Can a share in an apartment be taken away for loan debts?

It is useful for a person applying for a loan to purchase real estate to know that one of the main points of contractual obligations is property liability and the collateral status of the property. And this is not just an empty phrase - in the event of controversial situations and litigation, this clause will not work in favor of the borrower. Can a bank seize an apartment for debts? Does it have the right to unconditionally evict all members of the debtor’s family and subsequently put the property up for sale? There are several options for the development of events - let's look at them in more detail.

In what case can the bank take away the apartment?

So, is it possible to repossess an apartment for loan debts? Theoretically, yes. However, in practice everything is somewhat different.

The main difference between consumer lending and, for example, a mortgage is that the loan is not too large - it makes up only a certain part of the total price of the apartment. Therefore, it is not collateral.

And although banks have the right to file claims in court for the subsequent seizure and sale of housing, they rarely resort to this for the following reasons:

1. If the amount of debt is small compared to the value of the property, the court is unlikely to rule in favor of the plaintiff.
2. Litigation itself is a costly procedure, so creditors, assessing possible risks and financial losses, rarely take this step.
3. If there is an encumbrance on the apartment, the chances of taking it away are zero.
4. If the object is the subject of shared ownership, it is almost impossible to take it away.

And yet, conscious loan defaulters seriously risk losing their housing, since their actions violate the law. Moreover, it will most likely be taken away if the basis of the contractual obligations is a mortgage.

Can a bank take away your only home?

The principle of “single” real estate is used quite actively by persons with financial obligations. Can the apartment be taken away for non-payment of the loan in this case? Under Russian law, it is impossible to confiscate housing for the purpose of selling and paying off the borrower’s debts, but it is possible to seize it. According to the decision of the Supreme Court of the Russian Federation, since 2016, such actions of bailiffs are legally justified provided that a number of conditions are procedurally met.

Until the loan is repaid in full to the banking institution, the property will remain under encumbrance. This means restricting the rights of ownership of an apartment to the persons living in it.

For example, not only any financial transactions are prohibited with it, but also the possibility of registering and actually moving additional persons into it.

Thus, the owner can only count on the right to reside and use the property.

Can the bank take away the share in the apartment?

As for shared ownership, general rules and principles for solving the problem apply here. The main difficulty is that one of the residents of the apartment has debt obligations, but there may be another home, and its share has no encumbrances.

In this case, the bank has the right to file a foreclosure on its part of the property in the pledged object. This situation is problematic for all family members - having received their share, creditors often do not behave very correctly and try by any means to evict the rest of the household.

Share status is a complex condition, and selling part of an apartment is not easy.

Almost always, banks use collection agencies, which create unbearable conditions for residents, and shareholders have no choice but to either vacate the property or refinance the debt with another bank and pay off the loan.

In order not to encounter such problems, lawyers recommend that even at the stage of purchasing a home on credit, draw up a notarial agreement, within the framework of which part of the debtor’s property in the event of non-payment passes to the one who has already repaid his debt.

Can bailiffs take away the apartment in which the child is registered?

How do events develop if the borrower’s family has a minor child? Is it possible in this case to seize the apartment for debt on a loan? According to the law, children cannot be an obstacle not only to confiscation, but also to the sale of real estate at auction.

This happens with the reservation of the consent of the guardianship authorities, which, protecting the rights and interests of the child, give it only in exceptional cases.

However, if the bank proves during the trial the presence of other properties suitable for habitation, guardianship will not be able to prevent the arrest.

An important and quite common point is the situation when a donation agreement for another apartment is drawn up for a child. Now the actions of guardianship will be guided by the following conditions:

• the rule of a single residence;
• studying the financial situation of the family and its social status;
• the percentage of the unpaid debt amount to the appraised value of the property.

The final decision on the subject of arrest can only be made by the court with the active participation of prosecutors, who are also called upon to ensure that the interests of minor citizens are not infringed.

Actions of bailiffs

If the court nevertheless decides in favor of the bank, the bailiffs intervene in the situation, acting as executors of the legislative branch. Having a court ruling in hand, the civil servant opens enforcement proceedings. The first step is to send the defendant an official document (a writ of execution with a notification and a legal requirement). In addition, the document must contain conditions for repayment of the debt.

To ensure that the defendant receives the paper, it is sent with a postal notification. After this, the citizen has only five days to voluntarily solve the problem and pay off contractual obligations to the plaintiff.

If this is not done, the bailiff will increase the amount of the debt by another 7% - therefore, a different amount will be required for collection. The next step is a letter to the offender with information about the date of his visit by bailiffs.

If upon arrival the door was not opened to the employees, they have the right to break it. Visiting hours are limited - this is the period from 6 am to 22 pm.

