Bankruptcy of individuals with a mortgage is a necessary procedure, which is mandatory in the presence of other debts. Often, a borrower resorts to loans from third-party banks to deposit money on a mortgage. But these funds are not always enough to pay off the banks on time. Bankruptcy is the only correct solution.
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If there is a mortgage, insolvency is also recognized when the bank does not write off the remaining debt. Banks are in no hurry to write off the balance. Cases reach the Supreme Courts and are considered there for years. In six months, you can solve the problem, you just need to start the procedure for declaring yourself bankrupt.
If 40-50% mortgages are paid off, then you can bail out the real value of the apartment. In this case, there is a chance to return the debts to the bank and stay with some amount from the sale of housing on hand.
What are the advantages for the borrower in case of declaring him bankrupt with a mortgage loan:
- Property (living space) is sold at market value, and is not transferred to the creditor in full for use. When the mortgage bankruptcy law comes into force, the bank no longer has the right to take away the property as a repayment of the debt.
- The sale of living space is carried out openly with the help of auctions. The participant who named the maximum price will be the buyer. The arbitration manager receives remuneration - 2% from the value of the property sold.
- Article 61 of the Law on Mortgage states that the lender ceases to demand payment of the mortgage from the borrower after the transfer of property to the bank or its sale. It also applies to cases where part of the mortgage remains unpaid.
The possibilities of the situation
Bankruptcy in the presence of a mortgage can develop in two ways:
What gives the borrower
As a rule, after the sale of property, the funds are used to pay off fines, penalties and other sanctions. It is also possible to transfer the balance after paying off debts to the account of the former borrower.
But sometimes, after the sale of real estate, there is still not enough money to pay off the debt. This fact should not worry the borrower, now it is a serious problem that a credit institution or a developer is working with.
There are also pitfalls in the bankruptcy process. The bank itself, after three months of mortgage debt, can apply to the court to declare the borrower bankrupt.
An individual has the right to challenge this decision. To do this, it is enough to present evidence of your solvency to the court and good reasons why the payment was suspended for 3 months. Contesting a mortgage payment often results in a judge offering to refinance the loan. That is, to provide an installment plan to pay off the debt.
There is a downside to the recognition of the bankruptcy of an individual.
These are such significant shortcomings as:
- must participate in the process. He is appointed by the court. But it is up to the individual to pay for his services. This is done twice: before and after declaring an individual bankrupt. The manager is not always satisfied 2% from the sale of real estate and 10 thousand rubles.
- The psychological background is that a healthy and adult person recognizes himself as insolvent. This fact will not be missed by other financial institutions when it comes to issuing a loan. Many public services will not be hired with such a judicial history.
Therefore, many individuals are in no hurry to declare themselves bankrupt and are looking for other ways out of the mortgage hole. But if there is no opportunity to pay, then the only right decision is to declare bankruptcy. We must seize the opportunity as long as it allows.
Ways to solve the problem
If it is not possible to pay the mortgage debt within the timeframe set by the bank, then you need to use one of the following solutions:
| Agreement with a bank without involving a court | Protracted proceedings and the cost of lawyers are not beneficial to either the borrower or the credit institution. Therefore, most often the bank makes concessions to an individual. For a peace agreement, it is enough to visit the creditor and explain to him the delay in payments and name the expected date for the receipt of funds. |
| Registration of bankruptcy with an appeal to the guardianship authorities | If minors are registered on the premises. This guarantees the preservation of the apartment for a period until the children come of age. |
| Sale of real estate before the court decision | The advantage of this method is that you can sell a house or apartment at a better price, pay off the debt and leave the difference in cash in your account. A deal on an apartment with a surcharge will also help. These funds can be used to pay off obligations to the creditor and at the same time remain with a roof over your head. |
Payment actions
After an individual has been declared bankrupt by a court order, his rights to property and payments are made only through a financial manager. On behalf of a bankrupt, he opens and closes accounts, manages funds on bank cards, and participates in voting in joint-stock companies.
A bankrupt individual is not entitled to the above actions. He is obliged to hand over all his accounts to the manager. The latter deals with the valuation of property and its. Luxury goods, real estate put up for auction.
After all debts to banks are repaid, the financial manager prepares a report to the court on transactions and settlements. Based on this paper, a verdict is put forward, which states that the lender is released from further obligations to borrowers.
