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1. Are borrowers and mortgagors often the weak parties?
Regarding legal status, in credit relationships and secured transactions, it is clear that the borrower and the guarantor are never the advantageous party. In a legal sharing article, HT Legal VN Law Firm shared the content: "Why do borrowers and mortgagors need protection lawyers?
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Accordingly, we have affirmed that the bank is the "big man" who creates the playing field and the rules of the game (on the basis of law) regarding:
- Loan conditions, loan documents, asset valuation and mortgage.
- Records/documents must follow the Banks' standard forms, strictly non-negotiable
- The bank regulates interest rates, interest rate increase and decrease margin, and debt repayment penalties
- In addition, there is a complete system of regulations on debt handling, interest exemption and reduction, and risk handling
- Banks are often the proactive party in disputes with customers. Banks are always proactive in working with relevant borrowers to implement debt collection measures
- Banks are often the plaintiffs, proactive in preparing evidence, helping them handle the case quickly and more profitably than the other side.
- Banks have an advantage when they are able to grasp the personal, family, financial and other weaknesses of borrowers and mortgagors, and have an uncompromised advantage in the actual value of collateral assets and the value of liquidated assets in negotiations with customers
- In terms of psychology, the banks usually have a better mentality when a dispute arises, is often the one leading the game and ending it in the most beneficial way for themselves.
- In terms of opportunity (costs), dispute with banks in the long run usually means the other side always suffers disadvantages on both legal and practical grounds. Disputing with banks is always disadvantageous because of its potential financial losses, time-consuming, legally complicated, asset value degradation, compound interest suffering, etc, and a series of other issues that make us cautious and calculating.
2. Psychological barriers of borrowers and mortgagors ?
Firstly, compared to other disputed relationships, the bank debts or the mortgaging obligations are always in a "dilemma" situation, meaning they always hesitate to negotiate and stand for their legitimate rights and interests against the bank. This is partly because the level of professional understanding or knowledge related to the field of credit and legal affairs in general is not balanced compared to bank officials, partly because of the "hesitant" mentality, it’s clear that if you have a debt, you have to pay it, and there's nothing to argue about?
Secondly, the general psychology of borrowers and mortgagors is often over confident in the debt handling of bank officials, so they often do not have a cautious mentality or doubt the objectivity, falsely believing that bank staff will ensure their legitimate rights and interests according to law.
Thirdly, litigation disputes follow the common mentality of "no luck ending in court", especially when the dispute lasts for a long time, it makes many people more afraid and tired, so if it is left to the bank, they will handle it themselves as fast as possible and in a way that does not affect the reputation and image of customers and families.
Next, some customers have a self-confident mentality and they want to handle their dispute without trusting anyone to do it, or they think they can handle it themselves without wasting money on useless help from others, or they have many relationships or can research and handle things on their own
Fifth, there is also a conservative or excessive mentality that leads to extreme aggressiveness and opposition, leading to many lengthy credit contract disputes, causing disadvantages and great losses, financially, opportunity costs, assets and reputation of all parties. Acts of reckless obstruction because mortgagors don't want to "lose assets" or are "inactive" and don't care and don't listen to anyone's advice, even though at the end of the day, the customer won't receive anything worthy in terms of reputation, economics, and strategy. This is also a completely unfortunate.
3. Who protects the borrowers and mortgagors?
As analyzed above, the issue of which party is in disadvantageous position and the potential barriers for borrowers and mortgagors. We need to note the following:
Whether you have complete confidence that your legitimate rights and interests will be regulated and protected by the law without having to wasting effort to involve in these legal disputes?
What reassure you that your loan will be handled satisfactorily by the bank, including policies on interest exemption, reduction or other incentives and support when you are, as "debtor", in real trouble?
Whether you have enough understanding, resources and experience to ensure the bank has well considered your rights and obligations? Have they really supported customers and fully complied with the process of handling debt and selling your secured assets (collateral)?
What makes you believe that your projects, rights to property, houses, land plots, cars, which were handed over to the bank, will be handled, managed, auctioned or sold in a lawful procedure, fully guaranteeing your legitimate rights and interests?
If the borrower or mortgagor does not monitor their debts and collateral obligations well, when will they complete these obligations and the related obligations. And if they can not pay off or collateral assets is insufficient, then what will happen?
In addition to the existing debt and collateral obligations with the bank, how many additional obligations and extra costs will you have to bear in the process of debt settlement, asset seizured and sold?
In short, which option and how to resolve this legal dispute is your right to make a decision, and the consequences thereof will be the answer to the question: Who protects the borrower, mortgagor?
With socio-economic development, recently the role of professional consultants such as Lawyers/Law Firms has been increasingly trusted by customers, enhancing their position and social status, but the general psychology of borrowers and mortgagors are still cautious in finding and hiring legal services.
In general, most borrowers and mortgagors protect themselves or rely on acquaintances (via authorization), who have some advantages in terms of qualifications and understanding, to work and jointly resolve debts and collateral obligations with the banks. Regardless of whether customers are businesses or individuals, recently the rate of borrowers and mortgagors coming to HT Legal VN Law Firm for advice is relatively positive compared to before, but in general, it is still modest compared to the number of credit and mortgage/collateral contract disputes occurring, only considering in the Ho Chi Minh City area.
HT Legal VN Law Firm is a professional and pioneering legal consulting firm in protecting borrowers and bank mortgagors. We aim to pay close attention to customers’ legal issues, representing and accompanying customers throughout the debt settlement process, collateral asset protection, seizure process, lawsuit process, judgment enforcement to provide legal solutions professionally and best protect the legitimate rights and interests of customers.
This article represents the personal views of HT Legal VN Law Firm
HT LEGAL VN LAW FIRM (CÔNG TY LUẬT TNHH HT LEGAL VN)
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