Loan disputes with banks

What is happening

Payments became irregular after a job loss or illness, and the bank has demanded the entire outstanding balance with interest and penalties within a few weeks. The borrower has no idea where the figure comes from or whether it can be challenged.

The borrower learns of the debt when bailiffs take money from a salary card: a court order was issued months ago that never reached them. Sometimes it concerns an old loan long since sold to another creditor.

A loan was taken out without the borrower's knowledge: a contract appeared in the online account, the money went to strangers, and the bank insists on payment, pointing to an electronic signature and a text-message code.

What the law says

• Consumer loans are governed by the Civil Code and the Federal Law No. 353-FZ of 21 December 2013 "On Consumer Credit (Loans)" (the Consumer Credit Law). The bank may demand early repayment of the entire loan for arrears if they have totalled more than 60 calendar days within the past 180 days.
• Penalties on consumer loans are capped: no more than 20 per cent a year if interest continues to accrue on the debt, and no more than 0.1 per cent of the overdue amount per day if no interest accrues for that period.
• The limitation period is three years and, for a loan repaid monthly, runs separately for each instalment. A court applies limitation only if the defendant raises it, so it must be raised.
• A court order is set aside if the debtor files objections to its enforcement within 10 days of receiving a copy (Code of Civil Procedure). If a copy was not received for a good reason, the time limit can be restored.
• A bank may assign a loan debt unless the contract prohibits it, but only to the parties listed in the Consumer Credit Law, such as other credit institutions and professional debt collectors.
• Judgments are enforced under Federal Law No. 229-FZ of 2 October 2007 "On Enforcement Proceedings" (the Enforcement Proceedings Law): deductions from earnings generally may not exceed 50 per cent, and certain property is exempt from enforcement.

What we do

• We request the bank's statement of the debt and the account history and check how payments were allocated and where the interest, penalties and fees came from.
• We check the limitation period for each instalment and whether the demand for early repayment was lawful.
• We prepare objections to the court order and an application to restore the time limit if it has been missed.
• We represent the borrower in court: challenging the figures, pleading limitation and asking for the penalty to be reduced.
• For loans taken out by fraudsters, we gather the evidence, send notices to the bank and prepare a claim that the contract was never concluded or is invalid.
• We check whether the debt was lawfully assigned and whether the new creditor has standing.
• We follow the enforcement proceedings: protecting the subsistence minimum and lifting attachments on a sole home and funds exempt from enforcement.

What we will need from you

• The loan agreement, repayment schedule and individual terms.
• The bank's demands, the court order, statement of claim or judgment, if any.
• Proof of payments: receipts, account statements and certificates.
• Notices of assignment and letters from the new creditor.
• Bailiffs' orders and details of attachments and deductions.
• If the loan was taken out without you: your reports to the bank and police, acknowledgement slips and transaction statements.