Anyone can find themselves in a difficult life situation. Everything around is becoming more expensive, and wages are growing too slowly or even not growing at all. It’s even worse if the salary disappears altogether, along with the job. It can be especially unpleasant for a person burdened with bank loans or some other monetary obligations to get into such a situation.
What to do in a situation where there are obligations, there is a desire to pay them honestly, but there is no way to do this? In our article we will tell you what government programs for protecting the rights of borrowers exist in Russia and what needs to be done to become a participant in such a program.
If a person has lost his job and has debts, but is unable to quickly restore his financial situation, then there is a high probability that after some time he will have to face unpleasant consequences. They will appear in the form of calls and visits from employees of the credit institution, and then from collectors.
A more advanced situation may result in acquaintance with the sovereign's people - bailiffs, enforcement proceedings, an inventory of existing property for debts, lawsuits from creditors and even forced bankruptcy proceedings.
Typically, borrowers need help in two cases:
- Finding a way to fulfill obligations under new, unfavorable financial opportunities;
- To protect against excessive pressure from the creditor or professional debt collectors.
Mortgage Debtor Protection Program
The good news is that the government program to help borrowers does exist. True, not any borrowers, but only mortgage ones. The program is valid from 2021. Then the state allocated 2 billion rubles for its implementation, which were contributed to the authorized capital of the Agency for Mortgage and Housing Lending - AHML (now it is the state corporation DOM.RF).
The maximum amount allocated by the state for full or partial repayment of a mortgage is 450 thousand rubles. Who exactly can apply for government support?
According to the official portal DOM.RF, the borrower must be a citizen of Russia and belong to one of the following categories:
- persons who have one or more minor children or are guardians (trustees) of one or more minor children;
- citizens who are dependent on persons under the age of 24 who are students, students (cadets), graduate students, adjuncts, residents, assistant trainees, interns and full-time students;
- citizens who are combat veterans;
- citizens who are disabled or have disabled children.
Who does the government help with mortgage payments?
There are also requirements for the financial situation of the borrower:
- the average monthly total income of the borrower's family three months before the application should not exceed for each family member twice the minimum subsistence level established in the region of residence;
- the amount of the planned monthly loan payment has increased by at least 30 percent compared to the payment originally specified in the agreement with the bank.
There are also requirements for a mortgaged apartment. This must be, firstly, the borrower’s only home. And secondly, its dimensions should not exceed 45 square meters if the apartment is one-room; 65 meters - if there is a two-room apartment, and 85 meters if there are three living rooms.
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The latest news on this topic is that in April 2021, the State Duma adopted a law expanding the list of persons entitled to receive financial assistance from the state to repay a mortgage loan. Such persons additionally included citizens who purchased land plots with a mortgage for running a household plot, as well as for the purchase of an unfinished house or for its construction.
In order to qualify for government support, you need to complete several actions:
- find out whether the creditor bank you have chosen is a participant in the program. You can check this on the website of the state corporation DOM.RF or by calling the help desk of the bank where you plan to take out a loan.
- If the bank is accredited in the state support program, then you must contact the bank with an application and a package of documents confirming the validity of the application;
- wait for the bank's decision.
In case of a refusal (if one is issued), it is necessary to understand the reason for the negative decision of the bank. Banks usually do not disclose the reasons for their decisions. But not within the framework of state programs, in which the conditions are unified and the same for all borrowers. And if a person meets all of them, then he has the right to know the grounds for refusal. And get a written document about it.
The package of documents must include:
- copies of identification documents of all borrowers, as well as the mortgagor and his family members. If there are several pledgors, documents are needed for the families of each of them;
- documents confirming the social category of the borrower (children’s birth certificates, a combat veteran’s certificate of the established form, a certificate of disability, etc.);
- documents confirming the income level of all borrowers for the 3 months preceding the application. This includes income certificates, copies of work records, etc.);
- application in the prescribed form. It can be downloaded from the DOM.RF portal.
Obligations that remain with the loan recipient
What obligations does he still have? The assistance program does not relieve the borrower from paying the loan , nor from the obligation to insure the collateral, health or life. It will simply become easier for him to cope with the mortgage, since loan payments will significantly decrease.
For certain categories of borrowers, it is possible to receive government assistance by increasing the monthly payment amount by at least 30%. Basically, such benefits are claimed by foreign currency borrowers who have the right to special conditions - with the status of a veteran, disability or minor children.
The reader may also be interested in the following materials about mortgages:
- for the military;
- for a large family;
- for a young family;
- for young professionals;
- at the birth of children;
- for Russian Railways employees;
- for low-income families;
- for Sberbank employees;
- for salary clients of Sberbank;
- for salary clients of VTB 24 bank.