Next, a seizure is issued on the property owned by the defendant, as well as on his accounts, cards - if they are debit, the funds will be written off against the debt. If there are none, or there is not enough money, housing is sought and put up for auction.

The sequence of actions of the bailiffs does not have a clear algorithm and can be changed if the owner of the apartment meets the executors of the law halfway and reconsiders his decision regarding settlement with the bank.

To do this, he needs to submit a written statement on the essence of the problem in the office of the federal executive service.

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Can a bank seize an apartment for debts on a consumer loan?

If the borrower-debtor fails to fulfill his obligations under the loan, foreclosure may be applied to all property belonging to him and sufficient to repay the debt in full, which can be seized under civil procedural law. But can a bank take away an apartment for debts on a consumer loan?

Protecting the rights of debtors, the law provides for a number of exceptions for residential real estate and, in particular, for apartments.

In this case, the bank’s ability to seize the apartment for debts on consumer loans is seriously limited , but the conditions and procedure for the bank’s actions for foreclosure differ depending on the actual circumstances of the case and the specifics of the legal status of the apartment.

General features of foreclosure on credit debt for apartments

Considering the fact that consumer loans rarely represent very large amounts, for example, comparable to a mortgage, banks rarely decide to foreclose on the apartments of debtors, because:

1. A court decision is required, and obtaining one can be difficult. The debt must be such that the court considers its volume sufficient grounds for arresting and selling the apartment. If, say, the debt is 50-100 thousand rubles, and the apartment costs a million, and the borrower gives a lot of arguments in favor of the fact that he is ready to repay the debt under certain circumstances, then you shouldn’t really count on the court making a decision in favor of the bank.
2. Repossessing an apartment is one thing, but it also needs to be sold in order to pay off the debt using the proceeds, and sometimes return part of the funds to the borrower if the cost of the apartment exceeds the debt. Valuation, organization of tenders - all this requires time and financial costs, which many banks are not ready to do in order to obtain several tens of thousands of rubles of debt.
3. The apartment may have an encumbrance that seriously limits the possibility of selling or disposing of residential real estate in any other way. In this case, there does not have to be any officially established encumbrance. It could simply be a disputed apartment or housing in which too many people are registered, including socially vulnerable categories of citizens. If the apartment is under an officially established encumbrance, for example, a pledge, then the bank is unlikely to try to foreclose on it at all - it is too troublesome and often ineffective.

In most cases, when announcing the possibility of taking away an apartment for debts on a consumer loan, banks and debt collectors simply put psychological pressure on the debtor. Losing an apartment is serious, and many borrowers simply begin to panic, taking all possible measures to repay the debt. This is what the calculation is made for.

The “single residence” rule today is familiar to most residential property owners, who often live on debt. If the apartment is the only property suitable for living, then it cannot be seized and sold for debts on a consumer loan under any circumstances . This rule also applies to the share in the apartment.

At the same time, the above rule was unconditional only until recently, when the Supreme Court adopted Resolution of the Plenum No. 50 of November 15, 2015.

This decision recognized the authority of the actions of the bailiffs to seize the debtor's only home and establish restrictions on disposal, if such actions are intended to prevent the debtor from attempting to dispose of this property to the detriment of the claimant and his interests.

In fact, this means that they can still seize the only apartment , and it will remain under encumbrance until the debtor pays off the loan.

As an encumbrance, it is possible to prohibit not only transactions with seized property, but also registration in the apartment and the occupancy of any persons during the period of restrictions. As a result, the borrower-debtor can retain only the right to reside and use housing .

A child is registered in the apartment

The very fact of registering a child in an apartment at the expense of which the bank wants to collect a debt is not an obstacle to its arrest and sale at auction. The barrier in this case is the need to obtain the consent of the guardianship authorities, and they, in turn, being obliged to act in the interests of minors, give such consent extremely rarely.

At the same time, the guardianship authorities can give consent if the parents have other residential property that is quite suitable for living by both adults and children.

A significant circumstance may also be the fact that a donation agreement for another residential property has been drawn up in favor of the child.

Thus, in situations of this kind, the decisive factors in the disagreement of the guardianship authorities are often:

• “single dwelling” rule;
• analysis and assessment of the financial situation of the family as a whole and their social status;
• the amount of debt and its size in relation to the cost of housing.  

In any case, the final decision on foreclosure on the apartment remains with the court. As a rule, the prosecutor's office, acting in the interests of the child, also participates in the consideration of such court cases.

