Debt write-off as a fraud: how not to fall for the bait of false lawyers

The problem with “debtor debtors” (as debt write-off specialists are called in financial circles) appeared quite a long time ago, and throughout the modern history of Russia it has manifested itself in different forms. As Vadim Tkachenko, founder of the vvCube consulting group, said, at first these were people supposedly helping to get a loan that would not need to be repaid. Then pseudo-helpers appeared who “released” them from loans, then – scammers who allegedly took on debts and “found” money to pay off these debts. There are still different schemes, and, apparently, this system will continue to change as the rules and conditions of lending change. Experts have told us the six most common methods by which unscrupulous lawyers or outright scammers try to lure debtors into their networks.

1. “Show off”: the use of spectacular promises and bright signs for impressionable and financially difficult borrowers

A 25-year-old resident of Moscow turned for help to a company engaged in “resolving issues with debts.” She explained that she was completely confused. She had no money to pay off her debts. During the period of turning to debtors, she took out a loan from five microfinance organizations and two banks. The girl believed that a company located in the center of Moscow and with pleasant reviews online would definitely be able to help her, since she did not have the opportunity to pay off her debt. During the consultation, she was offered to no longer pay for her obligations, charging her 30 thousand rubles for such “services.” The pseudo-lawyers said that they would prepare the papers, signed an agreement with her, and then disappeared forever.

2. “Ordinary legal robbery”: using the debtor’s low legal literacy for one’s own purposes

Another elderly client took out a loan to treat her sick daughter. The amount of debt and financial burden ultimately turned out to be too much for her to bear. But the woman found an advertisement on a leaflet about the possibility of debt forgiveness. She made a payment of 50 thousand rubles, but after a month of “working” with her situation, the company stopped communicating.

“Such illegal activities need to be fought. As our practice shows, most often, not only gullible people, but also those who find themselves in a difficult situation find themselves in such situations,” explains Tkachenko. “It’s easier to convince them that there is a way out and that specialists will help, but in a critical situation it’s difficult for them to think about the consequences. The worst part is that such stories do not always end simply with the company “disappearing.” Sometimes such scammers continue to extract money from a gullible and desperate client, creating the appearance of work.”

3. “Do not negotiate to the end”: keeping silent about the debtor’s ability to draw up documents independently and free of charge

Among the “debtor debtors” there are relatively decent ones who do not steal money directly, but simply keep silent about the negative consequences for the client that the bankruptcy procedure can lead to, or take money for something that a person can do for free – for example, submit documents to the MFC, find an arbitration manager, etc. “The problem is that rarely does anyone want to hear the truth,” says Polina Gusyatnikova, senior managing partner at the law firm PG Partners. — And it lies in the fact that there is no mechanism to “get away with it.” It is impossible to simply write off the debts of any citizen under any circumstances. This always comes with certain consequences. It’s the unscrupulous “debtor debtors” who prefer to remain silent about the consequences.”

A scheme is often used according to which such pseudo-lawyers offer to draw up an application, letter or some other document demanding that the debt be written off and charge around 10-20 thousand rubles for this. You should immediately refuse such offers, because no statement or letter will free you from debt in practice. You will only waste your money and time. If you cannot repay your loans and you have no assets or income, there is only one way to solve the problem – bankruptcy. If the debt amount is from 25 thousand rubles to 1 million rubles, this can be done free of charge through the MFC. No papers asking to free you from your debt will help, the lawyer warned.

4. “Rewinding the debt loop”: they offer to take out a new loan to pay off the old ones and pay for lawyers’ services

But there is a more sophisticated version of fraud, where swindlers can play big. The scheme is as follows: the victim applies for debt relief because the advertisement promises so. She is convinced that now she must take out another loan that will cover all the previous ones. Then the office will pay off existing debts with this money, and simply write off the new loan. In addition, the victim must also give the scammers a certain percentage. The scammers claim that they will sort everything out themselves, they just need to bring cash. The victim does just that. As a result, a person is left with old debts and a new loan, because after receiving the money the scammers disappear.

5. “Steal the credit”: the debtor is offered to deceive creditors

Quite often, scammers offer to deceive creditors – file for bankruptcy and urgently sell off all their property before doing so or transfer it to relatives. But this method will not work, because transactions for the withdrawal of property can be challenged if they were completed within 3 years before bankruptcy. Also, “consultants” often keep silent about the fact that the debtor may lose even his only home. Firstly, if it was the subject of collateral from the lender, and secondly, if it is too “luxurious”. For example, a four-room apartment, which is the only home, depending on the circumstances, may be sold at auction, and the debtor will be offered to purchase a one-room apartment, etc. Such precedents have already existed in domestic judicial practice.

6. “Unwarned, unarmed”: silence about the consequences of bankruptcy proceedings

Remember that the bankruptcy procedure itself has unpleasant consequences. To carry it out, the debtor really cannot have property and income. If there is at least some income, part of the money will be written off to pay off the debt, and the bankrupt will not be able to take out new loans for 5 years.

Unscrupulous “debtor debtors” do not tell citizens about all this, taking advantage of their difficult situation and legal illiteracy. As a result, gullible people pay for their services, but end up in an even more difficult situation.

How to act according to the law

If you find yourself in a difficult situation and cannot cope with your debt obligations on loans, there is no need to engage in a useless search for a “magic pill for debt” – it does not exist in principle. But what needs to be done first and foremost is to contact your creditors and try to jointly find a solution to the problem. After all, they are also interested in the money coming to them – even if not all of it and not at once… “For this, there is, for example, debt restructuring,” recalls Gusyatnikova. “As part of the restructuring, most often the monthly payment is reduced to an acceptable level with an increase in the loan term.” You can also ask for a credit holiday – this will allow you to gain a few months. Banks do this in many cases, because in the opposite scenario there is only one way left: collecting debts through the court. This is also a troublesome matter for the bank.

In addition, if you can pay at least something, you should not stop doing this, because otherwise debts will accumulate, which the creditor will still collect later.

“If none of the above methods are suitable and the situation is truly critical, then you can seek legal help,” continues Gusyatnikova. “But at the same time, you should look at things soberly and understand that a lawyer is not a magician, and he will not be able to free you from debt with a wave of a magic wand. There will always be some loss and consequences.”

Of course, it cannot be said that everyone who offers debt settlement services is a scammer. “Let’s start with the fact that these are ordinary legal services, and success in legal matters depends on the specific situation with a specific client,” says Anastasia Khrustaleva, senior vice president of Fontvielle Investment Company. — Some debtors can actually be helped through bankruptcy procedures, and there is no fraud here. Others may need support in court in order to reduce penalties, and this service is also quite within the framework of current legislation.” This leads to another piece of advice: in the event of a critical situation with debts, it is necessary to consult with competent lawyers, and it is better to get several consultations. Here we can draw an analogy with doctors: to make a correct diagnosis, it is better to listen to several opinions, the expert recommends.