Why do microfinance organizations go to court? Which microfinance organizations sue debtors? Do MFOs have the right to sue debtors?

Microfinance organizations issue loans to almost everyone, even clients with a bad credit history. But this does not mean that unscrupulous borrowers may not repay money: MFOs have many legal opportunities to collect the debt. Therefore, before taking out a loan, you need to ask which MFs sue debtors and under what circumstances.

MFOs specialize in providing microloans at high interest rates. On average - 2% per day of the original amount borrowed. Typically, the loan does not exceed 15-30 thousand rubles and is issued for a month or six months. If the client needs a larger amount, the period may be extended. Managers calculate interest in advance, divide the amount into equal parts, which must be paid after a certain period of time. Mostly once a week. If this is not done, a fine will accrue just two days after the delay, so if it is not possible to repay the debt on time, it is better to renew the agreement on a paid basis, extending the loan term.

If the debt period is too long, the MFO can legally sue the borrower for violations of the terms of the loan agreement. However, litigation is not a common practice due to a number of reasons:

• There are no representations and legal support in the region where the debtor lives;
• The debt is not too large: the loan amount has already been repaid, all that remains is to receive interest and penalties;
• The borrower has no income, so a positive decision in favor of the plaintiff does not guarantee a quick return of the money;
• Stopping the accrual of penalties after filing a claim, the possibility of reducing the debt by reducing penalties.

MFOs do not sue because it is easier and more profitable to sell the debt to collectors. For the debtor, this is not the best option, given the working methods of collection companies, which often balance on the edge of the law, extracting debt from the client. Moreover, they start work immediately.

Grounds for going to court

In the first two to three months after a delay in payments, the microfinance company will not sue. One of the reasons for this is penalties and interest, which accrue daily, increasing the debt. MFOs file a lawsuit when the debt exceeds a certain amount.

The microfinance organization can easily prove that it is right, since it has on hand all the necessary documents with the borrower’s signatures.

It is a mistaken belief that an MFO will refuse to sue because of legal costs. If the amount of debt does not exceed 20 thousand rubles, the state fee for filing a claim is up to 4% of the amount of debt. Moreover, if the verdict is in favor of the plaintiff, the debtor is obliged to pay court costs.

List of microfinance organizations that sue their clients

Any microfinance organization can sue an unscrupulous borrower. Among them are such organizations as:

• Moneyman;
• Urgent money;
• Turboloan;
• E-cabbage;
• Webbankir;
• Viva Money;
• MigCredit;
• Zaimer.

If an MFO has already sued you, what are your prospects?

If an MFI has filed a lawsuit, there is no need to avoid a court hearing, since failure to appear is not an obstacle to the consideration of the case. It is worth noting that litigation is even beneficial for the defendant, since after filing a claim, penalties and interest cease to accrue.

The defendant can use a court case with a microfinance organization to his advantage by filing an application to reduce the amount of debt if its size significantly exceeds the borrowed funds. Typically, the reduction occurs due to the amount of the penalty, since interest is calculated according to the concluded agreement and the judge does not have the right to cancel it.

Thus, the opinion that the court will completely release the debtor from debt obligations is erroneous. The debt will be repaid through wages or foreclosure of the borrower's property. Only housing and basic necessities cannot be confiscated.

If the plaintiff or defendant disagrees with the judge's verdict, an appeal is possible. The debtor can challenge the decision only with serious grounds: statements about the lack of funds to repay the debt will not be taken into account. An appeal can be filed if errors were made during the consideration of the case. It could be:

• Lack of evidence to make the right decision;
• Incorrect application of legal norms;
• The defendant was not notified of the date of the court hearing, which is why he did not come to court;
• There is no record of the court hearing;
• Lack of signatures on the court order.

If an appeal is not filed within 30 days, the decision comes into force and the bailiff service takes over the case. In this case, it is necessary to pay for their work. Bailiffs initiate enforcement proceedings.

In order to comply with court decisions and collect the debt in favor of the plaintiff, bailiffs have the right to seize the borrower’s property and bank accounts, prohibit them from leaving Russia and driving vehicles.

If there is money in the accounts, it will be written off in favor of the microfinance organization. If the defendant works, a writ of execution is sent to his work, after which 20% of the salary begins to be debited to the creditor’s account. If there is a complete lack of funds to pay off the debt, the property is seized and sold.

How to win a case - contact a lawyer or defend yourself

The case with microfinance organizations usually ends in favor of the latter. The defendant can win the case only if he contacts an experienced lawyer who is well versed in the legal intricacies. On his own, without having the necessary knowledge, the defendant will not only not be able to win the case, but also to soften the terms of the loan agreement. As a result, the debt will have to be repaid in full.

