Festively decorated tree and a bunch of presents under it. For many people, the idea of a perfect Christmas. At the same time, “advantageous” loans pop up on TV every day, promising money in the account immediately and repayments that are guaranteed not to burden you. The pitfalls of such loans are explained by attorney Mgr. Petra Fialová
What should I look out for when taking out a loan for Christmas gifts?
If you decide to take out a loan for Christmas gifts, it is absolutely necessary to always first study the terms and conditions of the given provider and at the same time read the related reviews of the provider’s existing clients. We recommend focusing especially on the amount of individual installments, the amount of interest and penalties for non-fulfilment.
It is also necessary to check whether the provider offers the option of deferring repayments and whether the loan can be insured against possible default. After familiarizing yourself with the terms of the loan, it is necessary to consider whether you will be able to repay the loan even in a few months. Late payments have very unpleasant consequences.
Purchased Christmas gifts will then become significantly more expensive. The consequence of non-payment of installments according to the agreed repayment schedule may be court proceedings and subsequent execution proceedings, i.e. as a result of the execution of your property.
Is the provision of loans regulated by law? Do I have any legal protection as a consumer?
Yes, there is a law on consumer credit, which is any deferred payment, money loan, credit or similar financial service provided or mediated by consumers. The law regulates a number of protective provisions. For example, the loan provider must act honestly, transparently and take into account the rights and interests of the consumer. Furthermore, when communicating with the consumer, including promotional communications, they must not use unclear, false, misleading or deceptive information.
I have several foreclosures, will the provider check me? Do I have a chance to get a loan?
With a high probability, the provider will check your assets, in accordance with the aforementioned Consumer Credit Act. The provider will be interested in whether you own real estate, where you are employed, what your income is, whether you have another loan and will check you in the central foreclosure register. If you have foreclosures, the loan will most likely not be granted to you. If the provider did not carry out this check, the contract on the basis of which the credit or loan was provided would be invalid.
I don’t have the money to repay the loan, what can I do and what are the risks?
If you do not have enough funds to repay the loan regularly, immediately ask the lender for a deferral of repayments. Most banking institutions offer deferment of repayments without penalty for two months. If this is not possible, try to negotiate a more flexible repayment schedule with the lender. If neither is possible and at the same time you are still not doing well financially, be prepared for the creditor to file a lawsuit to pay the given amount.
Before that, he will probably send you a pre-suit summons. It can be expected that the creditor will be successful in the court case and a judgment will be issued, on the basis of which you will be ordered to pay the full amount together with reimbursement of the costs of the proceedings to the creditor. This can increase the amount owed many times over. If you do not voluntarily comply, the creditor will file a motion to start foreclosure on your property. The executor then has a number of means with which he can enforce the debt.
He will block your bank account, he will contact your employer, he will be interested in whether he could cash in on your real estate and movable property. Your debt will increase again, as you will also be obliged to pay the costs of enforcement proceedings. For all the above reasons, we recommend that you really consider whether it is worth taking out a loan for Christmas presents. If you do not pay properly, you can get into years of trouble representing difficult court and enforcement proceedings, as well as significant financial costs.
I found out that my husband took out a loan for Christmas presents for the children and admitted to me that he is not paying it. Am I also bound by this loan? Do I have to pay it back?
If you and your spouse have not agreed on a regime of separate property, the loan falls into the joint property of the spouses, which means that the debt is also yours and you will have no choice but to take the necessary step. Since the debt was incurred against your will, you can express your disapproval to the creditor without undue delay after learning about the debt. In such a case, the joint property can only be affected up to one half of its value.
