may not be sought if a citizen’s official income is quite high or he owns real estate, cars and other assets that he is not prepared to lose. And someone, for example, is trying to occupy a certain position that is incompatible with bankruptcy, plans to travel abroad frequently, wants to apply for a new loan in the near future, or does not want to spoil his reputation as a result of not a very pleasant financial procedure. There are certain categories of people who will be denied bankruptcy. “These include, for example, people who have a valid criminal record in the economic field, who resort to various fraudulent schemes for personal enrichment and/or obtaining loans, or who have already undergone bankruptcy or debt restructuring within the last 5 years,” he explained.
There are not many alternatives to BFL in Russia, but they still exist.
“The first option is to refinance or pay off the existing debt in full. However, if the person has old debts, they are often sold to collection firms, sometimes even transferred from collectors to collectors. Therefore, financial liabilities are increasing and getting out of the debt hole becomes more difficult every day,” he said.
The second and more common option is to purchase the debt at a significant discount, either directly or through a third party or legal entity.
“It looks like this: a person has debts that are sold to collectors (as a rule, these are debts older than one year), and a collection company – for example, a banking organization – buys the right to demand, but not for 100% from the amount of the debt. For example, a person has a debt of 100 thousand rubles. A collection company buys this debt along with some other debts in a large “package” and the total package costs several million but at the same time the company buys a debt on average for a maximum of 100 thousand. 3-5 thousand rubles. Then the person turns to this organization and tries to reach an agreement with it. Formally, this would resemble a pretrial settlement agreement: A person contacts the banking institution to which he or she currently owes money and negotiates a discount with it. On average, you can get a 50% discount on debts older than one year. However, we need to take into account that collectors who borrow at 3-5 percent also receive their own interest. In this way they can “accelerate” the debt, for example, up to 300 thousand, that is, the sooner you enter into negotiations, the more successful they can be,” the lawyer added.
You can negotiate a discount independently or with the participation of intermediaries (friends, relatives or a third legal entity). Debt repayment usually takes from a few weeks to a few months. But most importantly, it is a completely open, transparent and safe process, just like bankruptcy. The expert concluded that all debts paid by the person will appear in his credit history as fully paid, so he can freely use credit products in the future.
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