“Can I go to jail for not paying?” »: Answers to this and other questions about the damn debts
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Badly planned debt can be a real tragedy for an entrepreneur, a family or an individual as it can bankrupt a business and lead to serious personal problems. That is why it is important to know how to deal with the problem of indebtedness in case we fall or are already in a situation like this. For this reason, here are some of the most common questions I get asked in this regard.
1. Can I be jailed for debt?
No. Article 17 of the Political Constitution of the United Mexican States says: “No one may be imprisoned for debts of a purely civil nature. However, there are nooks and crannies since a business claim can become a criminal or custodial claim if fraud is proven. This applies to debts with banks, finance companies, people’s savings banks or private lenders.
2. Can I be charged with debt fraud?
No, unless you falsify the information you provided for opening the loan or it is shown that you took it with the clear intention from the start not to pay it.
3. May I be seized?
Yes and more if there are promissory notes and / or clothing in between. That is, you have signed credit or debt on property, machinery or cars. However, this can only happen after a commercial trial and a judge orders the seizure as a precaution at the start of legal proceedings and then leaves room for the trial as such.
4. What is the procedure for garnishment?
If you are being sued commercially for non-payment of a loan, the first step in the lawsuit is foreclosure. An actuary duly accredited by a civil court with his official identification badge will come to the fixed address and will inform you of the seizure of the said debt. You will have to let it pass and they will give you the option to choose which items you wish to seize which are assessed at that time by the clerk to cover the amount of the debt and the judgment.
5. What if I don’t let the clerk come to my address for garnishment?
In the event that you refuse to let it pass, the clerk can request the support of the law enforcement authorities to compel you, and if you refuse to choose the assets to be seized, the clerk will choose them for you.
6. How can I avoid garnishment if I am already sued?
You can pay the entire debt at the time of garnishment to stop it or negotiate payment directly with the creditor at the time with the clerk as a witness if the creditor agrees.
7. Can I recover the seized goods?
Yes and there are three ways:
- Agree to pay the requested amount in cash and the goods will be returned to you.
- Fight the lawsuit and win it by proving that the debt they are attributing to you is not legitimate.
- If the seized property does not belong to the debtor, then legal action should be taken, where you will have to prove by evidence that the seized property belongs to someone other than the debtor.
8. Can a residence be seized if the debtor no longer lives there?
No, and it is the creditor’s job to locate and collect the debtor in his new location.
9. Can they take my car if I don’t pay?
There is what is called “dation in payment” and it is the voluntary surrender of a vehicle to be taken in payment of the remaining debt of the credit when the payments can no longer be honored. However, this is a mutual and non-binding agreement, otherwise the car could only be taken back under the assumptions of the previous questions.
10. What about a mortgage loan?
As with cars, houses can pay off the remaining credit, and similarly this must be done by mutual agreement and voluntarily. Otherwise, a lawsuit for the ownership of the house and in this case an eviction lawsuit would be initiated.
11. Can you bill the referrals?
No. The only ones that can be invoiced are the co-obligated and / or the sureties.
12. Can I be charged with theft?
13. What about abusive interests?
Many people are surprised by the large sums that are paid in interest on their loans. However, generally at the beginning of the life of a loan, the user is informed of the Total Annual Cost (CAT) and the late interest rate, if applicable. In other words, predatory interest is generally accepted at the start of the loan and signed accordingly.
14. What is the probability that I will be sued for debt?
Here, six factors come into play that will determine the level of risk:
- Debt amount: The higher the amount, the greater the risk. It may be relative depending on the type of debt, for a bank it may be over 100,000 pesos, but for a microfinance firm or an individual it may be half that amount or even less.
- Time without paying: The more time you spend without paying, the greater the likelihood of being sued.
- What type of debt is it: He is more likely to receive a claim for loans when there are signed promissory notes or if they are loans with an asset such as a mortgage or car loan.
- What type of creditor is it: It is different to owe the bank than to a buying portfolio company. The activity of the bank is investments and loans, commissions for its banking services. Instead, the business of wallet buyers is exactly to achieve wallet recovery by any means possible.
- How creditworthy are you: There is always a cost-benefit balance. If the plaintiff realizes that he will win the lawsuit, but what you have is not enough to cover the debt and the costs of the lawsuit, he could lose less by not suing you.
- How localizable are you: You cannot repossess property belonging to someone who does not know where they live.
15. How long does it take for a credit bureau debt to go away?
There is a scale based on the level of indebtedness, but generally it is six years from the last update made by the entity reporting the default. It should be mentioned that debts over two million pesos and debts with pending lawsuits are not cleared from credit history.
16. What if my debt no longer shows up on the credit bureau?
This means that by law the entity that reported you to the credit bureau and entities of that type will no longer do so. However, the debt remains and could be sold or sued.
17. What options do I have for dealing with a debt situation when I can no longer pay it?
With the right financial and legal advice, you could get very deep discounts on your debt and reduce or mitigate the risk of a possible lawsuit that will hit your assets, whether it’s millions of SME loans, auto fleets. , or credit, payroll, or automobile cards. individuals, don’t forget that at PROTEGE AC we can help you.