In this sense, the requirements imposed by the borrowing companies seem very advantageous, but they hide surprising clauses, as evidenced by Defense of the Debtor.
“Do you find yourself in a spiral of microcredit that you cannot get out of? You have run into the essence of fast loans: you have applied for chained loans until you have run into a situation of economic insolvency.
Overindebtedness in many cases is the direct consequence of microcredits, which make people believe that they are going to overcome an economic downturn, in fact, fast loans establish supposed advantageous conditions, when they hide clauses that are surprising “according to the Debtor’s Defense.
Defense of the Debtor
With a trajectory backed by experience, considers that fast loans or microcredits generate at first that the borrower finds quick liquidity but in many cases and with an abusive use, leads to a state of economic insolvency.
The company, a benchmark for the defense of indebted people in Spain, believes that, in the beginning, they could help people in a precarious economic situation. However, it affects that in the long term they can cause the impossibility of fulfilling the obligations that have been contracted by not having economic means.
In this sense, Debtor Defense declares that many people contact them because of the reunification of debts. Also called unification or consolidation of debts, it is outlined as the financial operation for which a loan is obtained to pay other previous credits.
In many cases, these clients benefit from the Law of the Second Opportunity, in force in Spain since 2015. This measure offers the possibility of a natural or legal person who owes a certain amount of money to condemn or exonerate that debt.
For the Defense of the Debtor, this Law is a mechanism that allows a person who has suffered a failure in the labor, personal or business part to channel and rebuild his life. Of course, always taking into account your good faith.
As the name implies, the Second Opportunity Law is a new option to generate agreements with creditors, condemn or exonerate debts. In practice, it is emerging as an excellent legal tool so that people overwhelmed by debt can resume their day today.
Are microcredits free?
A person who is in a momentary economic predicament may be seduced by the promises of microcredits. See an article that can not be allowed and, although it is very fair money, gives an announcement of one of those companies that ensure that they can lend from 100 to 200 dollars up to 500 or 600 without any problem and with very small commissions.
In fact, according to the OCU (Organization of Consumers and Users), it is very possible that in the first loan that is made there are hardly any commissions or even lax at the time of return, so that the microcredit seems free.
It is true that this constitutes a practice for engaging people since the entities that offer them know that the economic situation will not improve in the short term and a new desire or need will soon arise.
Regarding this, the truth is that the person will pay this loan very expensive. The first reason is that the total interest can reach 22,000%.
Another problem with this type of credit is that, in addition to having a high interest, surely difficult to repay for someone in distress, the borrowing entities brutally punish payment delays.
This clause means that, if the money is not returned within the fixed term, a very high daily delay interest may be applied, in addition to continuing to apply the APR and various charges for penalties for delays. When applying for the loan, you are accepting these penalties.
The Second Chance Law, a table of salvation from microcredits
Since its birth in 2015, the Second Opportunity Law constitutes a salvation table for people in the spiral of microcredits. It allows a natural or legal person to refer to a process similar to the one a company receives when it goes bankrupt.
The only requirements that must be met by people who rely on it are to prove that they do not have assets to deal with debts or that this has already been settled.
On the other hand, debts may not exceed 5 million dollars and the debtor must act in good faith. This last requirement is precisely the one that generates the most doubts.
To qualify for the Second Opportunity Law, it is necessary to have tried to reach an out-of-court agreement with the bank, company or financial entity. Usually and in the case of microcredits, this agreement is neither viable nor possible, so the person must refer to the Law.
In Defense of the Debtor, they recognize that this is the best way to deal with the abusive conditions of microcredits.