Poor but not delinquent

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If you lose your job or a significant part of your income and you see that you do not make ends meet, you can not afford all your expenses, insomnia, headaches and probably stomach pain. But having information on how to deal with those situations can save many other extra dislikes and facilitate survival while waiting for the situation to improve. Knowing which receipts can be postponed and which not, if it is convenient to give priority to some payments or others, if it is better to be crazy while nobody claims or warn the bank that we will not be able to pay can be very useful at a time when one is he feels overwhelmed and in a dead end.

The lawyer José María Marqués, whose office of Insolnet spend four or five people each week with solvency problems, says that “they arrive at the office sunk, suffering a lot, because the insolvency causes in those affected a real collapse similar to the one that goes into a large labyrinth without a defined plane: all the walls, corridors and doors seem identical; his life are long nights of insomnia and a lot of anguish returning again and again on the same thoughts of failure and pessimism . ” The first thing he does is reassure them and make it clear that, as bad as things go, even if they lose everything, they will never miss their bread, because even though they can not pay and the bank or other creditors seize them, there is a part of the income that the law declares unattachable and that no one is going to remove. Of course today there are also those who do not have any income , either because they have exhausted unemployment benefits or because their circumstances did not give them the right to them, and in that case the priority is to seek some kind of help. In any case, what is involved is to analyze the real situation of each one and to look for a strategy to avoid or minimize the defaults and the difficulties.

The diagnosis

The important thing, when one faces economic difficulties, is to stop and think, analyze and diagnose the real situation of family finances, and then develop a plan and a medium and long-term strategy to face it and get out of it, avoiding acting on impulses . If there is something contraindicated when one lacks money to arrive at the end of the month, it is the flight forward, improvise each day what is paid and what is not, or choose to pay the payments as they arrive. We need foresight and planning. “The first thing is to clarify the situation in which one is, how we are of income and expenses and how it has gotten there; it is necessary to recognize reality in order to change it, “says Xavier Subirats, partner of Amsel Assessors and treasurer of the Col.legi d’Economistes de Catalunya. It is not the same that the unemployment benefit does not arrive to keep the gym fee, the weekend trips or the purchase of a new television, that to see that the income does not give to pay the quota of the mortgage or the rent, Domestic expenses and accumulated debt on credit cards. When it comes to getting an idea of ​​the situation, Marqués advises starting with the risks assumed with financial institutions. If one has doubts about which debts are pending and with whom, one can go to an office of the Bank of Spain and request a certificate issued by the Risk Information Center (CIR), which will include, for example, the total outstanding balance of the loan or loans you have in your name.

The alternatives

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Once you are clear about where your finances are flowing, the next step is to see what you can do to fix them. In the current crisis situation it is difficult to find immediate alternatives to an insolvency situation by means of income, since it is not usually in the hands of one to find work quickly, raise the salary or get more clients for the business. So the alternatives are usually always in the field of expenses: what can be cut. The first thing is to lower the life train: what expenses can be eliminated, what consumption can be reduced and, if not even so, what payments can be deferred, fractioned or renegotiated. At this point, each person and each family is one world, and if one will first cancel the gym fees, another may choose to forego certain insurance policies, or loosen light bulbs to spend less electricity. The question is to try to adjust the level of expenses to the new level of income and for this each one has to prioritize according to their situation and their interests, but foreseeing how those decisions may affect them in the future. “Renewing the maintenance fee for the pool is incompatible with going to the social assistance services of the City Council to ask for some kind of help; food, housing and education could be among the essential expenses, “says Marqués. And he adds that when it comes to prioritizing we must also take into account the receipts of gas, electricity, water and telephone, because some of the companies that provide these services are very agile when it comes to cutting off the supply due to non-payment ” and if you cut the light, the consequences can be serious and expensive, because you rot the food you have in the freezer and refrigerator, “he warns.

That is why it is so important to have information about what margin of maneuver there is over each expense or invoice when prioritizing and designing the strategy of what is to be paid and what is not. “When there is a drastic loss of income due to unemployment, illness or other misfortune, it is about facing the situation as soon as possible, to evaluate the obligations contracted and the periodic payments and to face them through negotiations, postponements or subdivisions, depending on the case,” they recommend. from the Spanish Confederation of Organizations of Housewives, Consumers and Users (Ceaccu). In general, experts suggest that there is usually more possibility of negotiating deferrals or split payments with the Administration (for example, when paying
taxes) or with banks that with service companies, although some also offer facilities for the unemployed or people with economic problems (see support information).

