Personal loans and COVID-19 has been one of the questions that our clients have asked us in times of a state of alarm. In the same way that happened with mortgage loans in Royal Decree Law 8/2020, the government has adopted a measure to defer non-mortgage credit debts, also based on the vulnerability of the debtors.
This is seen in article 16 et seq. of Royal Decree Law 11/2020, of March 31, by which urgent complementary measures are adopted in the social and economic field to deal with COVID-19. In the aforementioned Royal Decree Law 11/2020, a series of measures are established for the deferral of the debts that we have with financial and credit institutions, which complements those agreed for mortgage loans, this time, without the requirement that they be debts. with mortgage guarantee.
If you find yourself in a similar situation, and based on the content of this article, it is convenient to go to an expert lawyer in banking law to review your case, at Toro Pujol Abogados we have been advising individuals and companies in their relations with credit institutions since 1975 , from our headquarters in Madrid, Barcelona and Montcada i Reixac physically, but throughout the entire Spanish geography. Call us and we will receive you physically or electronically, in a first consultation, at no cost to you.
Personal loans and COVID-19: The suspension for non-mortgage financing credits due to a health crisis.
With the objective that individuals are not affected by their financial obligations due to the economic crisis derived from the coronavirus pandemic, we see the application of the moratorium on mortgage debt contemplated in Royal Decree Law 8/2020 to include its scope to Non-mortgage credits and loans, as long as the debtor is a natural person in a vulnerable situation, or when the guarantors and/or guarantors of the principal debtor are, if they are also vulnerable.
Therefore, in those cases of special vulnerability, Royal Decree Law 11/2020, of March 31, empowers the debtor to request the suspension of the obligations derived from credit contracts without mortgage guarantee.
The concept of vulnerable people within the context of personal loans and COVID-19
In principle, those who fully meet the following requirements will be considered vulnerable for any type of credit:
Become unemployed or, in the case of a businessman or professional, suffer a decrease in income of at least 40%.
That the total income of the family unit does not exceed these limits:
Three times the monthly IPREM.
Increased by 0.1 the IPREM for each child, 0.15 the IPREM if we are in a single-parent family.
Increased by 0.1 the IPREM for each person over 65 who is part of the family unit.
If any person in the family unit has a disability of more than 33%, is in a situation of dependency or a disabling illness at work, the limit will be four times the monthly IPREM.
If the debtor has cerebral palsy, mental illness or intellectual disability, with a degree of disability equal to or greater than 33%, or physical or sensory disability equal to or greater than 65%, as well as in cases of serious disabling illness, the limit will be five times the IPREM.
Therefore, if we find ourselves in one of the above situations, and we are debtors, guarantors or guarantors, we would fit the definition of vulnerability determined by the norm, and we could benefit from the moratorium established by Royal Decree Law 11/2020.
Documentation necessary to prove a situation of vulnerability for personal loans and COVID-19.
In order to prove that, indeed, our situation fits the definition of vulnerability provided by Royal Decree Law 11/2020, we will have to present a series of specific documentation.
In case of being unemployed
For example, in the event of unemployment, we must request a certificate issued by the benefit management entity, which shows the monthly amount received as unemployment benefits or subsidies.
If you are self-employed and are in a situation of cessation of activity
In the case of cessation of activity of self-employed workers, a certificate issued by the State Tax Administration Agency or the competent body of the Autonomous Community will be required, based on the declaration of cessation of activity.
To determine the people who are part of the family nucleus and their particular conditions
Regarding the accreditation of those who are part of the family nucleus, the family book or document certifying domestic partnership will be required, as well as a certificate of registration with the people who are registered in the home, which is presented within six months after issuance.
To determine the particular circumstances of the members of the family unit, we must provide the declaration of disability, dependency or permanent incapacity to carry out a work activity.
Procedure for suspension of obligations derived from personal loans and COVID-19
When we are a debtor in a situation of vulnerability, as provided by Royal Decree Law 11/2020, we may request the creditor up to one month after the end of the state of alarm to suspend our obligations, accompanying the documentation that standard requires.
When the entity receives our request for suspension and the documentation that proves our situation of economic vulnerability, the creditor will be forced to suspend our obligations derived from the credit, without the need for any type of agreement between the parties, or novation of the contract.
The effects will be deployed from the request of the debtor to the creditor, and it will only be mandatory to register the extension of the term of the suspension if the credit is guaranteed by any registrable right other than the mortgage. When the suspension is applied, the creditor entity must notify the Bank of Spain.
Effects of the suspension of obligations for personal loans and COVID-19
The government has sought a temporary suspension of the obligations derived from the loan contract without a mortgage guarantee, as long as that loan was current, that is, not expired.
If we have a current loan, and we are vulnerable debtors (or guarantors/guarantors), we can ask our credit institution to suspend our obligations for three months, extendable by Agreement of the Council of Ministers.
To do this, we will send a request with supporting documentation, and upon receipt, the credit institution will be obliged to notify the Bank of Spain of the existence of the suspension of obligations and its duration.
The validity of the suspension will start counting from its request and during that period the creditor will not be able to demand payment of any installment, nor items that comprise it (capital amortization or interest). Nor may interest of any kind be accrued, neither ordinary nor delay.
Our personal loan will be extended, as a consequence of the suspension, for the time it lasts, maintaining the other agreements of the loan contract.
Protection measures for guarantors and guarantors of non-mortgage loans due to the COVID-19 health crisis
In this case, the rule tries to protect the guarantors or guarantors with a measure aimed at first exhausting the debtor’s assets, the excusion.
The concept of excursion
In legal terms, the exemption is a benefit that the guarantor or guarantor may or may not have contractually recognized, which implies the possibility that the creditor, in case of non-payment, has the obligation to first exhaust the debtor’s assets before resorting to the debtor’s. guarantor or guarantor
As we have pointed out, it may be that this benefit of exclusion is contractually recognized, or the guarantor/guarantor may have waived it.
The novelty that operates in Royal Decree Law 11/2020 -as it does in Royal Decree Law 8/2020 for mortgage-backed loans- is that, in the event of a default caused by the coronavirus pandemic, and in In the event that the guarantor/guarantor, in accordance with Royal Decree Law 11/2020, is considered a vulnerable person, they may be eligible for the benefit of excussion even after contractually waiving that benefit.
Therefore, the protection of guarantors and guarantors is limited to the patrimonial availability of the debtor, since once the creditor’s possibilities with him have been exhausted, they must respond.
What happens if we request and are granted a moratorium without being vulnerable?
Given the current situation of economic difficulty, many people are expected to resort to the possibility of deferring their debts, and the ability to review all requests will depend on each entity.
However, the norm already anticipates that those who benefit from the moratorium on legal fraud must pay the borrower compensation for the damages produced, as well as the assumption of the expenses that the application of this measure has caused and those that will lead to its inapplicability.
In no case may the amount of damages, losses and expenses be less than the benefit obtained by the benefited debtor.
Therefore, it is essential that if we find ourselves in a situation of vulnerability and we cannot afford our non-mortgage loans, we go to a lawyer specializing in banking law to review our case and advise us in the best way.
At Toro Pujol Abogados we have been advising natural and legal persons on their financial operations since 1975, from Barcelona, Madrid and Montcada i Reixac, where we have our physical headquarters, but operating throughout the national territory. Do not hesitate, call us and we will solve your doubts so that you know your rights in their entirety.