A Payday Loan Is Not Repaid On Time. What Does It Entail?

When you do not pay back your personal loan on the maturity date, the institution that have granted it will not wait until you start paying again. What do you need to know under such circumstances?

From the first unpaid deadline, the credit agency will send you a letter, to inform you of the consequences of the non-payment of deadlines.

At the second due date, the credit institution can register you with the Credit Bureau. If you do not repay the amounts due, your registration will last 5 years. However, upon regularization, your name should be removed from the file in the following weeks.

Due to unpaid bills, the payday loan lender will be entitled to demand the lapse of the term of your consumer credit. Thus, it may demand repayment of outstanding principal, interest, and ask you to pay late penalties.

Judicial recovery: injunction or summons

The next step is the establishment of judicial recovery. The credit institution can choose between two modes of action: the order to pay and the assignment.

With the payment order, the credit institution will ask the court to find that the claim is unpaid. When the judge thinks the claim is legitimate, he can issue an injunction to pay the sums due. This act will be served by a bailiff. At that moment, you will have one month to challenge the decision. The challenge will be made at the office of the court where the order has been issued. If you disagree with the injunction, you will receive a summons for a hearing. During this hearing, the judge will hear the arguments of the debtor, he will study again the file of the creditor.

When the payment order is not disputed, the following month, the creditor may request the affixing of the enforceable form on the order for payment order. Thus, the order will become enforceable. The creditor has the obligation to serve it on the debtor. The next step for the creditor is to request enforcement of the order.

For the summons, a bailiff will give you a summons, which will include the date, and time of the summons to court. On this document you will also find the reasons for the assignment.

Finally, not paying back your consumer credit dates can be fraught with consequences. Indeed, before the granting of any credit, financial institutions are obliged to consult Credit Bureau. If financial institutions are not prohibited from lending you, in general, financial institutions lend hardly to the data subjects.

The stigma of a “bad credit history”: how it works?

The late or non-repayment of the installments in the contractual terms finally provide for the possibility for the institution that disbursed the loan to report the consumer to the central risk and thus be included in the “black list” of bad payers. The central credit registers are databases that contain the names of insolvent persons and are normally consulted by banks or finance companies in order to know the customer’s credit reputation. The presence on these lists may compromise the possibility of obtaining future financing. However, debtors must be notified in advance about the potential registration with a central credit institution through specific or other communications. The name of the person reported remains in the “bad lists of the payers” for a period of time that varies from 12 to 36 months depending on the seriousness of the default.

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