Even if you work so much, tragic life events can usually not be completely ruled out. Rising inflation, the loss of a job and, often, the end of the loan termination by the bank. But what are the reasons for a bank loan termination, how can you prevent it and is it legally permissible at all?
Reasons for bank loan cancellation
In principle, there are not many reasons that allow a bank to terminate a loan. For example, most loan contracts stipulate that the loan contract is terminated without notice if you fail to pay 2 (or 3) successive installments on time.
Even if the bank often terminates the loan only months later, the bank has the right to cancel from the 2nd (unpaid) month.
In some cases, banks even allow themselves to terminate an overdraft facility in the event of a foreseeable deterioration in creditworthiness (loss of job). A call credit can also be terminated before payment is made. The credit agreement is only binding for both parties after payment.
In some cases, a bank wants to get rid of certain customers. Political fringe groups or criminals are particularly affected. Although we have a free speech in Germany, many banks refer to their social statutes and want to justify their termination. In most cases, there can be legal doubts as to whether a bank’s loan termination is tenable due to political statements.
Because on the one hand the Basic Law applies, on the other hand the freedom of contract. In the case of dismissals that are socially critical, the parties to the dispute usually end up in court and often agree on a termination agreement.
Loan canceled – what now?
Once the loan has been canceled, it is in principle almost too late. In order to avoid further consequences (attachment, bankruptcy), the outstanding loan amount must be paid immediately.
However, this is not always possible immediately, especially with larger loan amounts. If there is a certain credit rating, you can apply for a transfer loan from another bank. If the loan was canceled due to debt, you can try to reach an agreement with the bank.
Many banks are cooperative because they do not want to write off the outstanding amounts. A lower repayment also means a longer term, but in many cases it can bring a satisfactory solution for both sides. Alternatively, an interest deferral would be an option. For example, the bank waives interest for a certain period of time and at least gets its money back in return.
No matter which way you choose – it is important that you quickly seek an honest and open conversation with your bank. Even if your own situation is difficult.
Avoid bankruptcy through loan termination
If an agreement can no longer be reached with the bank and an alternative solution fails, bankruptcy threatens in many cases. The bankruptcy itself is not yet to be equated with the attachment.
In most cities, bankruptcy registration is done by a charitable organization. However, an insolvency attorney can also do this. Before filing for bankruptcy, a basic check is first carried out to determine which debts exist, and once again an attempt is made to reach an out-of-court settlement. A comparison in particular is often the means of choice here.
During the bankruptcy, the lender will execute a garnishment. This runs regardless of bankruptcy. Important: If a garnishment threatens, you should apply for a garnishment protection account. This guarantees a tax-free allowance that you can live on yourself.