After examining the documents, he may find that:

• the contract is unenforceable due to enslaving conditions;
• the structure that provided the loan did not have the right to do so;
• the client is not capable of taking responsibility for his actions;
• various threats from a credit institution that have been officially documented.

The defendant must take into account that he will still have to pay for the services of a lawyer and court costs, so one must be prepared for financial waste if the MFO goes to court.

Installment plan and deferment of judgment

If the defendant can convince the court of his insolvency, the judge may grant a one-year deferment. Also, during the trial, you can come to a settlement agreement with the MFO, which is concluded in court and becomes binding on both parties. After this, the claim is withdrawn and the case is stopped.

The settlement agreement provides for the defendant's agreement to repay the debt if the plaintiff agrees to debt restructuring. It should be noted that many microfinance organizations agree to this option and are often ready to reduce the penalty and even write it off completely.

Often, lenders will offer to issue a new loan, which will include the debt along with interest, which must be repaid. Naturally, the amount in this case will be larger and the interest will be higher. The debt is divided into equal parts, which allows you to evenly distribute the load; the period for full payment can be extended.

Bankruptcy

There is another opportunity to pay off your debts - to declare yourself bankrupt, for which you should file an application with the court. After this, a manager is appointed who receives all the data on the borrower’s financial transactions and the right to manage his money. As a result, the borrower is left without property, but pays off his debts.

Limitation periods

The microfinance organization has the right to sue for debt collection within three years after the last payment was made. After this time, the debt can be written off beyond the “statute of limitations”, but only through the court. Theoretically, this is possible if the debtor is suddenly forgotten, which in practice is extremely rare.

Is it possible to avoid paying off debt?

If the statute of limitations has not expired, the debtor may be excused from paying the debt upon death. If his heirs do not inherit the property, they may not pay their loan obligations. If they enter into inheritance rights, at the same time they take on the debt of the deceased and are obliged to repay the loan.

The question of how to legally sue microfinance organizations is not idle for many citizens. Borrowed 5,000-10,000 thousand rubles can easily turn into six-figure amounts of debt. The amount of daily interest on the loan is added to the body of the loan, penalties are charged every day for late payment, a fine - every day the size of the debt becomes more and more frightening.

In many ways, this situation arises for the simple reason that the debtor does not take part in the legal process, often ignoring court hearings. At the same time, actively expressing your own arguments and documenting them can help write off the lion's share of illegally accrued interest and penalties.

What to do if you have nothing to repay a loan with

So, the day for repayment of the loan is approaching, but there is nothing to repay the debt with. First of all, in such a situation, the borrower must contact the microfinance organization with a written application to defer payment for a certain period. The application must contain information that the borrower is temporarily unable to fulfill debt obligations, and must also indicate the reason for the inability to make payments - illness, dismissal from work, etc. It is recommended to attach to the application documents confirming the veracity of the client’s words - a certificate from a doctor, a copy of the employment record with a notice of dismissal, etc.

Microfinance companies in most cases agree to extend the loan for a fee. The borrower gets the opportunity to gain time (raise the required amount), avoid a decrease in the credit rating, as well as the accrual of fines and penalties. At the same time, he must understand that the amount of debt will increase due to prolongation.

It is important to draw up an application to extend the loan term in two copies: give one to the lender, and keep the second for yourself, having previously received a note from the microfinance organization that the application has been accepted.

Where to complain about microfinance organizations

A growing debt to a microfinance company may also arise as a result of the accrual of interest and fines not provided for in the agreement, as well as as a result of other illegal actions against the borrower. In this case, the latter can seek help from one of the following services:

• Financial Ombudsman

It is a body of extrajudicial proceedings between an individual and a financial organization. You should contact the Ombudsman in cases such as illegal calculation of interest and fines, unlawful actions of debt collectors, etc.

All complaints must be submitted in writing, and the facts must be documented.

• Federal Antimonopoly Service

If the borrower is faced with a unilateral change in the terms of the contract, a restriction on early repayment of the loan, or the imposition of a fine for early repayment, he can file a complaint with the antimonopoly service. An inspection will be carried out against the creditor, and if the facts of violation are confirmed, an administrative fine will be imposed.

• Rospotrebnadzor

You should contact this authority for help if, in the process of using a loan, hidden fees and interest are discovered, about which the borrower was not notified before signing the agreement; the terms of the contract are written in small, unreadable font.

• Central Bank

You can leave a complaint directly on the Central Bank website by filling out a special form. As practice shows, appealing to the Central Bank turns out to be much more effective than complaints to the antimonopoly service or Rospotrebnadzor.