Share in an apartment

The status of the share in the apartment is very problematic, and the bank knows about it. Selling a share is more difficult, and you won’t be able to get much for it, at least not as much as it would cost as part of the entire apartment. In most cases, the bank itself does nothing, but simply involves collectors in the process of escaping the apartment of the owners living in it . It is possible that unbearable living conditions will be created for residents. You can fight them by constantly calling the police, going to court, but in the place of one evicted “neighbor” another will come, and everything will continue. As a result, shareholders simply prefer to buy themselves off by paying the bank the entire debt and thereby buying out the share, or sell their shares to the bank, usually much lower than their real price, and move to another place.

In order not to encounter the above problems, try to find a way out of the situation together with all share owners.

There may be time before the court decision is made to transfer the ownership to one person who does not have debts. It is possible that the whole family will be able to pay off the debt.

At the same time, if necessary, you can enter into an agreement under which the debtor’s share will be transferred to those who paid off the loan if he does not return the money.

I have 1/2 share in the apartment, can the apartment be taken away for debts on loans and the executive signature of the natary? 2 disabled people live there

If the question of whether a bank can take away an apartment for debts or whether it is realistic to remain without housing for debt in an apartment received under a social tenancy agreement, the answer is clear - this is a standard procedure, then with privatized housing it is more complicated, but the outcome may be the same.

Until now, in a situation where the debts accumulated for various reasons assumed alarming proportions, citizens had at hand an extreme, but proven means of getting out of it: the sale of their own real estate. Moreover, often the only available property was put up for auction - their own housing.

Can their only home be taken away for debts? Is confiscation or arrest of the apartment possible in 2023?

This occurs, for example, when concluding a social rental agreement for residential premises.

The presence of a citizen's debt under a loan obligation to the bank does not in any way affect the right to live in rented residential premises.

The same applies to the mortgage agreement. In this situation, the bank can also satisfy its requirements based on the cost of the residential premises. Of course, all these processes are not so simple and the law establishes some relaxations regarding the percentage of debt from the cost of housing, etc.

Can a share in an apartment be taken away for loan debts?

The first part indicates the name of the court, information about the plaintiff and defendant.

After the name of the claim comes the main part, where the debtor describes essential information: when the loan was taken out, whether payments were made regularly, whether the bank notified about the debt, the amounts of fines, penalties, penalties.

The debtor indicates why he considers the bank’s actions illegal and in the petition states the need to eliminate the violations and reduce the penalty.

1. You will have to go to court, which means additional costs and work for the bank’s legal department.
2. The likelihood of winning the case is low. In most cases, the loan amount is significantly lower than the value of the property, so the court, recognizing the amounts as incommensurable, refuses to satisfy the claim.
3. Presence of encumbrances. If the apartment is mortgaged, rented, transferred under a rental agreement, is in trust, or has been seized, it will not be possible to sell it.
4. Implementation difficulties. It is difficult to find buyers for a share in an apartment. The ideal option is to sell it to shareholders. If they refuse to act as buyers, they will have to look for a new owner from among 3 persons, selling the share at auction. Organizing a sale requires material investments and time.

Seizure of shares in an apartment by bailiffs

My share in the apartment has been seized. My husband wants to sell his. If I agree to the sale, the bailiffs will take the money to pay off the debt. Is it possible not to sell, but to exchange seized property? Share in an apartment for a hostel, for example? Let him then be arrested in the same way. What do you think.

My husband has a share in the apartment, they want to sell the apartment, but the bailiffs have seized it, because of the alimony debt, he is paying off the debt, but in order to sell the apartment now they are forcing him to transfer the share to his daughter, and they said that from 2023 they can seize the share where he is registered with his mother, we live in another city, tell me what is the right thing to do?

Can they take away a share in an apartment for debts?

If in such cases the allocation of a share in kind is impossible or the remaining participants in shared or joint ownership object to this, the creditor has the right to demand that the debtor sell his share to the remaining participants in the common property at a price commensurate with the market value of this share, with the proceeds from the sale being used to repay the debt.

land plots on which the objects specified in paragraph two of this part are located, with the exception of the property specified in this paragraph, if it is the subject of a mortgage and can be foreclosed on in accordance with the legislation on mortgages;

Can they take away an apartment for loan debts?

The only condition that must be met is the involvement of the guardianship authorities (Article 56 of the Criminal Code) and the prosecutor (Article 45 of the Code of Civil Procedure) in the process. But in fact, government officials cannot influence the court's decision. Their function is to monitor the process and comply with the law regarding the minor.

Therefore, the borrower needs to think everything over and evaluate the possibilities before taking out a loan. Financial experts advise that regular payments should not exceed one third of your monthly income.

In case of possible difficulties, it is recommended to create a three-month reserve fund, which will allow you to stay on the payment schedule and make it impossible to increase the amount of debt by accruing fines and penalties for late payment.

