Insolvency, or insolvency, is a state of affairs that has been getting more and more in recent years (mainly because of seizures). If you are among those who got into insolvency, respectively. going through a process of debt relief (personal bankruptcy), we have some advice on what to do in such a situation.
Further insolvency loans are a big risk for the borrower
It is clear that personal bankruptcy is not pleasant and the conditions of debt relief are quite harsh – the debtor has only a very small amount each month. However, an insolvency loan is not a very good solution – it can happen that by negotiating it, you will breach the debt relief conditions, which will then be canceled. Thus, insolvency loans cannot be highly recommended, usually not a good solution to the situation.
Getting an insolvency loan is not easy
For quite understandable reasons, individual credit companies do not provide loans to insolvent persons. Obtaining such a loan is so extremely difficult – companies that are willing to lend (even for a small amount) to a person in default is a minimum and often not just serious companies.
Banks do not lend money to insolvent people
At the bank is not worth asking about loans in insolvency. Each bank thoroughly examines the applicant and does not provide loans to people in execution or with a record in the debtors register. With insolvency, no bank has a chance to get a loan.
Even with most non-bank providers, you will fail
Even non-banking companies that otherwise have milder conditions usually do not lend money to insolvent people. Exceptionally, it is possible to get a loan with a record in the debtors register, sometimes with execution, but insolvency is usually an insurmountable obstacle. Only a few providers are willing to lend money, in most cases they are only small amounts.
Some collateral loans may be the solution
If you really need an insolvency loan and you have the option to guarantee it with real estate, for example, this is a possible solution. The loan company will have a loan secured by your property and if you do not repay the loan, you will lose the property. The other option is to borrow money from someone in your family, acquaintances or friends – which is probably the best solution where you can get a loan cheaper and without risking breaching the debt relief conditions.
What do you pay most attention to when looking for an insolvency loan?
Because people in insolvency are often desperate and not very aware of the risks involved in lending, we have selected some of the most common pitfalls to watch out for. This applies most to the insolvency loan, which is difficult to obtain from ordinary providers. So pay special attention to:
- loan offers, where the provider wants to pay a high fee first (perhaps in the order of thousands) – even if he promises to you that you have the loan approved and sure, do not pay anything – very likely it will be fraud
- Loan offers, where the applicant must first call the line with increased tariffs – a minute of the call can cost around 80 USD and a person on the other side of the line deliberately stretches the call as much as possible. The result will be a bill for the phone in the thousands and you will not get any loan anyway.
- advertisements in newspapers, on various notice boards in stores, on billboards, etc., offers with only a phone number or mailing address, offers from companies that do not even have a website – all these offers are suspicious and untrustworthy
- bills of exchange or other loans from a private individual
It is clear that insolvency is not easy, but an insolvency loan is indeed the most extreme and usually not a very good solution. If you do not know what to do, try to contact one of the free financial advisory centers, for example, where they will advise you on the best solution to your financial situation.