The strategy

Knowing how each creditor acts can make it possible to design the strategy of renegotiation, postponements, shortages, and so on. “It is not about seeing what I am going to postpone this month, but about specifying what I am going to change to adjust my expenses to the current income; We must focus on the essentials, and budget imbalances usually come from a high level of indebtedness or high levels of spending with cards; the priority should be to eliminate debts with higher amount and terms, renegotiate what affects the house, and lead an economy of grandparents, ordering the expenses and reserving a departure for each thing; there is an initial period of strong sacrifice but then, month after month, the situation is recomposed and can be lived, “sums up Xavier Subirats.

He warns, in this sense, that postponing payments does not solve anything, it is only a transitory tool “because if your income does not reach the level of expenses, postponing will only add more debt ” because you will not be able to pay when the time comes. Experts also warn about the high price paid for some deferred payments, such as those of credit cards, which carry interest rates of more than 20% per year in most cases. In fact, the advice of insolvency specialists is to cancel the debts owed to the cards as soon as possible, because they are very expensive and the monthly fee usually includes little capital and many interests, so that the debt is perpetuated over time. . That’s why it may be more interesting to negotiate deferments or reductions in mortgage payments or payments to the Administration, which have a lower interest, and release that money to pay off the more expensive debts.

“Not everyone can redo their finances , because there are people who have lived with a level of income and expenses that can hardly be recovered in the medium term, but there are many others that simply go through temporary difficulties and banks, in those cases, they show willing to negotiate and to admit solutions of deficiency or deferment of quotas to obtain that that person pays less, but pays, in hope of which it finds employment or improves its situation “, indicates Subirats. He adds that what is not easy is to get new credits or that the bank lets you group debts contracted with other entities.

The execution

The negotiation with the creditors and the application of the savings plan can not be improvised either, one must think carefully about the strategy to follow. If one is clear that with a deficiency, rebate or deferment could pay your creditor, it is worthwhile to warn you that you have problems paying and to raise alternatives and negotiate possible solutions. But when you know that no matter how much you tighten the belt can not pay a debt, it is better not to anticipate the problem to the creditor and, on the contrary, it is convenient to try to buy time. The latter is of vital importance in the case of the mortgage, because all the time that can delay the start of the enforcement and the embargo is time that person will continue to enjoy their home, admit legal sources. But, eye, that to give long is not to ignore the requirements that the bank or any other creditor does, because that can complicate the things. “Collect all the correspondence that comes to us, be warnings, demands, etc., will allow us to have precise knowledge of how the different procedures are developed; we must bear in mind that judicial processes are not paralyzed by the debtor’s non-location, but continue in his absence, “explains José María Marqués. In fact, your advice is to take advantage of that time to put yourself in the hands of a lawyer, going to the corresponding Bar Association to request one of the free justice service if you do not have money to hire one.

Another caution that no expert says out loud but do address with their clients is that, if they see clearly that they will not be able to pay the mortgage, they bet for the bank diversification: that is, that they do not enter the payroll or the unemployment benefit in the same bank to prevent them from blocking or withdrawing their money automatically. According to some affected, a practical solution when foreclosures are foreseen is to enter the money in a current account in the name of a trustworthy and solvent relative in which he appears as attorney-in-fact, from there, to pay the payments that are considered important, as the receipts of light, water or others.

Other possible measures of planning when one foresees that in the medium term it will run out of liquidity and may end up being foreclosed is to anticipate some payments that it creates as priorities , such as the fees of the children’s school. If the foreclosure is in the process, these advance provisions could be considered as an asset raising, “Marqués warns, although he acknowledges that when it comes to expenses related to the education of children it is more difficult for a judge to question them.


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For those who go through serious economic difficulties can be moderately reassuring to know that if banks, Treasury or other creditors take legal action against him may lose their assets but, while you have income, you will not be without food because there is a part of these that can never be seize.

