Mortgage debt is not uncommon. Most families in our country cannot afford to purchase their own home without the help of a bank, but the mortgage term is very long and can reach 25 years. Over the years, both earnings and the overall financial situation of the family can change. This leads to delays and violation of the payment schedule. If there are no contributions for more than 90 days, the bank has the right to file a lawsuit to seize the collateral. Neither the law banning eviction from the only home, nor even the presence of minor children will save us here. The bank can dispose of the apartment or house until the encumbrance is lifted (that is, until the debt is repaid). If a citizen does not pay, the credit institution simply sells the home at auction.
But there are also good reasons why a family cannot pay a mortgage. This could be dismissal or layoff, death of a breadwinner, sudden illness or urgent expensive treatment. In this case, both the court and the bank can meet halfway. There is also a government program aimed at helping such families. It is completely legal to write off mortgage debts.
Options for writing off mortgage debt
First, we will tell you how you can legally write off mortgage debt. You need to choose which one is right for you based on the circumstances and characteristics of the situation in which you find yourself.
1. State program with the write-off of mortgage debt in the amount of 10% or 20% of the principal amount.
The state can compensate part of the debt. Until 2016, it was 10% of the principal debt, according to Government Resolution No. 373, but from December 2021 it was decided to compensate 20%. In other words, if with a mortgage loan of 5 million you have 2 million debt left, the state can compensate 20% - that’s 400,000 rubles.
This relief can be used up to 600,000 rubles. This is a threshold that cannot be exceeded under the current terms of the regulation. In order for you to take advantage of this government program, the apartment must cost more than 8 million rubles.
2. Write-off of mortgage debts for large families.
There are certain benefits that come with having children. When the first child is born, the family has the right to compensate the cost of 18 sq. m. of housing. When the second child is born, the state covers the same amount. The third can completely help you write off 100% of your mortgage debt.
To completely eliminate mortgage debt, you need to contact the Pension Fund of the Russian Federation with a package of documents. You will need to bring:
- Certificate of maternity capital;
- Mortgage agreement with a credit institution;
- Marriage certificate;
- Birth certificates of three children;
- Documents confirming ownership of real estate with a mortgage;
- Certificates from the bank about the amount of debt remaining at the time of application.
First, you can submit copies of documents; you will be asked to provide the originals at the reception. After verification, the debt will be written off and the mortgage loan will be closed.
Important! To take advantage of this benefit, you must have a mortgage lending agreement under the state program with the bank. If this is not the case, you must first renew it, and only then contact the Pension Fund branch.
3. Write-off of mortgage debt when earnings decrease.
To write off part of the principal debt on a mortgage due to a decrease in income, you need to document this. To achieve this, wages must be reduced by more than 30%. After this, 3 months must pass before you can apply for debt restructuring.
A similar situation is possible if the mortgage loan is in foreign currency. In this case, if the exchange rate changes and the monthly payment increases by more than 30%, while maintaining the level of wages, the debtor can apply to write off the principal debt on the mortgage.
From whom can mortgage debt be collected?
There are cases when a person stops paying obligations because he assumes that the payments will fall on the shoulders of someone else. This happens if the mortgage was taken out jointly, for example by spouses, and in the event of a divorce, the apartment and loan must go to one of them. As a rule, both real estate and obligations fall on the shoulders of both: payments and living space are divided. However, if the mortgage was taken out before marriage, a person who had nothing to do with it has the right to refuse both the apartment and the loan, and also apply for compensation for his own expenses on the mortgage that occurred during the marriage. During a divorce, the interests of minor children, dependents, and incapacitated family members are also taken into account.
How to participate in the mortgage loan forgiveness program?
Can everyone have their mortgage debt written off? The list of groups of citizens who can take advantage of the state program is presented below:
- Families with two children;
- Young families with one child;
- Employees of the innovation cluster;
- Former combatants;
- Scientists and members of the Academy of Sciences;
- Workers of a factory or city-forming enterprise;
- Government servants or officials;
- Families with a dependent under 24 years of age without income;
- Families where a child or one of the parents has a disability.
Real estate for which the principal mortgage debt can be written off must also meet a number of requirements:
- Be the only residence;
- Be “clean” in legal terms;
- The price per square meter should not exceed 60% of the average cost in the area.
From 2021, there are also requirements for the debtor’s income - it must decrease (either for the borrower himself or for the family as a whole). The balance of money after paying off the monthly mortgage loan payment should be no more than two minimum subsistence levels per person, so that the family can take part in the government program and write off the principal mortgage debt.
Citizens who have gone through bankruptcy proceedings and are declared financially insolvent by the court cannot take advantage of this benefit. Also, a loan for an apartment or house must be targeted, and the overdue period must be no more than 4 months and no less than 30 days.
At what income can you write off your mortgage?
Initially, borrowers who already had a debt to the bank could take advantage of state support. Conditions have changed and now even those who have financial problems but still pay a monthly payment can count on support.
What should the income be?
- A decrease in income over the last 3 months by 30%, compared to the period before opening a mortgage.
- The currency surge caused monthly loan payments to increase by 30%.
- The total family budget is less than two times the subsistence level (twice the per capita value in 2021 - 23,306 rubles, for those of working age - 25,404 rubles).
The amount of family income includes: the salary of each family member, social benefits and payments.
