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Debt consolidation

When asking for a loan, a lease, a mortgage or any other form of financing, an unforeseen event can force the impossibility of regularly honoring the installments agreed by the amortization plan. To avoid the legal consequences of non-payment – such as a report as a bad payer or an order for payment – you can propose to renegotiate the installment and the repayment schedule by submitting a debt consolidation and check out Various debt companies.

As we have anticipated, the debt consolidation plan makes it possible to resolve the debt exposure through a financial agreement with the creditors and to start the agreed recovery of the debts. Debt consolidation is a recent financial instrument, introduced by Law Decree n. 212 of 2011 containing “urgent provisions on the composition of the over-indebtedness crisis and the regulation of the civil process”. The procedure – introduced by the Government precisely to remedy situations of over-indebtedness – provides the debtor with the possibility of concluding a debt restructuring agreement with the creditors according to the crisis settlement procedure, or with a proposal for an agreement to be filed with the Court of the place of residence of the debtor.

 

So what does “debt consolidation” mean?

So what does "debt consolidation" mean?

Ultimately, the debt consolidation plan is nothing more than a renegotiation of debts articulated in multiple mortgages or loans through a loan that merges them into a single installment of a lower amount, higher amortization period and similar or lower interest rate for the purpose to simplify and make the extinction of debt more sustainable. The debt exposure is thus “spread” on a new financing plan, lighter and in easier conditions, with which the previous debts will be extinguished.

 

How the debt consolidation procedure works

How the debt consolidation procedure works

Of course, debt consolidation requires strict admissibility requirements and a precise procedure. The debt consolidation plan is in fact granted only to those who can provide solid guarantees – such as a permanent employment contract, seniority of at least 24 months and the absence of protests, foreclosures or reports as a bad payer – and the proposed agreement (accompanied by the attestation on the feasibility of the plan, the list of all creditors and the extinguishing statements) is filed with the court.

 

How to agree on a debt consolidation plan

How to agree on a debt consolidation plan

Agreeing on a debt consolidation plan is a complex procedure which, as we have pointed out, passes through a strict attestation of the debtor’s reliability and the feasibility of the plan. For this reason, professionals in negotiating debts with banks and financial institutions such as GMB Finance experts can provide valuable advice to be able to conclude advantageous agreements with banks.