Mortgage holidays
The state officially introduced another way to help borrowers in mid-2021. Then a law came into force giving borrowers the right to a “mortgage holiday.” For example, a person’s circumstances have changed dramatically: a child was born or he was laid off at work. And if now his income does not allow him to service his housing loan, then he has the right to receive a deferment on the loan.
The maximum length of deferment is six months. During this time, the client does not make contributions, and his loan is automatically extended. Taking advantage of holidays is the unilateral right of the borrower. Accordingly, the creditor bank is obliged to provide them to him if the client’s application meets the requirements of the law.
Requirements for borrowers and purchased real estate
Up to 4 people can be borrowers for one loan. The following requirements apply to them:
- age – from 21 years;
- age at maturity date – 65 years;
- continuous work experience – 6 months.
Individual entrepreneurs must have been operating break-even for at least the last 24 months.
Facilities under construction must be registered in accordance with 214-FZ and be accredited by AHML. The construction stage can be any. The right of claim will be issued as collateral, and upon delivery of the property - the apartment itself.
When purchasing a finished home, the purchased property is taken as collateral. There are a number of requirements for it, for example:
- availability of connection to communications (water supply, sewerage, electricity, etc.);
- good condition of windows, roof and front door;
- lack of rights of third parties to the purchased housing;
- full compliance of the residential premises with the legislation of the Russian Federation;
- the wear and tear of the entire building should be less than 70%.
A complete list of requirements can be found on page 40 of the Methodology.
Federal protection for borrowers that extends beyond the scope of the mortgage
Everything is clear with the state program to help mortgage borrowers - it exists. Are there any analogues of state support for other categories of borrowers? For example, for holders of the most common consumer loans.
Unfortunately, such government official programs do not exist. The relationship between financial organizations and their clients is regulated by the current civil legislation of the country. For example, the laws “On Banks and Banking Activities” and “On Consumer Credit”.
However, there are certain ways to get rid of existing debts. Of course, we are talking about methods that do not contradict the law.
Only borrowers with mortgage loans can count on direct assistance from the state in protecting their rights
There is a support program for them that can significantly alleviate debt bondage. Other categories of debtors in the form of assistance can only count on legislative initiatives that establish or change the rules of the game in the lending market.
Bank loan restructuring
The main one is loan restructuring. In other words, a revision of its terms to reduce the monthly payment by increasing the life of the debt.
In order to start this procedure, you must submit an application to the creditor bank. The fact is that it is impossible to force the bank (or microfinance organization) to reconsider the terms of the agreement and restructure the loan. It is necessary to provide compelling arguments that the restructuring will benefit not only the debtor, but also the creditor.
A positive credit history, a long-standing relationship with a credit institution and the presentation of a convincing schedule for restoring an individual’s creditworthiness will speak in favor of the client. And professional lawyers can help prepare the necessary package of documents for this procedure and even negotiate with the creditor.
By the way, you need to choose lawyers very carefully. The Internet is replete with advertisements where companies with big names promise to get rid of any problems with overdue debts. Often, under such signs there are “swindlers” hiding, extracting money from clients and at the same time not giving any guarantees of a positive outcome. In the worst case, they will turn out to be elementary scammers who will disappear along with your money.
Remember - there are no federal debtor assistance centers that would coordinate the work of lawyers dealing with debt issues on behalf of the state. And if you come across such a name, then this is a private shop. Sometimes - conscientious. But more often than not, she simply wants to “make money” from the difficulties of debtors.
If the creditor categorically does not want to meet and refuses to restructure, you can file for bankruptcy through the arbitration court (see below for more details).
Debt restructuring during bankruptcy
If the bank refuses to restructure the loan, then the solution may be to apply to the court for bankruptcy with a request to introduce a judicial debt restructuring against the plaintiff. This option is possible if the debtor’s income to pay off the debt in installments is sufficient to satisfy the demands of creditors on new terms.
The terms of new payments will be set by the court, and they are always softer than bank ones. Therefore, if a client asks for restructuring, the arbitration court makes a decision on restructuring without declaring the citizen bankrupt.
But one thing must be taken into account - judicial restructuring, as a rule, is not suitable for a mortgage loan. Since such loans are not taken out for three years, but usually for a much longer period.
During judicial restructuring, an individual will be required to pay for the services of a financial manager - this is 25 thousand rubles, postage costs for notifying creditors and for publications about the procedure in the Kommersant publication and on the Fedresurs portal. In total, approximately 40-45 thousand rubles.
The maximum period for debt restructuring in court is 3 years (36 months). During this time, the debtor must return approximately 75-80% of the total debt to all creditors in equal proportions. The court will also review the interest rate on loans. It will be reduced to the level of the Bank of Russia discount rate at the time the court makes a decision.
In mid-September 2021, the Central Bank rate is at 6.75% per annum.