Complaints to the Central Bank, the antimonopoly service and Rospotrebnadzor can be filed in parallel with lawsuits against microfinance organizations. If the case is before the Ombudsman, no legal proceedings can take place until the case has been reviewed and closed by the Ombudsman.

Trial

The trial may begin in one of 2 cases:

1. The MFO files a claim against the debtor;
2. The debtor files a claim against the creditor company.

In any case, the borrower must take an active position and be ready for dialogue with the court. After the MFO transfers the case to court, the defendant (debtor) will receive a subpoena, which will indicate the place, date and time of the upcoming trial. The summons is sent to the place of registration. If the borrower lives at a different address that he did not indicate when applying for a microloan, then responsibility for failure to receive the summons lies with him. In other words, not knowing about the upcoming hearing, the debtor will miss it. It is enough to ignore the summons twice for the hearing to take place without the participation of the defendant. In this case, it is useless to count on the protection of your rights.

Many debtors are afraid of going to court, but they must learn that it is through litigation that they can significantly reduce the amount of debt and choose the optimal repayment schedule for themselves. It is these 2 goals that the borrower should pursue when going to court or filing a counterclaim.

The real opportunity to reduce the amount of debt is to achieve a reduction or elimination of penalties. This can be done by referring to Article 333 of the Civil Code of the Russian Federation, according to which the penalty must be proportionate to the consequences of violating the debt obligation.

In other words, if the debtor took 10,000 rubles and was late in payment for 3 months, during which he was assessed a fine of 90,000 rubles, then such a penalty should be considered disproportionate to this violation.

The borrower will have an additional argument if the company, in addition to a fixed fine for late payment, also calculates penalties on a daily basis as a percentage of the debt amount. This is exactly what happens in real practice. The defendant must draw the court's attention to the fact that the law does not provide for two types of punishment for the same violation. Therefore, the court must waive either the fixed penalty or the accrual of interest.

Finally, if the MFO filed a lawsuit a year or two after the loan due date, this may be considered an abuse of right. According to the law, a creditor can sue within 3 years and his claim will be satisfied. However, the borrower must insist that the company deliberately delayed taking the case to court in order to “rack up” as much interest as possible. In making this argument, it would be good to provide the court with a statement from the borrower, where he notifies the MFO of the impossibility of paying the debt. That is why, as soon as you realize that there is nothing to pay on the loan, you should immediately notify the lender about this in writing.

Arguments and counterarguments

In addition to preparing claims and the necessary certificates and documents, the borrower should think through the objections with which he will cover the arguments of the microfinance company in court.

The table below shows the most common arguments put forward by MFOs to protect their rights (left column), as well as counter-arguments from the borrower (right column).

An important point is that if violations are detected in the activities of an MFO, recorded by Rospotrebnadzor, the Central Bank or other authorized bodies, the relevant documents should be provided to the court. This will be the best evidence of the organization's abuse of rights.

Is it possible to reduce the interest rate through the court?

So, the opportunity to reduce or cancel the penalty for late payments on a microloan is legal and real. However, the huge amount of debt is largely formed due to interest charges for the daily use of the loan. Naturally, the borrower is interested in whether it is possible to reduce the interest rate through the court.

It should be noted that this is very difficult to do, since the court is based on the voluntary nature of receiving a loan. Indeed, no one forces the borrower to take a loan at the specified interest rate; he signs the microfinance agreement of his own free will.

But if you prove that the agreement between the parties was made in a difficult life situation for the borrower, when he could not adequately assess the degree of risk of non-repayment of the debt, you can count on a reduction in interest.

The debtor’s task is to have the part of the agreement regarding the procedure for calculating interest declared invalid. It is recommended to rely on the following facts:

• The loan agreement is enslaving for the debtor. He was forced to agree to such loan terms only because he was in a difficult life situation. Moreover, the lender was aware of the difficult set of circumstances and took advantage of the situation for personal gain.
• The amount received was needed to solve vital needs. These include the need for urgent treatment, detention of minors, etc. In simple terms, you need to put pressure on pity, pointing out that the money was needed urgently, but there was nowhere to get it. Naturally, such a need should be documented.
• The interest charged by the lender is inadequately high, since it does not correspond to either the Central Bank refinancing rate or the inflation rate. However, this is a rather weak argument, since the MFO will raise an objection to it regarding freedom of contract.

A request to reduce interest rates is rarely granted by the court, but this does not mean that it is not worth trying.

Appealing a court decision and postponing its execution

After a court decision is made, both the borrower and the lender can appeal it within 30 days. The borrower must know the following rules for appealing a court decision:

• He only has 30 days to appeal;
• The complaint is filed through the same court that made the decision;
• When appealing, it is unacceptable to bring forward new arguments that were hidden during the consideration of the case in the first instance;
• If the deadline for appeal is missed for valid reasons, you should document them before the court and insist on reinstating the missed deadline.

