It has certainly happened to several people to find themselves in a moment of economic difficulty in their lives, which forced them to have to go to the bank or a financial institution to apply for a loan, in the hope of being able to honor it and pay it off in due time. Sometimes, however, things do not always go right and you can find yourself in conditions of extreme difficulty, perhaps because you have lost your job or because some inconveniences or unforeseen events have occurred that have totally upset the normal rhythm of life.
Situations such as the one described above, unfortunately, happen often and we find ourselves unable to pay the various installments of loans or loans , up to a condition of total insolvency.
Not everyone knows that in the face of these moments there is a valid solution to put an end to these difficulties : the excerpt balance , that is, an amicable resolution with the creditor to facilitate the repayment of one’s debt. What and how the write-off balance works
The write-off balance is a very valid tool for negotiating debts with banks and financial companies, in the event of positions of economic distress or disputes. It allows the debtor to close his debt position by paying a lower sum than the total residual amount that should be paid to the bank or financial company. In a nutshell, the creditor, through this agreement, agrees to reduce a certain percentage of debt owed to him.
A practical example could be more illustrative. Mr. Rossi (the debtor) has a residual debt with his bank (the creditor) of 20,000 euros, but due to the loss of his occupation he knows that in the future he will no longer be able to pay the monthly payment of 800 euros that he owes ‘banking institution. To avoid, therefore, that the latter act at a legal level, and then proceed with the attachment of any assets of the debtor – plus interest charges and legal fees – the creditor agrees to close the debt against an immediate payment of 12,000 EUR.
In this way the debtor saves 8,000 euros of debt and the bank obtains a certain and immediate income. This and, specifically, the write-off balance operation.What are the advantages for the parties with the write-off balance
For the debtor, the write-off balance is an excellent way to see the debt substantially reduced, without running the risk of possible future legal actions against him. With a much smaller sum than the one owed, it is advisable to close a balance and write-off debt and thus extinguish one’s debtor position.
On the other hand, even for the creditor the write-off balance could prove to be the best way to deal with the outstanding debtors (which are expected to no longer be able to recover). Rather than not returning even one euro and having to file a lawsuit, with all the problems and costs that it entails, the creditor can get out of the difficult recovery of the sums due to him by agreeing to a sort of “discount” on the amounts due and thus managing to obtain a secure and immediate entry. When can you request an excerpt balance and how it should be done
There are no official and mandatory deadlines that must be respected in order to request the excerpt balance. The sure thing is thatthis operation must be requested only after your financial practice has already gone into bad debt and the bank or financial institution already has the sensor that your credit will have to be turned at a loss.
The negotiation proposal containing the offer that the debtor presents to the bank must be made in writing, by registered mail, directly to the creditor. Obviously, the closing of a debt by means of an excerpt balance is not a simple operation that is always positively received by the bank or by the entity that disbursed the loan and in order to ensure that they become sensitive to the request of the debtor, it is necessary to place the question correctly and intelligently. To do this you need the experience and professionalism of those who specialize in this operationand manages to demonstrate strong negotiating power, which will certainly guarantee the possibility of concluding the transaction at advantageous conditions. Furthermore, often, the presence of a lawyer following the negotiation can bring a certain authority to the forwarded request. It is possible to request the excerpt balance even for a mortgage
The excerpt balance operation can also be made by the debtor for his own loan, since it represents a real loan granted to him. This type of negotiation is also possible when the property is about to be auctioned, as any settlement agreement between creditor and debtor would interrupt the enforcement process that would have continued instead with the foreclosure and forced sale of the asset to the auction.The write-off balance must be concluded only with a total and immediate repayment.
In most cases the bank or the financial institution accepts to have the amounts due reduced in percentage only against a global income on the spot. It is also true, however, that when you are faced with large amounts that must be repaid and in the presence of enormous economic difficulties for the debtor, the bank and financial institution could accept an excerpt balance that in any case provides for the repayment in installments or deferred payment. . What happens after the write-off balance
If the response to the write-off balance request is positive, the debt is closed according to the terms of the write-off balance offer: within the deadline (or deadlines) established by the proposal, the debtor must pay the installment (or installments) provided for in the repayment plan. Once the position is closed, the creditor will issue the debtor a letter of release certifying that nothing is due to him anymore. Furthermore, after the write-off balance, there will also be the cancellation from the CRIF (Central Financial Risks) of the name of the debtor who will return to being so “clean”.
If, on the other hand, the write-off balance is refused, the creditor could decide to continue through an injunctionagainst the debtor, trying to retrieve the paycheck or assets of the debtor. What makes a bank desist from proceeding with an injunction and instead choose the excerpt balance
Italian justice, useless to hide it, and almost always characterized by very long waiting times and various complications that often discourage those who have to undertake small and medium weight. The overload of practices and the slowness of the courts in their management, the complex bureaucracy and the high legal costs and burdens, often discourage banks and financial companies from taking the path of forced recoveryof credits and push them to take faster and more convenient ways, such as the excerpt balance. In a context, therefore, on the one hand disheartening, this situation can prove to be a good opportunity for those who are in difficulty in obtaining advantageous conditions to repay their debts.