Can bailiffs sell a share in an apartment to pay off a loan debt?

Article 446 of the Code of Civil Procedure of the Russian Federation quite popularly describes all types of property owned by a person, for which recovery is not carried out according to executive documents. Let us consider in detail what property bailiffs cannot seize:

The son has loan debts to banks. He has 14 shares in a one-room apartment, where in addition to him, 4 people are registered and live (the family of his youngest son), of which two are minor children. Can his share of the apartment be sold to pay off loan debt?

Russians who have debt obligations to the state, banking or credit organizations often ask this question. It still remains open. The new bill provides for the seizure of real estate - even if this is the citizen’s only home. The law has not yet been approved.

1. If the debtor still owns the property or other housing. It could even be a room or share in a communal apartment.
2. The amount that the citizen did not pay is slightly less than the total cost of the apartment.
3. There is a decree from the courts or a notary.

What can the bank take for debts?

If the spouses are divorced, but they have not divided the property, it can also be seized for debts to the bank based on a court decision. In this case, a preliminary procedure for dividing the property is carried out, and only then the debtor’s share is confiscated.

• If this is mortgage lending. The housing may be the only one the debtor has, but if it was purchased with a mortgage loan, it means that it is encumbered by the bank. The actions presented will also go through legal proceedings. But withdrawal can be subject to a delay of 3 months, as well as if the amount of debt is more than 5% of the value of the property. If both conditions are met, the court makes a decision in favor of the bank to confiscate the collateral.
• The court may rule on the seizure of real estate to pay for alimony arrears. In this case, the amount of debt must be commensurate with the cost of the apartment or house.
• An apartment or house may be seized from a debtor due to the existence of a debt on utility bills. This happens if the housing is municipal. If the home is owned, the amount of debt must correspond to the value of the property.

Read more —> Where to queue for an apartment in Moscow

Can bailiffs seize an apartment for loan debts?

Just as the court cannot take away the only apartment for debts on loans, public utilities do not have the right to evict a citizen from real estate if he has nowhere else to live. Seizure of square meters to pay off utility service obligations is possible in two situations:

In 2023, a bill was submitted for consideration, according to which bailiffs would have the right to seize the debtor’s only home if its area is twice the minimum standards established by the Housing Code of the Russian Federation.

It was planned that the apartment would be sold, and the proceeds would be used to pay off outstanding obligations and purchase smaller housing for individuals. This legal act was not adopted, due to the provisions of Art.

446 of the Code of Civil Procedure of the Russian Federation is currently in full force.

Can a bank seize an apartment for debts on a consumer loan?

In general, the seizure of household appliances (mixers, washing machines, kettles, televisions, etc.) is a debatable thing. The bailiffs take it away on the grounds that these are luxury items and the household can do without them.

However, if you treat the mixer and other household items as household items, then the law does not allow them to be confiscated. You can challenge the actions of bailiffs in court.

Practice shows that most often the courts side with borrowers.

The court can make a decision to seize housing only if we are talking about the second or third apartment or house of the borrower. It will be difficult to repossess a second home if its owner, in addition to the borrower, is other people.

Moreover, if children live in shared ownership, the financial institution must receive permission to withdraw the apartment from the board of trustees.

The borrower has the right to sue the bank and focus on the illegal seizure of housing.

Can a share in an apartment be taken away for loan debts?

1. This is the debtor's only living space. In 2023, a bill to abolish the restriction on single housing is being considered. If the law is approved, apartments that are too expensive will be subject to sale to pay off debts, and payers will move to more budget apartments.

   Currently, the only living space can be seized if it is the subject of a mortgage loan, or if it is pledged.

2. The object is not yet divided into shares (joint ownership). However, one should not assume that joint property is protected from foreclosure.

   The creditor has the right to apply to the court to allocate the debtor's share from the common property. After which, a penalty is applied to him.

3. A citizen is not the owner of property. Ownership is a prerequisite. The lender cannot foreclose on the leased property.

4. The amount of debt and the value of the share are disproportionate. The debt must be equal to or slightly exceed the cost of the property. If the share of the apartment costs 1,500,000 rubles, and the debt is 100,000 rubles, then the court will refuse to sell the housing.

When applying for a loan or other loan, a citizen must calculate his own capabilities. According to economists, the monthly payment cannot exceed 30% of the borrower's income. However, economic calculations do not take into account life situations.

A citizen may lose his job due to dismissal, staff reduction, liquidation of an enterprise, or his own disability. There may simply be no funds to repay the loan. Let's consider whether they can take away a share in an apartment for loan debts.