If the borrower has done everything correctly, the amount of his debt will decrease significantly. However, joy from this is premature if there is not the required amount to pay off the debt. Such a situation must be anticipated at the stage of trial and a petition must be filed to defer the execution of the court decision.

This opportunity is provided in accordance with Article 203 of the Civil Procedure Code and implies permission to defer the payment of debt for a certain period (usually no more than 1-1.5 years).

To obtain a deferment of execution of a court decision, it is necessary to document the impossibility of currently paying the amount of the debt due to life circumstances beyond the control of the borrower. The latter may be as follows:

• Health problems (both for the borrower and his close relatives);
• Minor or incapacitated dependents;
• The need to purchase expensive medications;
• Job loss.

In some cases, it is important not only to prove to the court the impossibility of immediately executing the court decision, but also to convince that after a specified period the situation will change for the better. This applies primarily to deferments due to job loss. The borrower must provide a copy of the employment record with the appropriate notice of dismissal, and also register with the labor exchange, providing the court with certificates confirming this.

A request to defer the execution of a court decision can be filed both after and before the court decision is made. The borrower’s task is to convince the court that he is ready to repay the amount of debt and adequate interest.

Settlement agreement

A settlement agreement is a compromise between the MFO and the borrower, which can be reached at any stage of the legal proceedings before the court makes a decision. The settlement agreement must be certified by the court.

An MFO rarely initiates a settlement agreement, but if this happens, the company often tries to offer the borrower unfavorable conditions. For example, it cancels the amount of the penalty, and in return offers to pay a lighter version of the debt within a few days. In fact, the borrower himself can achieve a reduction or cancellation of penalties, as well as apply for a deferment of the execution of the court decision, thereby postponing the deadline for repaying the debt. It turns out that such a settlement agreement does not bring any benefit to the debtor.

The borrower can also initiate a settlement agreement. To do this, he must prepare a corresponding proposal in 3 copies. If its terms turn out to be acceptable to the MFO (a representative of the organization can evaluate them directly in court), the court will approve this agreement.

One of the mandatory requirements when drawing up a peace agreement is that it must not contradict the law. Naive borrowers often confuse this concept with their own benefit. It should be understood that a legal settlement agreement is not always beneficial for the debtor, and therefore he has the right to reject it.

The example of the above version of a settlement agreement from an MFO certainly does not violate the requirements of the law, but does not bring benefits to the borrower.

When signing a settlement agreement, you should adequately assess the consequences of violations under it. If the obligations prescribed by the agreement are not fulfilled, the MFO has the right to request a writ of execution and hand it over to the bailiff. The latter will open enforcement proceedings and will have the opportunity to seize the debtor’s financial account and property, seize his vehicle, and block exit from the country.

What is a court order?

A court order is a single decision of a judge on a creditor's application to collect the amount of debt from a borrower. In this case, the case is conducted without notification or involvement of the parties. For the borrower, this means that the entire amount of the debt will be collected from him, including huge interest and penalties.

Since a court order is an executive document, the MFO has the right to turn to bailiffs to seize the debtor’s property.

An appeal against the order will help prevent such developments. This can be done no later than 10 days from the date of receipt of the order. If this deadline is missed for a valid reason, this fact should be documented and insist on extending the appeal period.

The main goal that the debtor must pursue when filing a complaint is to cancel the court order and initiate the commencement of enforcement proceedings. The latter is preferable because the borrower has the right to attend the hearing and defend himself, as well as file counterclaims against the lender.

Bankruptcy Law

If the loan amount exceeds 500,000 rubles, an individual may declare himself bankrupt. However, this procedure is quite complex and requires the debtor to go through several stages. At the first of them, the borrower will be asked to restructure the debt, which, under the terms of the microcredit agreement, essentially means dragging the debtor into even greater bondage. If there is a refusal to restructure the debt, the conflicting parties may try to conclude a peace agreement. If consensus cannot be reached, the court satisfies the MFO's claim, which means seizure of the property for the borrower. At the same time, the lender cannot take away the borrower’s only home.

If the debtor has received bankruptcy status, the court appoints a financial manager for him. The latter has the right to dispose of the bankrupt’s property. And transactions carried out without a manager are considered illegal and are cancelled. The services of a financial manager, which is 10,000 rubles and 2% of the amount of satisfied claims, are paid by the bankrupt.