HOW TO RESTRUCTURE DEBT: PROCEDURE OF ACTION
The entire procedure related to changes in conditions is carried out in several stages. The first involves visiting a financial institution in person and drawing up an official application. The borrower must contact the branch of the bank where the original loan agreement was concluded. Using the sample provided by the manager, you need to write a statement about the need for debt restructuring.
You can prepare it first at home. All necessary documentation is attached to it. After this, the borrower, together with the bank employee, discusses the new lending conditions.
Important! Restructuring of an existing mortgage loan is carried out according to a decision made by the creditor bank to which the client submitted an application.
All papers are carefully studied, and it is also checked whether all requirements and restrictions under the assistance program are met. After a certain time, the borrower will be notified by the credit committee of the decision. It should be noted that banks have the authority to independently set the minimum and maximum terms for considering an application and making a final verdict. As a rule, this should take about 30 days, but judging by the reviews, we can talk about longer periods, since the banking institution and AHML often require additional documents. At the final third stage, a new contract is concluded, with different conditions, or an additional agreement is drawn up to the previous one.
When these three stages are completed, the borrower needs to contact the Ministry of Justice with the old mortgage and a ready-made package of papers in order to register changes to the collateral agreement.
Citizen bankrupt
As a last resort, if it was not possible to use other tools, what remains is not the most pleasant, but nevertheless effective procedure. This is a personal bankruptcy procedure. This opportunity became available to Russians in October 2015, after amendments to the bankruptcy law came into force.
And in 2021, new amendments to the law opened up new opportunities for citizens. We are talking about simplified bankruptcy. Considering that this opportunity is officially approved by the state, it can also be considered a kind of state program for the protection of debtors.
Now you can come to bankruptcy in two ways, depending on the circumstances - out of court and through the court. The out-of-court method (through a system of multifunctional centers, MFCs) is suitable for those borrowers whose debts range from 50 thousand to half a million rubles. And who do not have property - this fact should be indicated by the court and bailiffs.
In this case, the procedure will be free and will take six months. After this, obligations to all creditors declared by the debtor will be repaid. Please note - only to those creditors who will be included by the debtor in the appropriate list, which is submitted in the application for recognition of extrajudicial bankruptcy.
The remaining debts will remain with the bankrupt, despite his new status. Therefore, it is so important to remember and add to the list of loans the maximum number of those to whom you owe.
If the amount of debts is more than 500 thousand rubles, then only the option of bankruptcy through an arbitration court will be available. In this case, the court will appoint a financial manager. But you must remember that his services are paid - 25 thousand rubles. You will also have to pay 300 rubles in state duty. And pay the costs of notifying creditors and publishing messages about it. That you have decided to write off your debts.
You can find out the details of both bankruptcy procedures on the State Services website.
The most important thing to remember when considering bankruptcy as an option to pay off debts is that bankruptcy status imposes a number of restrictions on a citizen. For several years, it will be impossible for him to take out new loans without indicating his bankruptcy status and to manage companies. And also it will not be possible to go bankrupt again: in court - for 5 years, through the MFC - for 10 years.
Main provisions of the law on mortgage restructuring
To receive government assistance in repaying a mortgage, the borrower will have to contact the creditor bank with a package of documents collected in advance and an application in a special form. If the restructuring is approved by the bank, an additional agreement to the loan agreement is concluded with the borrower.
According to the Restructuring Resolution No. 373 dated April 20, 2015, the agreement specifies special loan repayment conditions aimed at restoring the borrower’s solvency.
After restructuring, the lending rate is set no higher than 11.5% for loans in foreign currency and no higher than the rate in effect on the date of concluding the restructuring agreement for loans in Russian rubles.
The amount of money to repay the mortgage is allocated from the federal budget and provided by the Agency for Housing Mortgage Lending. Thanks to additional financing from the state, AHML reimburses creditors for part of the balance under the loan agreement calculated as of the date of conclusion of the restructuring agreement.
The maximum amount of compensation is up to 30% of the balance of the principal debt on the date of application, but does not exceed 1,500 thousand rubles.
Attention! AHML carried out an additional issue of shares in 2021. The proceeds from the issue of securities, in the amount of 2 billion rubles, were used to implement the already existing state program to help mortgage borrowers. Download and print for free
Resolution No. 373 dated May 20, 2015
What is financial support?
The mortgage borrower assistance program includes the following measures:
- A mortgage issued in the currency of a foreign country is transformed into a loan in rubles. For this purpose, the Central Bank exchange rate established on the date of signing the additional agreement is used.
- Establishing a lower interest rate for the entire remaining loan term (no more than 11.5% for loans in foreign currency and no more than the current rate at the time of concluding the restructuring agreement for loans in rubles).
- Providing a subsidy for a one-time write-off of part of the principal debt (up to 30%).
The bank does not have the right to charge any fees for restructuring. The collection of documents for restructuring is carried out using the borrower’s funds.
