Bank and MFI litigation: is it worth litigating?
Disputes with banks and MFIs
The relevance of litigation with a bank or MFO is situational. Let's see why. If you need advice on a credit dispute, you can make an appointment with the lawyers of Novakovska & Partners JSC by calling 067 504 42 82.
1. When a creditor goes to court for his debt
2. When a borrower goes to court for justice
3. How likely are disputes with a bank and an MFI to end without a trial?
4. Help of a lawyer in banking disputes
1. When a creditor goes to court for your debt
According to the current legislation, the creditor has the right to go to court and start a banking dispute from the moment the debtor ceases to fulfill his obligations. If you thought about the fact that there are different things to have and use this right, then you are right.
As practice shows, the period of the creditor's appeal to the court from the moment of delay on the loan is different. It mainly depends on:
- the legal entity of the creditor;
- type of loan (bank card, mortgage);
- the goals pursued by the lender;
- the amount of debt;
- actions of the debtor.
The legal entity of the creditor has significant weight. Indeed, sometimes the creditor specifically issues such loans that in fact the debtor cannot be repaid and it is more profitable for him to collect a large penalty (fine, penalty) and other payments stipulated by the contract. Such lenders are usually considered MFOs, where every day for delinquency they account for 4% of the amount of debt, and this is from 1400% per year.
On average, if the amount of debt is from 5,000 to 100,000 hryvnia, then the creditor in 80% of cases does not go to court. He goes for the executive notary's inscription. If the amount of the debt is from UAH 100,000, then the bank or MFO goes to court with a higher probability than mentioned (90-100%).
If the debtor pays 1000-2000 hryvnia, then it is beneficial for the creditor that the borrower pays this money rather than he did not pay at all. Also, as practice shows, such debtors pay for a very long time, and all the time they cannot reach the body due to the fact that they are constantly paying off fines. Therefore, the creditor does not sue them, as he understands that the debt will be more and more.
2. When the borrower goes to court for justice
In practice, banks and MFIs are less likely to initiate litigation. As a rule, most of them go to a notary for a writ of execution, which in turn allows them to more quickly enforce debt collection or foreclosure on the subject of a mortgage.
In my law practice, there have already been more than ten cases when it was necessary to cancel the notary's signature to collect UAH 5,000 from the debtor. As a rule, debtors in such situations simply refused to appeal against it in court on the grounds that the price of a lawyer's services costs almost as much as the debtor owes.
Therefore, having learned about the notary's inscription, the debtor decides to go to court and start proceedings or accept everything as it is (arrests, evictions, and the like until the debt is paid off).
In practice, my clients often decided to cancel this document with a debt of 20,000 hryvnias or more.
3. What is the likelihood of disputes with the bank and MFIs can end without a trial?
In my practice, there are different cases. Usually, in 70% of cases, the creditor goes to negotiations and reduces the amount of debt to an adequate level, and sometimes even more. The other 30% bring one of the parties to trial.
It is best to start negotiations with a lender (bank, MFI) with an official appeal. Communication with the operator of a legal entity (lender) in 95% of cases will not lead to the desired result. This is due to the fact that the bosses of the call center tell their bank employees that there are no indulgences and the like. The main motivation of these people is the factor that their salary depends on your payment - they sit on their % of the debt paid by the debtor.
The main bosses of the creditor do not even know about the affairs of their subordinates. When making a written appeal, your message reaches a more competent employee and, as a rule, he collects many similar appeals to submit them to the company's finance committee, where they consider the possibility of giving you a discount on debt repayment.
4. Help of a lawyer in banking disputes
In "Novakovska and partners" there is a lawyer in the direction of which banking and MFO disputes. Therefore, if you need legal assistance or advice, you can contact us by phone 067 504 42 82.
The assistance of a lawyer includes:
- legal consultation;
- analysis of the case for risks and prospects;
- appeals to the creditor with a request to reduce the debt;
- going to court for protection against notary's inscription and arrests;
- participation in court proceedings;
- other necessary actions to provide you with the most effective legal assistance.
The author of the article is attorney Yanchuk Anatoly Anatolyevich. You can find out more detailed information about the author by clicking on link.