For many debtors, bankruptcy seems like a convenient loophole through which they can “sneak away” from paying off the loan. In fact, such a procedure has a number of serious consequences:

• During the 5-year period, a bankrupt cannot;
• When subsequently receiving a loan (after 5 years), the agreement must indicate the fact of bankruptcy of the borrower, which negatively affects the credit limit and the level of the interest rate;
• Information about bankruptcy appears in your credit history, which significantly reduces the possibility of obtaining loans in the future;
• For an individual entrepreneur, bankruptcy means cancellation of the debtor’s state registration as an individual entrepreneur, as well as all issued licenses for a period of 5 years.

Finally, attempts at deliberate bankruptcy, as well as deliberate concealment of property, are punishable by criminal law - the violator faces up to 6 years in prison.

Memo for those who are suing microfinance organizations

1. Notify the MFO in writing of the impossibility of paying the debt. Document the reasons for delays, ask for loan extension, credit holidays;
2. Do not be afraid to contact regulatory authorities if you suspect a financial organization has violated its own rights;
3. Do not avoid litigation: in response to the MFO’s claim, file a counterclaim, in which you insist on reducing or canceling penalties. Don’t be afraid to stay ahead of the company and be the first to sue;
4. Do not refuse to pay the loan amount and reasonable (!) interest on it. Insist on the enslaving terms of the loan, as well as one’s own inability to assess the financial situation at the time of signing the agreement due to difficult life circumstances;
5. Carefully study and analyze the proposal for a peace agreement;
6. It is not possible to prepare a petition to defer the execution of a court decision if it is not possible to pay the amount of debt assigned by the court within 30 days.

In microcredit structures, as in large financial companies, there are so-called “white” and “black” lists of borrowers, the former are responsible payers who are provided with loyal conditions for further cooperation. The latter are characterized by numerous arrears and a continuously increasing (due to interest rates) amount of debt.

MFOs and debtors. Litigation

In the event of a collision with an unscrupulous client who ignores all norms and loan repayment terms, the microfinance organization can take the following measures:

• Penalties established under the loan agreement;
• Replenishing your credit history with negative entries that can ruin the reputation of a responsible payer;
• Calls from microfinance organizations with demands to repay the debt in the established amount and taking into account interest;
• If you “ignore” all of the above points, creditors will transfer the loan case to a collection agency, or go to court.

Litigation (as well as turning to collection services) is an extreme measure resorted to by structures issuing microloans. In fact, microfinance organizations, as a full-fledged lending system, have the right to sue malicious debtors. Thus, we will answer the question “can microloans be sued?” Yes, they can.

Indeed, the statistics of claims filed by microfinance organizations has increased significantly. Often, the judicial process is initiated bypassing the stage of “peace negotiations”. In order to avoid reaching the stage of “court with an microfinance organization,” before contacting a microfinance organization, you should think about your financial situation and take into account the real possibilities in the context of strict debt repayment deadlines. Often, negligence in relation to “quick loans” (on the part of the population) leads to complete financial collapse and lengthy legal proceedings.

MFOs solving the problem in court

In order for the expected to coincide with the real state of affairs, it is necessary to understand which microfinance organizations file lawsuits against debtors, and which microfinance organizations should not be expected to file a claim. If you work with microfinance organizations, in terms of statistics on litigation, de jure, this method of debt collection is practiced to a greater extent by large players in the lending sector, since here we are talking directly about the reputation and quality of the loan portfolio.

De facto, regarding the questions “are microloans filed in court?” and “which microfinance organizations file lawsuits?” There are quite a lot of answers, namely microcredit structures. However, even taking into account a single microfinance company, due collection can be carried out in several ways; however, it is worth waiting for a meeting in court and looking for information on the topic “how to sue a microfinance organization” in such cases as:

• The concluded agreement is collateral (the guarantee is the movable/immovable property of the borrower), in such cases, collection in court is the fastest way to transfer property into the ownership of the organization;
• The loan amount is more than 500 thousand rubles (the microfinance institution may “go into the red”, since the client has the right to declare himself bankrupt);
• Debt repayment is completely ignored;
• The company's regulations do not provide for joint work with collection agencies; the decision is made exclusively within the framework of current legislation;
• Sale of debt to debt collectors who practice debt collection in court;
• The debtor owns valuable property.

Mpho takes the case to court. Next steps

After the immediate stage of initiating the case, the debtor is given a subpoena. Further ignoring is pointless: the court decision will be made at the currently known place of registration of the debtor. Refusal to appear in court will also not interfere with the trial and sentencing.

In fact, if the microfinance organization has provided a complete evidence base indicating the existence of an outstanding debt, the case will “play” in favor of the microfinance organization. All the defendant can count on when he appears in court is to file a motion to reduce the penalty interest. If a clear discrepancy between the interest and the principal amount of the debt is revealed, the court has the right to regulate the amount of interest in its own way.

