Real Economy And Debt Consolidation

The failure of quantitative easing and the possibility of debt consolidation.

Three brief notes by Emanuelle on debt, the real economy and debt consolidation and the possible solutions in conditions of limited monetary sovereignty: complementary currency.

Money to the Real Economy

Given that quantitative easing has only partially worked and has in any case widened the gap in economic inequality in Italy, what needs to be done to improve the situation?

From a monetary point of view, more money must be entered into the real economy. Expansionary fiscal measures are needed and a central bank creates money that really increases domestic consumption (therefore an emission free of debt, which does not increase the debt, and does not create inflation, since the productive factors are widely used).

The problem therefore is not the Euro itself, but the blackmail on the debt of the existing monetary system, which is based on debit currency, ie on the issuance of credit, not on the sovereign currency, issued without debt, issued by the State or from its central bank.

Even in Great Britain, even having their own currency and not the euro, they understood the need to change monetary policy thanks to poster money pressure.

The basis of the current international monetary system is based on the debt and interest that both private individuals and the state must pay.

And it is mathematically inextinguishable without the creation of new money which at this point must be issued directly by the state, without adding new debt to the system as a whole.

Debt consolidation

Debt consolidation

The central bank that buys, as it does in Japan, or indirectly as it does in Europe, the public debt of its own state, where does it find the money?

Money cannot be found, it is a means of measurement and exchange, it is a convention, and in fact it is created with a click of the computer, in the case of electronic bank-issued money, both by private banks and by the central bank.

Both in Great Britain and in Japan it has been shown that debt consolidation is possible, and thus bring down this blackmail towards states and citizens.

The concept is similar to that expressed during the formation of the new M5S-Lega government, when there was talk of canceling the debt. Well, it has already been done by the British and Japanese central bank.

Simplifying: the state debt bought by central banks must no longer be repaid, relieving public accounts.

In the decades of Italian economic prosperity of the last century and up to 1981, Italy became a world industrial power because it monetized part of the public deficit, controlled the cost of debt, paying less interest, thanks to the purchase of public securities by the Bank Italy.

Recourse to the market was limited, thanks also to the system of public banks that bought government bonds, issuing electronic money like private banks.

If the national central bank issues money directly (thus without increasing public debt) the economy is stimulated as well as reducing the leverage of the whole system as studied by the IMF in 2012. This macro economic model of the IMF is one of the most advanced available and much more accurate than the average.

In Italy and Europe this monetary policy just described is not currently possible, having delegated to a third and independent entity the CB, the power to create money together with private banks. Without leaving the Euro and violating the treaties, without nationalizing the Bank in Italy or claiming that the policy has greater control of the CB, what remains to be done? The answers:

  1. introduce a fiscal currency, a parallel exchange and payment instrument as proposed by Prof. Cathy.

  2. to create one or more public banks for investments that re-launch credit and thus, giving new life to the economic system, industrial development and employment. This point is already included in the M5S program and in the subsequent Government contract with the League. It should be remembered that for example in Germany more than half of the banking system has remained public… a big competitive advantage for them and vice versa a strong penalization for us.

  3. Introduce the local currencies (complementary to the euro and the national fiscal currency) issued directly by the local public bodies (municipalities, regions) that already have the right to issue electronic money by law

The first two points have already been debated, while little or nothing has been studied on the third point, namely the local currency issued directly by a public body for the revitalization of the local economy, a strengthening of identity and local social cohesion and the consequent reduction of the unemployment rate.

Debt Consolidation: Growing Demands and How to Apply

The reasons that push Italians to apply for a loan have changed over time. This year there was a net increase in the demand for debt consolidation: the increase in the first 10 months of 2018 was in fact + 3.6%.

Everything you need to know about debt consolidation loans

The demand for loans follows the evolution of the times and in an era where a loan is increasingly used to sustain important expenses, it may happen that you are faced with having to pay off more debts in the same period. It may also happen that a sudden expense emerges that leads to asking for a loan while having others at its own expense. In order to better govern and organize one’s finances, using a loan to pay off previously contracted debts can help solve a thorny situation. Debt consolidation refers precisely to the practice of compacting all debts contracted with different entities into a single installment, effectively liquidating them, thanks to the subscription of a new loan with a single institution. This allows to simplify the economic management, having a single installment, but also to renegotiate the financing at more advantageous conditions, delaying repayment times and perhaps lowering the installment. Under these conditions the interest rate to be paid could increase, but a debt consolidation loan is still an excellent solution if it is too complex to balance the finances and the solvency of the debts incurred is at risk. This is an increasingly widespread and routine operation but, concerning finances, it is important that every request for debt consolidation ( as explained here ), is presented only to authorized financial institutions and signed only after having examined several proposals.

How to apply for a loan to pay off other debts

In order to request a new loan to settle other debts previously contracted, it is necessary to examine one’s own job position, pay slip and the dynamics with which the requested loans have been repaid. If the reputation of the credit institution to which it is addressed is fundamental, that it must be trusted and authorized, so is that of the loan applicant, whose financial history must be immaculate and not present anomalies in the installments paid to cover other loans. In essence, all the loans received must always have been regularly paid, otherwise access to a loan to consolidate debts will not be possible. The non-payment of an installment to a credit institution causes, in fact, negative repercussions even on subsequent requests for financing. Precisely to avoid being marked as bad payers, when you risk being insolvent it is better to turn to an institution that takes charge of renegotiating the loans with the credit institutions that have disbursed them to pay them off. A new mortgage will be opened with lower installments and with a single institution. To apply for a loan, as well as read up online collecting information on the institutions that offer this service, it is good to contact a professional. The latter will carry out an analysis of the applicant’s financial situation so as to verify the existence of the conditions for accessing debt consolidation.

