Not repaying your monthly loan payments is fraught with consequences. The key word is "anticipation".
Precautions to take before taking out a loan
We live to the rhythm of projects and we always aim further, higher. A new car, an exotic trip, a kitchen renovation, the financing of a personal project...
Sometimes we don't have the funds to do everything we want to do and then we evaluate the possibility of a helping hand in the form of a loan.
Personal loans, private loans, consumer credit... Terms that mean everything. The provision of a sum of money on a cash basis, over time, with the application of an interest rate.
Nothing could be simpler, you would say, and it's true.
A financing platform now offers you the possibility of putting together your file within 24 hours and receiving the payment of your money right away.
Yes but...
Committing to a loan deserves special attention. This is a financial and contractual commitment. You have rights but also a central obligation; repay your loan within the set deadlines.
An obvious choice, you would also tell us.
However, many people are unable to make ends meet and put themselves in a situation of personal bankruptcy.
Your financial partner must check your solvency, your ability to repay, etc. Even before validating your file for sending to a lending bank.
It is also your responsibility to take all the necessary precautions to study your personal budget and ensure that a loan and its repayment can be assumed. Otherwise, risks will be on the horizon.
Not paying costs more!
An accounting software with a long memory.
By not paying today, or after the reminders received, you may avoid an expense in the short term, but you will quickly accumulate additional expenses in the medium and long term.
Reminder fees, late payment interest... These will catch up with you sooner or later as the unpaid repayment period is prolonged.
These fees are certainly regulated by law and the spirit tends to avoid cases of over-indebtedness , but in the end, the creditor always wins.
If you fall into the trap of debt, take the lead as soon as possible.
Play fair, ask your creditors and quickly reach an agreement to meet your obligations while avoiding escalating financial burdens.
The consequences of unpaid loans
There are two options available to you. Precaution and responsiveness.
What for? Apart from the additional costs, you should also consider the ZEK risk.
The Consumer Credit Act requires financial institutions to have a credit data centre. It is a digital powerhouse retracing your financial history. The ZEK.
Are you applying for a loan? It's inscribed.
Do you have a credit card? It's inscribed.
Are you signing a lease? It's inscribed.
Do you have any concerns about refunds? It's inscribed.
Like what circulates on social networks, once it's published, it's very difficult to get rid of it.
Even if you manage to pay any arrears, a shadow may follow you for a long time.
As soon as you apply for a new personal loan or want to pay for an item on credit, your history will follow you and put a spanner in the works of an acceptance of your application.
Credit refused, credit card refused, leasing refused... All because of unfulfilled payments in the past.
The cleaver.
It's not over.
Imagine not reacting to payment reminders, imagine being registered in the ZEK data register... The next step is likely to be prosecution.
Not good at all.
The course of a debt collection always begins with the requisition of a debt collection by a creditor, whether a natural or legal person. You will then be sent an order to pay to your place of residence or place of work and you will have 20 days from its notification to settle the debt.
If you do not repay the unpaid debt before the due date, the creditor will have to request a requisition to continue the debt collection and you will then be summoned to the competent office. During this summons, a statement of your financial situation will be drawn up to determine whether or not you are seizable.
Seizable? Yes, you will have noted your workplace address as a potential mailing address. It is possible that your employer will be informed of the situation and that a wage garnishment will be imposed.
Your employer has no choice but to comply with this request. You can now accumulate additional charges and a withdrawal from your income at source.
What to do in the event of over-indebtedness in Switzerland
Let's add a third ingredient to the "solutions" recipe, which until now has been composed of anticipation and reaction.
Let's add a dose of "transparency and negotiation".
If all the avoidable steps are taken, you will need to be completely transparent with creditors, the relevant authorities or even your employer. It is no longer a question of saving appearances but of saving yourself altogether.
The effects of debt distress in Switzerland are devastating. So you need courage to stop the spiral and get out of it.
Solutions exist, but you will first have to recognize the situation, inform the people concerned and negotiate a way out that allows you to honor your obligations while spreading your payments over time in order to balance the budget for the time necessary for full repayment.
When you get through this, don't forget to clean up your data and check that your ZEK data is updated and "clean".
Milenia
As a leading financing platform in Switzerland, our role is to support thousands of loyal customers every year in carrying out their projects.
We do this responsibly and ethically so that a loan is a source of joy and not stress.
However, life sometimes causes unforeseen events to upset our plans. This sometimes has consequences on our finances and our ability to repay. As a "life project" partner of our clients, we must also recognize this possibility and inform you as best we can of the solutions available to you.
We take pleasure in making our customers happy, but the reality is that our role is also to inform you of the risks. Feel free to read our other articles on such topics on our blog.
Milenia, by your side.