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For years, you have been repaying your loan without any issues. Unfortunately, you learn that you will be subject to a collective redundancy procedure. Difficulties will soon arise, and your monthly repayments will be affected.
Are there any solutions? An overview of this delicate issue.
What is a banking ban?
In Belgium, as soon as you miss two monthly payments on your loan, the lending institution is required to report your credit contract to the National Bank of Belgium. You are then listed.
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.
Furthermore, due to your listing, you can no longer access the credit market until your dispute is settled. Additionally, once settled, the law imposes a 15-month waiting period before you can access the credit market again.
Are there solutions?
Yes, the first is to take out a “loss of income” insurance. This insurance has specific conditions and is generally limited in duration. Typically, the insurance only intervenes for 12 months after you lose your job. However, this duration allows you to undertake job searches as quickly as possible.
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Moreover, 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 anywhere else, it is better to prevent than to cure. If you are unsure of your contributory capacity, it is strongly advised to take out loss of income insurance or outstanding balance insurance (in case of death). In some cases, the bank even makes it a sine qua non condition to accept your credit application.