“Article 607 of the Civil Procedure Law lists a series of perceptions that, due to their small amount, are unattachable; you can not seize even one euro of the income equal to or less than the minimum interprofessional salary, fixed at 641 euros; and if the affected person’s income exceeds this amount, only 30%, 50%, 60%, 25% and 10% of the second, third, fourth, fifth, sixth and following sections of the minimum interprofessional salary can be seized, “explains the lawyer José María Marqués. The amounts refer to net income , that is, once the withholdings of the Treasury and Social Security contributions have been deducted, and if a marriage has separation of assets, they are counted separately for each one of them. In addition, if the person whom they seize has children under their care or other family responsibilities, the sections that can not be seized can increase between 10% and 15%. “All this means that a person with two children and spouse who is unemployed and who earns 21,500 gross euros a year (1,516.65 euros net per month), even if they garnish it, will be able to keep 1,338.59 euros available every month to maintain . And if the salary is 50,000 gross euros per year, the unattachable part of the payroll would be 2,074.27 euros, “exemplifies the Insolnet specialist.

Marqués points out that it is important to bear in mind these unattachable amounts when negotiating with the bank a refinancing or an extension of the term of the mortgage, so that the amounts that are going to be paid are lower and can be satisfied even if there are other debts that trigger a judicial execution. And he points out that if one is seized above these limits, he can immediately request procedural nullity.

For some years now, the law allows insolvent people to suspend payments as if they were a company . At the time it was thought that to be able to apply the judicial contests in the insolvencies of the individuals would facilitate the reorganization of the domestic finances of those families that cross problems.

But, according to specialists in bankruptcy proceedings, this has not been the case. “It has failed because it is an excessively rigid, expensive and lengthy process to be able to solve the problems of the individual debtor; and the foreclosure of housing is not paralyzed by the presentation of a creditors’ contest, “summarizes José María Marqués. The bankruptcy process allows to open a negotiation with the creditors and can avoid cuts in the supply of light or water while the procedures last, but it has important costs, and not only economic ones . Among other things, because all the assets of that person are controlled and managed by a judicial administrator, who has to ask for authorization for any daily expenses, and creditors can know every euro that person enters or spends, so lose all privacy

Economically, the process requires paying a lawyer and an attorney, administrator’s fees and court fees, among other expenses.

 … the banks

If you can not pay the receipts of a loan, especially the mortgage, it is convenient to negotiate with the financial institution a deferment or a grace period. The negotiation margin depends on the bank or fund in question, the relationship it has with each client and the economic situation of each one. The solutions are usually tailored in each case but, in general terms, banks and savings banks currently offer a period of depreciation – that is, only the part of the interest corresponding to the interest is paid – and, sometimes, a total lack, that is to say, that for a time no fee is paid. The range of solutions varies from one entity to another. In BBVA, for example, the options range from the possibility of deferring two installments and adding them to the outstanding amount of the loan (a maximum of ten receipts can be deferred for the life of the loan), until 30% of the capital is left for a final fee which is paid at the expiration of the operation, extending the term or a shortage of up to 36 months in the amortization of capital, or a moratorium of half of the interest for 18 months. In La Caixa, for their part, they explain that some of their mortgages allow deferring the installments up to one year or re-dispose of the money that had already been amortized to meet the payment of current quotas. And Santander proposes unemployed customers or those who have lost more than 25% of their usual income a three-year moratorium on the mortgage’s capital, so that during that term only interest is paid and thus the fee to pay low significantly.

From consumer organizations, such as Ceaacu, warn that any of these measures increases the total cost of the mortgage, so they should only be used in case of need and after having given numbers on which is more advantageous or which facilitates more to be able to rebalance the family budget in the medium term. The economist Xavier Subirats points out that, regardless of the cost that the moratoriums and deferrals end up having, we also have to assess the relief that can result in a significant reduction in the monthly fee until one finds a job.

 … Treasury

Being unemployed does not mean to stop paying the Treasury. In fact, in the coming weeks will have to present the income statement for the income obtained last year, in which perhaps some families were not yet unemployed or charged more than one payer and now the IRPF settlement comes out to pay . In this case, they can split the payment and pay 60% when presenting the declaration and the remaining 40% before November 5. If they do not even have the liquidity to pay, or it is another tax that they must liquidate (for example, the inheritance tax for an inheritance), there is the option of asking the Tax Agency for a postponement before the voluntary payment period ends. .

