Are you listed with the National Bank of Belgium? There are solutions to help you access credit. You took out a loan: a personal loan of €25,000 for renovations, car financing of €12,000, or a mortgage loan of €250,000.
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For years, you have been repaying your loan without any issues. Unfortunately, you learn that you are going to be subject to a collective dismissal procedure. Difficulties will soon arise, and your monthly repayments will be affected.
Are there any solutions? Let’s explore this delicate issue.
What is a banking ban?
In Belgium, as soon as you fail to pay two monthly installments of your loan, the lending institution is required to report your credit contract to the National Bank of Belgium. You are then listed.
What are the consequences?
The consequences can be dramatic because the bank can initiate foreclosure proceedings, and your house can be sold by the bank to repay your loan.
Additionally, due to your listing, you can no longer access the credit market until your dispute is settled. Furthermore, once settled, the law imposes a 15-month waiting period before you can access the credit market again.
Are there solutions?
Yes, the first solution is to take out income loss insurance. This insurance comes with specific conditions and is generally limited in duration. Typically, the insurance only covers you for 12 months after losing your job. However, this period allows you to look for a new job as quickly as possible.
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Additionally, in some cases, if you own a property free of charges, your credit institution may settle your outstanding balance with a homeowner loan.
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Prevention above all
In this area, more than others, it is better to prevent than to cure. If you are not certain of your contributory capacity, it is highly recommended to take out income loss insurance or remaining balance insurance (in case of death). In some cases, the bank even makes it a sine qua non condition for accepting your credit application.
