Loan restructuring part 2 – practical issue

What steps must the borrower take to restructure the loan?

First of all, it is the borrower who should initiate the procedure to restructure the loan, rather than waiting for the bank to terminate the contract with information about the possibility of restructuring the debt. The sooner the borrower acts and does not allow a debt to arise in the repayment of the loan, the greater the chance of a positive outcome. The restructuring procedure is fortunately not complicated and most banks provide detailed information about the whole process on their website.

Thus, the restructuring procedure starts with the completion and submission of the restructuring application to the bank. Many banks have already made it possible to submit such an application electronically, via the borrower’s account in the bank’s e-service. The application can also be submitted traditionally by post, at a bank branch or by e-mail.

The standard application form will require indication of the specific debt to be restructured and information about the selected form of restructuring, the reasons for submitting the application, the applicant’s family situation, the applicant’s income and sources of this income, as well as other liabilities held by the applicant. Therefore, before starting to fill in the application, it is worth preparing documents containing the above-mentioned information (inter alia, certificate of employment, certificate of income, loan agreements, etc.). Depending on the requirements of the bank in question, it will be necessary to submit with the application documents confirming the particular information and to make a declaration that the information contained in the application is true.

It should be borne in mind that the bank, regardless of the information provided by the borrower, will, when verifying the application, take into account all the information available to it about the borrower, including taking data from:

• Credit Information Bureau, or the well-known “BIK”. It is important to remember that the BIK collects all credit data, i.e. both positive and negative about a credit product. The BIK builds up your entire credit history. According to the BIK, most of the information in the BIK is positive. The BIK itself should not be confused with the debtors’ register or the blacklist of debtors. Any borrower can download a credit report from the BIK themselves.
• Business Information Bureau, or “BIG”. A BIG is not a single institution and is made up of five entities including the National Debt Register. BIGs are therefore debtors’ registers which only collect negative information on subjects other than credit, i.e. late payment of bills, rent payments, maintenance payments, etc.). A BIG does not build up a history, the information is updated on an ongoing basis.

When applying for the restructuring of a loan, it is important to remember that the bank may make a positive decision on restructuring conditional on the prior timely repayment of the debt. In view of this, it is important not to cease repayment of credit instalments before the application is submitted.

The time limit for considering an application for restructuring depends solely on the bank’s internal regulations. However, the bank should always inform the applicant of the acceptance or rejection of the application, but the bank, in the situation of rejection of the application, should additionally inform the applicant, without undue delay, in writing of the reasons for the rejection of the application.

Acceptance of the application leads to conclusion of an annex to the agreement by the bank and the applicant, which introduces changes to its provisions, in particular those concerning loan repayments. Restructuring is in fact nothing more than a change to the original terms of the agreement. It is important to remember to carefully read the annex and the new terms of the agreement. The bank should make a copy of the annex available to the applicant for review before concluding it, giving the applicant time to analyse or consult its contents with a lawyer.

What does this procedure look like in popular banks?

PKO BP

• The application can be submitted via iPKO or by emailing: restrukturyzacja@pkobp.pl ;
• In addition to spreading the repayment of the debt into instalments, the bank gives the applicant the opportunity to submit his own restructuring proposal;
• The bank requires information on the applicant’s assets, on what terms the matrimonial relationship is settled and whether the applicant has applied for consumer bankruptcy;
• Documents confirming the applicant’s assets must be submitted with the application;
• The Bank also offers assistance in repaying loan instalments for up to 18 months under the Borrower Support Fund and assistance with the sale of real estate to repay the loan under the Voluntary Real Estate Sale scheme;
• Detailed information and an application form can be found at: https://www.pkobp.pl/restrukturyzacja-zadluzenia/

mBANK

• The application may be submitted via an account in mBANK’s transaction service, in a branch, by e-mail to: windykacja@mbank.pl and by post to: mBank skrytka pocztowa 2108, 90-959 Łódź 2;
• The bank offers to restructure debt by deferring capital repayment, extending the loan term, changing loan repayment terms or consolidation. The bank also allows you to submit your own proposal for restructuring;
• The bank offers the possibility to provide additional security for the loan in the form of: a guarantee from a third party or the creation of a mortgage on the property;
• In the case of business activity, the bank requires the submission of additional documentation;
• According to the bank’s statement, the application will be processed within 14 days;
• Detailed information and the application form can be found at: https://www.mbank.pl/pomoc/trudnosci-ze-splata/wsparcie-w-splacie/