Within 30 days from the announcement of the decision on the claim of the microfinance organization, the defendant has the right to appeal the judicial outcome, of course, on serious grounds (lack of funds is not a serious circumstance). You can appeal a court verdict if significant violations were noticed during the process:

• The MFO’s evidence base was incomplete, but the court decided on the terms of loan repayments;
• The rules of law were applied incorrectly or ignored;
• The trial was carried out without key representatives of the parties (due to lack of proper notice);
• Lack of trial protocol and signatures on the decision itself.

If the listed violations are detected, the court of appeal has the right to note/change the decision made in the case.

Execution of the decision and payment of the debt

It also happens that even after the decision has entered into legal force, the debtor-defendant continues to ignore the fulfillment of debt obligations. In this case, the bailiff services will take over the case, followed by the initiation of enforcement proceedings. As part of this, bailiffs carry out measures to enforce a court decision. Exactly:

• Seizure of the property and account of a malicious debtor (if funds are available, they are written off in favor of repaying the debt in the microfinance organization; in the absence of the required amount, the property is confiscated and subsequently sold);
• Ban on travel outside the Russian Federation;
• Deprivation of a driver's license with confiscation of vehicles.

As for trying to avoid paying debts, there are few options. They come down to two parameters:

• Death of the borrower (acts as a serious reason for canceling the contractual force in the event that the debtor’s relatives refuse the inheritance; otherwise, the obligations for loan repayments are assigned to them).
• Expiration of the statute of limitations. In theory, an outcome is possible in which the microfinance organization simply forgot about the borrower, and 3 or more years have passed since the conclusion of the agreement (in this case, the creditor will no longer be able to file a claim).

Let's consider several options for getting out of a critical situation without bringing the case to court. There are few actions in such situations that go out of control, but:

• Extension of contracts with organizations;
• Deferment of payments (if the client provides documents confirming a deterioration in their financial situation);
• Loan restructuring.

It is worth noting that 95% of microcredit organizations offer to extend the agreement. You just need to pay the accumulated interest and sign an agreement to postpone the payment terms. It is much more difficult to obtain a deferment in payments and restructuring, since consideration of an application to revise the terms of the loan agreement (due to a changed financial situation) will take quite a lot of time. It is not a fact that such a statement will be approved.

Conclusion

Despite the criticality of the situation, there are ways to get out of the “debt hole”. Contacting a lawyer can also be beneficial; a specialist will review your case and develop an algorithm for a legal way out of the crisis. Help in repaying the loan from creditors, lawyers, the state and also from the collectors themselves is quite real, since court cases in disputes of this kind are no longer categorically one-sided. Decisions become flexible and the position of the defendant is taken into account. If the debtor's situation has really gotten out of control, the case is considered in favor of the borrower, with the release of his exorbitant amount of overdue interest.

If you take out a microloan, secretly hoping that you can avoid paying it off without incurring any punishment, you are mistaken. The first, and, of course, main goal of an MFO is to earn money, and certainly not to act as a philanthropist for someone. It should be understood that microloans are sued by debtors quite often, however, they do this specifically: when the amount of debt has already significantly exceeded what was originally taken out. Let's try to figure out why this happens below.

Sanctions of microfinance organizations in relation to defaulters

If you think that a court order for a microloan will be issued to you almost the next day after the payment is late, you are mistaken. The MFO itself is not very interested in resolving issues with debtors in court. Why - more about this a little later, but now a few words about how MFOs behave with debtors and what the latter should expect if there are arrears. So, if you are a client of an MFO, but at the same time violate your obligations, you can expect:

• Possible increase in the interest rate on the loan;
• Accrual of a fine for each day of delay;
• Accrual of a general late payment penalty, the amount of which will be determined by the loan amount;
• Selling debt to collectors;
• Trial.

As you can see, the participation of the court in matters of debt on microloans is in the very last place. And this is not the MFO’s concern for your comfort, as it may seem at first. In itself, the answer to the question of whether microloans are filed in court will be positive, but the point is when do they do this and why do they delay until the last minute?

Is it profitable for an MFO to sue a debtor?