Debt consolidation loan: What It Is, How It Works and Why Mortgage Loan

 

The lack of liquidity, above all, by virtue of substantial investments, has favored the request for loans both to private agencies as financial institutions and to bodies, while still private, such as banks.
There are several forms of financing, to which you can refer, among the most requested there is certainly the mortgage, often and willingly required for the purchase of the first house. The mortgage is a contract to real obligations, usually banking, through which you can, as a natural person or legal entity, borrow money for the purpose of acquiring goods or services, with the obligation to return the credit monthly within a number of years, including interests, legally calculated based on the historical moment.

A classic example of a mortgage is the real estate mortgage, in this case the request for the provision of money is aimed at buying a property, the peculiarity of this loan is the double contract signed by the notary, purchase between buyer and seller and mortgage between bank or financial institution and natural or legal person. A legal case related to the purchase of real estate, within the real estate mortgage is the assumption of the mortgage.

What is the acceptance of the mortgage

The accollo is a legal institution that finds its discplina in the art. 1273 of the Italian Civil Code, this is a transfer of credit to a specific person, it differs from the ex-proxcision, since in the latter the agreement is stipulated in the financial year or the bank that has sold the loan and the person who takes over in debt. The takeover, is specifically the assumption of the loan, is the contract between the subject originally debtor, technically called “accollato” and the subject who takes over the debt, technically defined as “collateral”, the third assumes the obligation to pay the installments for the acquisition of the real estate and to fulfill any additional services underwritten in the original loan agreement. The takeover can take different forms, we speak of an external takeover, where the original debtor requests to be part of the third party of the debt subrogation agreement, also we speak of internal takeover, in which case the original debtor remains excluded from the agreement.

How does it work

If you want to buy a property from a seller who still has to extinguish the mortgage, you can ask the seller to free the property from the mortgage or take it yourself or together with the seller the mortgage, by signing a private contract with the seller. In relation to the second option it is possible to distinguish between two types of take-over:

  • liberating, the buyer takes over the mortgage under the same conditions as the original collateral, by paying the difference in the value of the asset to the seller / accollato, which in this way is released from the debt;
  • cumulative, in this case, the buyer as the third party and the original debtor are both jointly and severally liable towards the lender.

For the purposes of assignment of the loan and the ownership of the immovable property it is, inter alia, necessary that you turn to a notary to sign a notarial deed called “deed” through which the notary authenticates and legitimates the transfer of ownership over the property of the ‘estate.

Because the mortgage is accepted

The acceptance of the mortgage brings advantages both for the accollato and for the borrower as well as for the lender. If you are going to buy a good from a seller who has not yet repaid the mortgage, you can decide to take the mortgage, this will save time and costs such as all incidental expenses related to the opening of the mortgage itself arising from the appraisals, from the deeds of the notary etc… or of closure or termination of the loan.

Particularly advantageous is the purchase of a property from a company, in which case I would be obliged to pay only 80% of the debt subscribed. If you have a property and you have not yet repaid the mortgage, selling it to a natural or legal person will allow you to free yourself from debt (“liberating”) or share the same with another person (“cumulative accolade”). If you are a lending institution like a financial institution or a bank, you can take it as a further guarantee of credit fulfillment, the third party assuming the credit obligation, guarantees the fulfillment of the pecuniary obligation, rest, it does not matter who acquires the credit, therefore, difficult the entity that provides the credit will not grant its consent to the change of the debtor.

How to consolidate your debts? – Cancel my debts

Thousands of citizens suffer from having debts and not being able to pay them. We have seen it firsthand. On the other hand, what bunds, is the lack of information easily accessible to the citizen. Therefore, as experts in banking law and debt negotiation, we want you to know the legal tools available. Today we want to present you the consolidation of debts.

Debt Consolidation

In the first place, we will explain what the consolidation of debts consists of. Consolidating your debts is, in other words, grouping all your debts into one. That is a global credit that uses your mortgaged real estate as collateral or guarantee. This type of reunification is widely used by families who will bear extra expenses to be able to take on, for example, the purchase of a car or the education of their children. In this way, the debt is not canceled but transferred to a single amount.

The consolidation of debts is not suitable for all situations. Therefore, we must study the advantages it can have depending on our needs. If you need to reduce and manage your monthly payments over time, consolidating your debts is a good option. However, the total debt will be higher in a longer period of time. For example, this tool is used many times to group credit card debts.

Advantages of consolidating your debts

  • Management of several payments in a single monthly payment
  • Reduction of the amount of interest to be paid.
  • Relief in short-term family accounts.
  • Investment opportunity.
  • Avoid fines and inclusion in a list of defaulters.
  • Reduction of monthly payments.
  • Long-term financing

Disadvantages of consolidating your debts

  • Increase in total bank debts. Possible charges for the transfer of debts from one account to another.
  • Increase in debt risk. For example, if you re-use the cards that you have consolidated you will have to face the new debt along with the consolidation.
  • Possible eviction in case of non-payment.
  • The family situation can be unsustainable if you fail to pay the monthly payments for a while.
  • Relief in the short term, but does not solve a big financial problem and can make it worse.

For all the above, we recommend that you put yourself in the hands of experts. We are specialized lawyers in banking law. We make claims to banks, debt consolidation and many other services such as renegotiation of debts, claims for mortgage expenses and abusive clauses, among others. We will study the causes of your debt and if the consolidation of debts is not your best option, we will propose the best solution for your bank debts. Consolidating your debts can be easier if you let us advise you. We are part of the network of partners of the Global Legal Area in all the provinces of Spain. Find your nearest office and we will get in touch.