How to settle an overdue debt?
Agency for Regulation and Development of the Financial Market reminds that the laws have established a unified mechanism for interaction between borrowers and banks, microfinance organizations (MFOs), and collection agencies.
How to change loan terms and conditions?
If financial difficulties arise, the borrower has the right to contact his lender (bank, MFO or collection agency) with a written request to change the terms and conditions for discharge of his obligations.
The request must be accompanied by documents that confirm deterioration of his financial situation or the reasons for the overdue debt. This may include a certificate of registration as unemployed, an act of the employer to terminate an employment contract, grant unpaid leave or a certificate of temporary disability that confirm illness of a close relative or spouse of the borrower; a death certificate/ statement of death of a close relative or spouse of the borrower; documents that confirm material damage to the borrower as a result of an accident, illegal actions of third parties, a certificate of disability, judicial acts and other documents that confirm deterioration of the borrower's financial situation. A full list of required documents is available on the Agency's website.
Application can be submitted in person at the lender's address or via a mobile app or email, if required by the agreement. The lender will study the application and make a decision within 15 calendar days.
Where to go if you are not satisfied with the lender's decision?
If the borrower is not satisfied with the lender's decision, he can contact the bank or microfinance ombudsman.
For bank loans, via website bank-ombudsman.kz.
You must attach the following to your request:
- agreement and payment schedule;
- proof of contacting the bank or collection agency and its response;
- documents that confirm financial difficulties.
For microfinance loans – via mfombudsman.kz.
You must attach the following to your request:
- application and questionnaire;
- microloan agreement and repayment schedule;
- proof of contacting the microfinance organization and its response;
- documents that confirm deterioration of your financial situation.
Ombudsman services are free of charge. Their decisions are binding. Ombudsmen help find a mutually acceptable solution for both the borrower and the lender. It is important to remember that you can only submit a request to the ombudsman after you have officially contacted the lender and received its response.
How does bankruptcy procedure for individuals work?
If the borrower is unable to repay the debt, the bankruptcy procedure for citizens of the Republic of Kazakhstan is applied subject to the Law "Restoring Solvency and Bankruptcy of Citizens."
The debt can be written off if the following conditions are met:
- the debt amount exceeds 1,600 MCIs;
- there is insufficient income to repay it;
- there is no property that can be sold (including a share in joint property);
- loan payments have not been made for 12 consecutive months;
- the borrower is not an individual entrepreneur;
- there has been no bankruptcy proceedings for the last 7 years;
- there has been no debt restructuring for the last 5 years.
The procedure is free of charge and can be initiated through the eGov.kz portal or at the Population Service Center.
Bankruptcy proceeding allows borrowers to legally resolve issues with their debt and completely terminate their debt obligations. However, before initiating the proceeding, it is necessary to assess all the consequences:
- the borrower will be unable to get new loans for 5 years;
- for 3 years after the bankruptcy proceeding is completed, the borrower will not be allowed to hold positions in government or quasi-government organizations related to financial management;
- bankruptcy information is recorded in government registries and may impact their financial reputation in the future.