Bank Millennium

• The application should be submitted by post to: Bank Millenium S.A. Retail Receivables Investigation Department, ul. Stanisława Żaryna 2A, 02-593 Warsaw;
• In the case of a delay in repayment of more than 3 months, the bank recommends contacting a bank employee, who, after verification, should propose various solutions leading to repayment of the debt;
• In the event of persistent repayment problems, the bank recommends submitting a request to amend the terms and conditions of the credit agreement, which provides for the option of paying the debt at once or repaying the debt in redetermined instalments;
• The application also provides for the option of establishing personal collateral (e.g. through a surety of an individual) or in-kind collateral (e.g. a mortgage on real estate);
• An obligatory part of the application is the applicant’s asset declaration;
• Detailed information and the application form can be found at: https://www.bankmillennium.pl/klienci-indywidualni/wsparcie/splata-zobowiazan

Alior Bank

• An application for restructuring should be submitted at the bank’s branch, partner branch, via a call centre or sent by post to the bank’s address;
• The bank proposes to restructure the debt in particular by suspending the full capital and interest instalment, temporarily or permanently reducing the monthly instalment, converting a revolving credit (ROR, LOR, credit card) into a cash loan, establishing collateral for the liability with a mortgage (to reduce instalments). The bank also gives the opportunity to make its own proposal for restructuring.
• The Bank allows customers to provide collateral as part of the restructuring (optionally) in the form of: a third party joining the loan, the creation of a mortgage on the property or in another form indicated by the applicant;
• Detailed information and the application form can be found at: https://www.aliorbank.pl/dodatkowe-informacje/pomoc/pytania-i-odpowiedzi/co-tojest-restrukturyzacja.html

ING

• The restructuring request should be submitted via My ING or by email to: restrukturyzacja@ing.pl ;
• In the case of a cash loan, a mortgage loan, a mortgage credit, one may apply for a temporary suspension of the repayment of the principal in the instalment (during the suspension you will pay only interest), a temporary reduction of the monthly credit instalment (instalments will be lower for a specified period of time), a permanent reduction of the monthly credit instalment by extending the repayment period (instalments will be reduced, while the repayment period will be extended);
• In the case of the use of an overdraft limit, credit line, credit card, the applicant may apply for: to spread the debt into fixed or monthly instalments;
• The application, according to the bank’s assurances, will be processed within approximately 30 days;
• Detailed information and the application form can be found at: https://www.ing.pl/kontakt/pomoc-dla-kredytobiorcow/restrukturyzacja#faq2=3&wniosek=2

Santander Consumer Bank

• The application should be sent to the following address: Santander Consumer Bank S.A., ul. Legnicka 48B, 54-202 Wrocław;
• The Bank proposes to restructure the debt by introducing a grace period in the repayment of the principal of the credit/loan for a period indicated by the bank, and then spreading this principal over subsequent instalments specified in the repayment schedule and/or extending the term of the loan. The application can be made once during the entire loan period;
• The Bank also offers assistance under the Borrower Support Fund;
• For details and an application form, please visit: https://www.santander.pl/przydatne-informacje/splata-zobowiazan#wsparcie=3

Credit Agreicole

• The application can be submitted in person at a bank branch, by post to: Legnicka 48 bud. C-D, 54-202 Wrocław with an annotation on the envelope “Restructuring” or electronically – however, such an application needs to be authorised and approved via a text message sent to the telephone number provided in the application;
• Restructuring may consist in suspension of capital repayment with extension of the loan period, suspension of capital repayment without extension of the loan period, reduction of the amount of the monthly instalment, suspension of instalment repayment, change of instalment payment dates or (interestingly) suspension of loan repayment due to appointment to active military service;
• The application, according to the bank’s assurances, will be processed within 30-60 days;
• Detailed information and the application form can be found at: https://www.credit-agricole.pl/zawieszenie-splaty-kredytu/restrukturyzacja-zadluzenia

Is it worth it?

Credit restructuring is a good solution for anyone who, despite the deterioration of their economic situation, can still guarantee repayment of their debt to the bank on terms satisfactory to both parties. However, it is worth remembering that restructuring will in most cases be associated with an increase in the cost of credit, so the decision to restructure should not be taken hastily, and all possibilities of repaying the debt should be carefully considered.

Author: Katarzyna Anioł