Do microloans go to court? Many people quite reasonably ask this question, because they do not understand why microfinance organizations have so many debts, but so little is heard about litigation related to this. The explanation for this is quite simple: to date, the vast majority of trials held against MFO debtors have ended in a decision that is beneficial specifically for the borrowers. In general, there are several main reasons why a microloan, or rather the person who issued it, will file an application with the court only as a last resort:

1. The first and most important reason is that from the moment the court takes over the case, all kinds of changes stop, such as an increase in interest, the possibility of imposing a fine, etc. Consequently, if the defaulter is not too malicious, then the MFO has a chance to make good money by adding more and more penalties and fines to the amount of his debt, which he eventually pays anyway.
2. Loyalty of the court to debtors. Be that as it may, judges are also people, ordinary citizens of the Russian Federation, among whom rebellion against the predatory conditions of microfinance organizations is a common occurrence. Therefore, judicial practice most often, if not completely eliminates interest on microloans, then certainly reduces it to a minimum. Of course, the MFO will not lose, but it will not receive the desired profit either.
3. A court decision is not a guarantee that the MFO will get its money back. Yes, a court decision may result in an inventory of the debtor’s valuable property in favor of the microfinance organization, but where is the guarantee that this property itself will be sufficient?

These are the main reasons why an application to the court for a microloan for which payment is overdue is not filed immediately. However, this does not mean that you can relax and not think about how to fulfill your loan obligations.

MFO filed a lawsuit: what to do?

All that is said above does not mean at all that if there is a debt for microloans, no one will want to sue the debtor. They serve, at least in order to return what they have, and if they are lucky, they can also earn money. What are the actions of the debtor in this case?

• Appear at the court hearing, according to the information in the provided court summons. There is absolutely no point in lying that you didn’t see it, didn’t take it in your hands, and in general, this is the first time you’ve heard that someone is owed money and he doesn’t like it too much. If the summons was sent in compliance with all the necessary formalities at your place of registration, it will be almost impossible to prove to the court later that you did not see it.
• Avoiding appearing at a court hearing will do you absolutely no good. It is better to find out how to reduce interest on a microloan in court, or convince authorized persons there that you are not a malicious defaulter, but a victim of circumstances. If you do not appear at the trial, a decision will still be made, but in whose favor is a big question.
• If you do not agree with the decision made at the court hearing, you can appeal it.

To appeal does not mean to refuse to comply without doing anything. If you think that the decision made is unfair, apply for a microloan to the court, or more precisely, to the microfinance organization.

Appealing a court decision

If, by decision of a court order, a microloan and all the fines and interest attached to it are ordered to be returned, this does not mean that the decision will have to be complied with. And since the lack of money to pay is not a reason to write to the Supreme Court about microloans and their predatory policies, you need to look for other ways to solve the problem. There are several of them, but they all boil down to proving that the court order initiated in relation to the microloan was issued after a meeting that had obvious procedural violations:

1. Insufficient evidence from the MFO about violation of the payment schedule.
2. Incorrect application of legal norms.
3. Absence of one of the key participants in the process.
4. Lack of minutes of the court hearing.
5. Absence of at least one required signature on the protocol.

If you can prove that one or more of the listed violations occurred locally, feel free to submit a review of the case.

Can microloans be sued if they fail to fulfill their loan obligations for a long time? Of course they can. Another thing is that this is the last step, and before they file microloans in court against the debtors, they persuade them or try to collect their debts using the services of collectors. With regard to MFOs, we can safely say that a positive answer to the question of whether microloans can be sued for a debtor is a real salvation.

Many borrowers who have contacted microfinance organizations, the terms of the agreement with which are such that only a person in the most extreme situation is able to give consent to them, are interested in the question: what should I do if the microfinance organization sues me? Can an MFO sue a debtor? A source of doubt that is often observed among people who use the financial services of microfinance organizations is the observation that microfinance organizations have not recently filed a lawsuit for every reason that a loan payment was late.

Well, if this was the case recently, today the number of lawsuits initiated by MFOs is steadily growing. MFOs often file claims directly in court, bypassing the pre-trial settlement stage. In this regard, it is extremely important to find out Do microfinance organizations sue debtors?, in which cases it is worth waiting for a claim, and in which MFOs will not file a claim, and which ones file claims and which ones do not.

MFOs do not file lawsuits against debtors. Why?

The difference between and banks is catastrophic. It would seem that both of them give out money at interest. Only for some reason banks, before approving a loan, ask you to provide them with a bunch of unnecessary documents. But the interest rates of banks are not comparable with the interest rates of microfinance organizations. In MFOs they are not just high, there they are unreasonably and immeasurably high.

In addition, microfinance organizations issue small amounts for short periods of time; they impose practically no requirements on borrowers other than having a passport. And there are a lot of MFOs themselves, which is why there is fierce competition among them.

Because of this, MFOs strive to occupy all existing niches and create new ones. Thus, they are actively developing in the environment of online loans through electronic payment systems. For some organizations, online microfinance is the only area of ​​work; for others, it complements existing areas of work with the population. Some microfinance organizations have reached the interregional and federal levels and represent large microfinance networks.