How to survive mortgage bankruptcy
In times of crisis, you have to be more careful about spending money. Mortgage borrowers have the hardest time. If one payment is late, penalties and fines appear. They, in turn, grow rapidly over time. How can the new amendments to the bankruptcy law help?
Position of the law
In October 2019, important changes to the bankruptcy law were signed.
The main thesis that follows from this document can be formulated as follows: After an individual is declared bankrupt and after the completion of the bankruptcy process, all obligations for unpaid debts are removed from him.
Only the court decides whether it is possible to start. Not every individual can use this solution, but only those whose debt to creditors is more than 500 thousand rubles.
The borrower provides the court with the following data and:
- a list with the listed debts and the amount;
- certificates of their income and contributions;
- document confirming the payment of taxes for the last 3 years;
- report within three years on monetary transactions exceeding in amount 300 thousand rubles.
After a person is declared bankrupt, the property is sold, and the funds are used to pay off debts. The bailiffs will take everything as repayment except for the essentials.
If real estate is a pledge, then it is sold even if it is the only place of residence. Otherwise, if the apartment is not a mortgage, then they do not have the right to take it away.
Only the court declares a person bankrupt. In the process, you can prove that there is a constant source of income.
In this case it is suggested:
- installments for a maximum of three years;
- refinancing.
After the sale of the property and repayment of debts, the rest is returned. If the proceeds are not enough, then the individual is still declared bankrupt and exempted from payment.
The financial manager is appointed by the court. His services are paid by a bankrupt person. A fixed amount is paid before the process, after the percentage of the sale.
It is impossible to declare an individual bankrupt only before one creditor, and leave it financially sound before another, because bankruptcy implies insolvency before all financial organizations
Penalties
The lender, after several months of non-payment of the mortgage, has the right to demand early repayment in full. Otherwise, he goes to court.
Mortgage housing is collateral, and the rules about the only housing and the illegality of eviction from it do not apply.
The plaintiff submits to the court data on the appraisal of the apartment. This amount is the basis for determining the price at the auction. If we refer to the Mortgage Law (), the initial value of real estate is 80% of its market price.
After the sale and repayment of the debt, the difference in money is returned to the borrower. If there is not enough money to repay the loan, then the amount is collected from the salary.
The borrower should not wait for the bank to sue. Especially if the price of real estate in a mortgage already exceeds the debt, and there will no longer be an opportunity to pay installments every month. It is better to contact the bank yourself and ask for permission to sell real estate.
Conclusion about housing
While the trial lasts, the status of the borrower's housing will remain the same. Until the arbitration decides to declare the individual bankrupt or appoints to pay the mortgage in installments, there should be no penalties.
If the court decides on restructuring, then the accrual of penalties, fines and any interest for delay is suspended. Only current payments remain. Spread the amount of debt can for 3 years.
What happens to housing if the failed owner is declared bankrupt? Bidding is scheduled during which housing is sold, even if this is the only place where the borrower lives.
Real estate in some cases can be returned to an individual if:
- the auction was unsuccessful;
- the bank decided not to accept an apartment, a house in repayment of debts.
After the sale of real estate, a credit institution claims to 80% from the cost, the remaining funds are used to pay off other obligations, including the conduct of the bankruptcy procedure itself.
Possible consequences
Borrowers do not always know their rights, and do not realize all the risks when buying a home with a mortgage and declaring themselves bankrupt. Many people blithely believe that the bank will not be able to take away a single apartment. What are the consequences of mortgages and how banks take advantage of the difficult situation of the borrower.
The concept of "single housing" does not apply to an apartment, a house or other real estate - this is the first thing you need to know about a mortgage. Even if housing is partially purchased with maternity capital and children are registered there, the guardianship authorities have the right to suspend the auction up to the age of 18 for children.
Bankruptcy of individuals is not the best scenario, because you will have to say goodbye to the apartment. Since October 2019, the mortgage has ceased to be a hindrance or difficulty for the insolvency procedure of a person.
Practice shows that the most difficult thing to do when collecting documents may be taking a certificate from the bank on the amount of debt. Many banks are deliberately in no hurry to issue such information. Many refuse extradition, which violates the law. Others set a high fee for such a certificate.
In addition, when filing an application, you must pay a fee to the court - 6 thousand rubles. Copies of applications are sent to all available creditors. In this case, postal receipts are proof of sending. They must also be submitted to the court.
