Experts doubt that Russians in bankruptcy will be able to keep the only housing issued on credit
Borrowers who have not coped with the mortgage load and become bankrupt will be able to keep the only housing. This bill was supported by the government. To keep the property in the property, the client will need to conclude a settlement agreement with the bank or draw up a debt restructuring plan. However, experts are very skeptical about the prospects of such a legislative initiative.
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Olga, a 37-year-old resident of Orenburg, works as an accountant in a construction and repair company and has been paying off her mortgage for 10 years two-room apartment. Her total loan term was initially 22 years.
Over the past decade, she managed to get married, give birth to a daughter, live in marriage for almost seven years and get a divorce. From time to time, she even managed to earn extra money, sometimes the company gave out bonuses, and she immediately sent all this for early repayment of the debt. True, this happened infrequently, so the woman managed to reduce the total loan term by only two years, that is, she still had 10 years left to pay for her housing.
After the divorce, the situation with money sharply worsened. The husband left Russia and, having transferred alimony only a couple of times, stopped financially helping the former family. Olga tried to get the resumption of payments through the bailiffs, but so far to no avail. The financial burden of raising a daughter completely fell on the shoulders of a woman.
It became especially difficult to make payments after the start of the SVO and the imposition of sanctions. The company's number of orders decreased by a third, some of the company's partners left the Russian market, and the management decided to reduce the salary of all «not working in direct sales» employees by 10%.
Trying to get rid of the financial burden that turned it life is a constant desire to make ends meet, Olga began to look for a way out. She has heard about the bankruptcy procedure and even talked to fellow lawyers about this topic, but she is afraid of being left without her only home. A woman prefers to refuse vacation trips or dinners in order to somehow save money, but just not to lose the apartment she got with such difficulty, for which she has already paid most of the cost.
To help mortgage holders who find themselves in a difficult life situation, just the new bill, which was supported in the Cabinet of Ministers, is called. It allows Russians to keep the only housing issued on credit in case of personal bankruptcy. However, for this, the borrower must conclude a settlement agreement with the bank or draw up a debt restructuring plan. At the same time, this document will not apply to the relationship of the mortgage client with other creditors, including the first and second priority, as well as other property of the borrower.
As Sergei Kolunov, a member of the State Duma Committee on Construction and Housing and Public Utilities, pointed out, today the only mortgage housing can be taken away even for non-mortgage loans. At the same time, difficult life circumstances and the presence of small children are not a deterrent in this matter. However, the government-approved measure will protect citizens who regularly repaid their mortgages, but found themselves in a difficult life situation, the authors of the bill under discussion say. At the same time, it is already known that the Cabinet of Ministers is ready to support the initiative if it is finalized taking into account the comments of the departments. Thus, the draft law should work out the conditions for concluding agreements to ensure the protection of the interests of creditors.
According to Oleg Pantyushov, lawyer of the Moscow Chamber of Advocates, today every 10th bankruptcy case is connected with a mortgage lender. In other words, among the bankrupt people who could potentially be helped by this bill, there are not so many. And the percentage of cases in which the bank takes housing from mortgage lenders is not large. “This does not happen so often: if there is hope that a person will be able to pay off a debt, the bank will prefer to meet him halfway,” says Polina Gusyatnikova, senior managing partner at PG Partners law firm. — By themselves, such lawsuits are very lengthy: on average, up to a year or longer. The procedure for selling debtors' property at auction is also not a quick and costly business.
At the same time, human rights activists in any case welcome the adoption of the initiative. “People who took out a bank loan to purchase a single home should be able to live in this home at least for a while,” said Dmitry Yanin, chairman of the board of the International Confederation of Consumer Societies (ConfOP). — According to our observations, mortgage borrowers are the most solvent and accurate: most of them make loan payments on time. The only thing that can complicate their payments is the loss of a job, which is currently the key reason for bankruptcies of individuals in Russia.”
Lawyers point out that, based on bankruptcy practice, a person who has a mortgage loan also pays ordinary consumer loans. «Write-off» of such loans in the bankruptcy procedure will allow a person to prevent the accumulation of delinquencies and mortgage debts. But, according to the arbitration manager Semyon Nikolaev, it is important to take into account the balance of interests of borrowers and creditors. Lenders who provide consumer (unsecured) loans risk their own resources and expect their funds to be returned with interest. Therefore, it is necessary to provide compensation mechanisms for creditors in case borrowers cannot pay their debts. “So far, I only see mechanisms for additional liability insurance, which in one way or another will lead to an increase in the cost of the loan,” the expert noted.
Such a law may also have negative consequences for the mortgage lending market. In particular, it threatens to provoke higher mortgage interest rates or stricter requirements on the creditworthiness of borrowers as lenders (banks) try to offset the increased risk. Thus, the question of evaluating this bill comes down to what is more important: protecting borrowers who are faced with a difficult financial situation, or maintaining the stability of the mortgage market and the interests of creditors.
“I am skeptical about the provisions of this bill: in their current form, these are just dead norms that will not work at all in practice,” says Pantyushov. Recognizing that this is undoubtedly a good initiative for citizens, lawyers point out that even now, within the framework of bankruptcy, no one forbids them from entering into settlement agreements with any creditors. But for banks to participate in this is a dubious prospect.
“I'm not sure that banks will seek to conclude amicable agreements with bankrupts,” says Gusyatnikova. “It is much easier for a lender to take an apartment, sell it and pay off the entire debt at once.” Firstly, loan restructuring is an additional amount of work for the bank and someone should deal with it with all the ensuing costs of time and money. Secondly, there are no guarantees that the bankrupt will be able to continue to pay on the loan even in a smaller amount after some time. So without a clear description of the rights of creditors, that is, banks, the law will simply remain letters on paper and will not be able to protect mortgage bankrupts, experts conclude.