When the interest rate soars, the debtors drown and the banks celebrate - one thing they don't tell you - voila! Sentence

The interest outline threatens to drown in debt those who were previously barely able to meet the repayments (Photo: ShutterStock)

"Due to the increase in interest rates in recent months, thousands of people throughout the country have fallen into huge debts that are only increasing, but in a completely sealed way, it is precisely now that the banks are using power," says attorney Yifat Ben David-Bustos, who specializes in insolvency law and lends to many debtors.

According to her, an outline The interest rate, which does not seem to be going to stop anytime soon, threatens to drown in debt those who previously were barely able to meet the repayments. Now they are accumulating enormous debts, which they are unable to repay. "Thousands may be thrown onto the street," warns attorney Ben David-Bustos. "It is about the laws of souls."

To the question of what should be done by someone who has fallen into a huge debt to a bank of hundreds of thousands of shekels, which he is unable to repay, attorney Ben David-Bustos answers: "One way is to apply for insolvency proceedings, and in fact to declare bankruptcy, but this is a procedure that carries difficult consequences , both in terms of the restrictions imposed on the debtor and also in terms of the stigma that he carries like the mark of Cain and the way in which he may perceive himself."

Another way is to reach a more balanced debt arrangement with the bank. "The problem is that, usually, when a private person owes a significant amount of money and turns to the bank with a request For a settlement, without the professional guidance of a lawyer well versed in the field, no one looks at him and in the best case they will offer him an excellent settlement to the bank, but not necessarily good for the debtor."

The bank, explains attorney Ben David-Bustos, actually imposes high fees on arrears, when the interest rate soars and the debtor is left with a broken trough and agrees to sign almost any arrangement without fully understanding the consequences. It will only get worse."

According to her, the banks have been acting forcefully towards debtors for many years, and the very situation in which the debtor is forced to stand in front of a bank branch manager and provide explanations, creates a distinct power gap. "Debtors do not know their rights vis-a-vis the bank and feel like defendants standing helpless In front of the state attorney's office and the court," she emphasizes.

"An opportunity towards the end of the year to settle debts"

The way to balance the power gap is to arrive prepared, after receiving legal advice and accompanied by a skilled and experienced lawyer who knows banking and insolvency laws, and knows how to speak to the banks in their language.

"Sometimes the banks operate excessively, and someone has to point that out. All is not lost," she seeks to reassure.

Attorney Ben David-Bustos refers to the Zaevi ruling, a revolutionary ruling issued by the Supreme Court in 2015, in which it was ruled that the banks will repay the businessman a huge sum of NIS 286 million for interest on arrears that was charged to him, and as claimed in this case "murderous interest" The

interest was based on a so-called agreed compensation in the contract between the parties, but the court ruled that there was an exception. "In the judgment it was determined that sometimes, in exceptional circumstances, the amount of compensation agreed in the contract with banks can be changed," says attorney Ben David-Bustos.

"The bottom line for smaller debtors is that they too can look directly at the bank clerks and not accept as a sign of their refusal to be flexible and come towards the customer."

According to her, especially towards the end of the year, when the banks strive to improve their balance sheets and reduce the extent of bad debts (debts that they estimate they are unable to collect), there is an opportunity to reach an agreement with them, which will make it possible to reduce the extent of the debt being paid and lead debtors to a new path.

"Don't be afraid of the bank, don't agree to fall into its net," she admonishes the debtors.

"Improve the balance of power between you and the bank officials through a professional, and know that in any case you can think of a creative solution that will help you get out of the hole."

: 053-6110332 or by e-mail: bdblawoffice@gmail.com

to attorney Yifat Ben David-Bostos on the legal website

article courtesy of Zap Legal

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