Principal debt write-off program at Sberbank
To apply for compensation of the principal debt on a mortgage under the state program, you need to come to a Sberbank branch, consult with a specialist and receive a sample application, as well as a list of required documents. After the application has been accepted and the accompanying papers have been collected and submitted to the bank, you will need to wait for the decision of the AHML.
If the answer is positive, a subsidy will be transferred to the account, which will reduce the mortgage debt. If participation in the state program is approved, you will need to sign a new agreement with the credit institution.
What can the bank offer?
Each banking organization has its own programs to help people who are temporarily unable to pay their debt or are unable to cope with it. Litigation and collection of funds are unprofitable for the bank; the lender will prefer to maintain good financial relationships with the borrower. Check with your bank about the possibility of using the following solutions.
Credit holidays.
A method suitable for people who are experiencing temporary financial difficulties. If you understand that the problems will not last longer than a few months, try this option. In this case, payments are suspended for a short period of time, during which the client can improve his own situation.
Restructuring.
In case of difficulties that last longer than several months and jeopardize the ability to repay the loan for a long time, it is recommended to contact the bank for restructuring. This is a revision of the terms of the loan: for example, a person may be given a longer repayment period, which reduces the monthly payment. In both this and the previous case, you will need to provide evidence of your financial problems and explain to the lender exactly why you cannot maintain payments at the same level.
Consolidation.
This is an option for those who have several debts on different loans.
A mortgage can be combined with a consumer or car loan, even if it is taken out from another banking organization. The conditions for providing such a service are different for each bank, but, as a rule, payments during consolidation are reduced, as well as the total amount of interest, so this is a more profitable solution than paying several obligations. Find out: How many current vacancies are there in your city?
Documents for participation and benefits
As we already wrote above, first of all, an application is required, a sample of which you can obtain at a bank branch or download on the official website. It must be filled out and the following list of documents must be attached to it:
- Passport or other identification document;
- Income statements from family members to demonstrate financial status and prove that you are eligible to participate in the program;
- Child's birth certificate;
- Certificate of marriage or divorce;
- Cadastral passport of the apartment and registration certificate;
- Extract from the Unified State Register (issued for a fee);
- Agreement for a mortgage or participation in shared construction;
- A copy of the work record book or employment contract with signature and seal.
Additionally, the bank may request:
- Documents confirming the borrower's disability;
- Combat participant ID;
- Documents confirming the disability of the borrower's children.
How does collection take place?
A creditor can collect debt against collateral property not only through the court. It is possible to file an extrajudicial foreclosure of the mortgaged property if this is provided for in a mortgage agreement or an agreement that entails the creation of a mortgage by force of law, or if the rights of the mortgagee are certified by a mortgage or pledge. If the bank does not receive funds from the borrower for a long time, as a rule, it assigns the loan to a third party in the assignment format, that is, transferring the right to the amount of debt. And even in this case, you should not be afraid or despair. The conscientious successors of the banking organization to which your loan is transferred are also interested in your successful release from your obligations and are ready to meet you halfway. In such circumstances, EOS will try to offer you more favorable payment terms; with successful cooperation, it may forgive part of the debt. Do not be afraid to cooperate with credit institutions: we are interested in helping you.
Is it possible to write off mortgage debt in other ways?
In this article, we looked at the main ways to get rid of the principal debt on a mortgage. Even for good reasons, it will not be possible to not pay the loan, otherwise the apartment may be taken away and sold at auction. The bank has every right to do this, even if this is the only housing, since it is collateral, which means the credit institution can dispose of it at its own discretion.
Does this mean that for citizens who cannot take part in the state program and in difficult financial situations there is no way out but to say goodbye to housing? The first step is to obtain advice from an experienced lawyer. He will consider all the circumstances and offer solutions. Your best solution may be to initiate and go through personal bankruptcy proceedings. This is the only legal way to get rid of not only mortgage debt, but also other types of debt (traffic police fines, utility bills, receipts, loans).
A citizen is declared bankrupt only if his financial insolvency is recognized by the Arbitration Court. The financial manager must take part in the procedure, who acts as an intermediary between the court, the debtor and creditors, holds a meeting of creditors and draws up a plan for the sale of property. The result of filing an application for bankruptcy can be not only the writing off of debts, but also a peaceful resolution of the conflict if the creditors and the debtor agree to meet halfway.
Bankruptcy of an individual has its own consequences, such as a ban on business activities for 5 years after the court’s decision, as well as difficulties with the subsequent receipt of loans and borrowings. But this is much better than losing your home for debt. If you cannot participate in the mortgage debt forgiveness program, but are experiencing financial difficulties that prevent you from making payments to the bank, it is better to seek legal advice.
Mortgage bankruptcy - Glavbankrot company
Filing bankruptcy with a mortgage is a complex process that requires an analysis of risks, possible negative consequences and avoidance of collisions with pitfalls.
Glavbankrot company specialists analyze as deeply as possible, study each case related to mortgage bankruptcy and help find the most optimal solution to the problem. Our task is to help you get out of your financial situation with minimal losses and negative consequences! If a specialist understands that it is possible to do without bankruptcy, then we try to reach a peaceful resolution of the issue by restructuring the debt - reducing the monthly payment.
Are you facing financial insolvency? Can't pay off a real estate loan? There is no need to try to take out a loan to pay off the arrears! Don't increase your debt, which will become unbearable every month. Call us, we will help you find a way out of the situation!