From the consumer organization Ceaccu clarify that in the inheritance tax there are five months to request the postponement or fractionation, but in the donation and in the transfer of assets only 30 days. You must submit an application at the offices of the Tax Agency (or online if you have an electronic certificate) explaining the reasons why you can not pay. If the debt is less than 18,000 euros, there is no need to provide guarantees or endorsements, but interest will have to be paid -5.5% per annum- for the duration of the deferment , which is usually between six months and one year unless it is large amounts. But if the debt is very high you have to present real estate or other guarantees.

When what can not be paid are municipal taxes -the IBI (old tax), the circulation tax, the construction tax, the real estate surplus value or the garbage and sewage rates, for example-, the first thing that must be done is to inform oneself who manages them to know where the deferment can be requested and under what conditions. In Barcelona, ​​for example, there are more than 300 city councils that have delegated the management and claim of their taxes in the Provincial Council, and in that case it is with this administration that they have to deal with when they can not be paid. Ángela Acín, director of Tax Management of the Diputación de Barcelona, ​​explains that for debts under 1,500 euros the criterion is to grant installments or a deferral of up to twelve months; If the debt ranges between 1,500 and 6,000 euros, it can be postponed until a year and a half, and if it exceeds 6,000 euros, up to 24 months.

“If the person requests a longer term then we talk to the affected municipality to study the specific case of that debtor,” says Acín. The delay interest charged this year is 5%, unless the person submits an endorsement , which drops to 4%. In general, they do not ask for guarantees when the debt is less than 3,000 euros and it is wanted to defer less than 18 months.

 … basic services

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The margin of maneuver with companies supplying basic services such as electricity, gas, telephone or water is scarce and depends on each company. All ensure that, before cutting off the supply , try to talk to the customer to offer alternatives depending on the amount of debt you have and your history as a customer, if it is a habitual default or not. In the case of Aigües de Barcelona and Gas Natural-Fenosa, they point out that the alternative is usually to split the unpaid bill . This last company also offers a fixed payment plan so that the customer pays the same on each invoice, without surprises, and at the end of the year the difference between the amount paid and the amount consumed is settled.

Movistar, meanwhile, allows postpone the payment of the fixed telephone bill up to a maximum of 25 days, or divide it into three months paying interest provided that no other deferrals or subdivisions have been made in the last year. It also has specific rates for the unemployed, and allows one to three months to suspend the fixed telephone service so that the client only pays half the cost of the line, half the ADSL fee and the rest of the services that he has. But during that time you can not make or receive the calls . In the case of mobile, you can suspend the service for up to three months without paying a fee.

And what happens if someone does not pay? In the case of landlines, the line is suspended 12 days after the invoice is issued. Between 45 and 60 days later a final warning is given and, if the debt is not paid within two weeks, the line is canceled. According to Ceaccu, in the case of electricity , the company can suspend the supply two months after requesting payment from the customer, but must inform about the date from which the electricity will be cut off. If the debt is then settled, they must reconnect the service within 48 hours. In the case of gas, the deadlines to cut the service are the same but the refund must be in 24 hours. Aigües de Barcelona explains that when a customer has two consecutive invoices without paying they notify him by mail that they will cut off the water and if he does not pay in two days, the two pending receipts will cut off the supply, unless in the meantime there is any claim or claim.

 … the landlord

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Failure to pay rental fees means that the landlord will begin the eviction process. From Ceaccu they explain that the tenant can only stop this process by paying the pending rents if it is the first time, but not when he is a repeat offender.

… pension plans

Spending economic hardship is not incompatible with having money in a pension plan. The law only allows you to withdraw this investment in case of retirement, disability, severe dependency , death, serious illness or long-term unemployment. So in order to have the money invested in a pension plan because they have economic problems must be unemployed and have already exhausted the contributory benefits of the INEM or competent body. Only in that case can you go to the management entity of the plan, show that the requirements are met, and withdraw the funds.

… insurers

Regarding insurance, from consumer organizations explain that only fire insurance is mandatory if you have a mortgage on the house , and the vehicles that circulate. The rest of the policies, be they home, health care, studies, etc., can be abandoned when desired.


2.8% is the default rate of loans for home purchases

66% of Spaniards have cut the budget for holidays

7.91% is the bank default rate

62,366 million euros owed by mortgages to banks and savings banks

140,027 million euros add up to consumer loans

64% of households now buy less clothing and footwear

70% of households now consume less gas, electricity, water …

70% of families have reduced their spending on leisure

934 people declared insolvent (bankruptcy) in 2011