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- Title
VOLUNTARY SALE AS A WAY OUT OF DEBT.
- Authors
Stefanov, Dragomir
- Abstract
In recent years, the number and amount of the overdue and restructured credit exposures of commercial banks in the country is growing at a threatening pace. In this process, the main contribution is due to mortgages. The decline in real estate prices, the increased lending rates, low economic growth, high unemployment and frozen workers income are just some of the reasons for this negative trend. In an effort to limit the amount of specific provisions and risk of loss, banks increased monitoring of the solvency of debtors and apply different forms of gratification at the expense of the realization of the mortgaged property. In this respect, increasing popularity has the voluntary sale of property by a debtor in financial unsolvency. It has many advantages for both parties - creditor and debtor, before the public sale. These include maintaining control over the deal with the mortgaged property, shorter and simplified procedure, easier financing, expanding the range of potential buyers, lower transaction costs and etc. At the same time, people are generally not willing to accept the losses and to assess the real situation of the real estate market in the country, which to some extent limited the application of this method. Realization of joint and several liability of the banking institutions of misperception solvency of their defaulting debtors is key to finding the right approach to limit losses. The role of banking experts in this direction is irreplaceable.
- Subjects
COMMERCIAL credit; BANKING industry; MORTGAGES; REAL estate sales; BANKRUPTCY; DEBTOR &; creditor; LEGAL liability
- Publication
Management & Education / Upravlenie i Obrazovanie, 2014, Vol 10, Issue 1, p72
- ISSN
1312-6121
- Publication type
Article