If the microfinance organization does not sue the debtor for delay and debt collection, taking into account fines and penalties, this may be due to reasons such as:

• The borrower's debt is not so great as to require legal costs. And if the principal amount of the debt (the body of the debt) has already been repaid, and only the amount of interest and penalties remains outstanding, then taking into account the likelihood of receiving a court decision to reduce the debt by the amount of the penalty, the meaning of this action tends to zero.
• A specific MFO in your region does not have official representation and legal services, and the MFO is guided by its concerns about the cost of supporting the legal process.
• The debtor has no income and property, which does not promise the creditor any benefit even if he wins.
• The confidence of MFO representatives in a pre-biased attitude towards their activities on the part of judges and in the support of the borrower by the court, which often leads to a forced reduction in the level of claims of the microfinance organization to a minimum.

In addition, the unreasonably high interest rates and fines applied by MFOs to late payments to borrowers allows them to cover losses from debtors at the expense of bona fide clients.

It is also necessary to take into account the fact that the MFO receives the main money in the form of interest, fines and penalties, thus, taking into account the fact that the loans are issued insignificant amounts, which are repaid by the borrowers in the first months, and then the MFO receives a net profit, which does not require overhead or any costs. Thus, microfinance organizations can afford to write off certain debts as unrecoverable.

As they develop, MFOs strive to reduce the likelihood of such outcomes to zero, for which a scoring system for potential borrowers has been created and improved, with the help of which, by analyzing credit history databases, MFOs create blacklists of high-risk clients to whom they will not issue a loan under any circumstances.

In this way, MFOs manage to reduce the risk of their activities. MFOs strive to actively attract loyal clients through discounts and other support programs. Thus, a system that attracts money with virtually no investment is stable and can withstand quite large losses almost unnoticed.

In what cases and when can a microfinance organization sue a debtor?

At the beginning of the article, we referred to statistics that show an increase in lawsuits from MFOs, which suggests that MFOs are trying to use their right to seek debt repayment, so there will most likely be hopes that you will not be sued vain.

How to build a line of defense if an MFO sues you?

The first thing you need to do is stop and evaluate, establish the minimum court decision that will be satisfactory for you. Next, you need to create a step-by-step plan to achieve your goals.

In what ways can you achieve a satisfactory outcome?

1. You can try to resolve the issue with the microfinance organization without court, that is, come to an amicable agreement, if you think that such a development of events is more beneficial for you than participating in the trial. During the negotiations, you can emphasize your readiness to repay the debt, and the only thing you ask from the MFO in response is to create on your part some conditions under which repayment will become possible for your side. We are talking about debt restructuring, and you have every opportunity to agree with the MFO on this path, especially since most MFOs are ready to take such a step even if the legal process has begun. You can propose to reduce the amount of the penalty to a minimum or even write it off completely. You may receive a counter-offer from an MFO to issue you a new loan so that you can close the old one. You also have the right to agree on adjustments to the payment schedule, including revising the loan terms upward and revising the amount of monthly payments to more evenly distribute the financial burden. If you agree on new terms and they satisfy both parties to the contract, you can sign a settlement agreement, which, from the moment it is approved by the court, becomes binding on the parties. Once this happens, the claim is withdrawn and the case is dismissed.
2. You can also choose another path: do not enter into agreements with microfinance organizations and seek to reduce the amount of debt in court. With this option, it becomes extremely important for you to provide all the evidence that you have indeed experienced a change in your financial, family or life situation, as a result of which you can no longer fulfill your obligations under the contract on the same terms. You can achieve a reduction or complete exclusion of penalties from the requirements of the microfinance organization. It is also possible to seek a reduction in the amount of interest, especially since starting from January 2017, it is legal for late payments to repay microloans. This measure prevents the uncontrolled growth of interest debt.
3. You also have the right to demand that the contract be declared invalid due to its servitude. The likelihood of such an outcome is low, due to the fact that the legislation has already introduced some restrictions on the activities of MFOs. For an accurate answer to the question of whether it is worth moving in this direction, you will need to consult a lawyer who specializes in protecting the rights of debtors to repay debt from microfinance organizations.

In any case, you need to make attempts to resolve the issue without leaving it to chance. If the amount of claims from the MFO does not exceed half a million rubles, the MFO will apply to the magistrate's court with an application to issue a court order.

The order is issued without the participation of the parties within 10 days, so most likely it will not be issued in favor of the borrower. The borrower must promptly file an application to cancel the court order due to disagreement with it. If you do not have time to do this on time, your chances of writing off the penalty and reducing the amount of debt will be minimal. Otherwise, the order will be canceled and the MFO will have only one option: to file a claim in the court of first instance, which gives you the opportunity to turn the process in your favor, especially if you act not independently, but through a competent lawyer.