Pensioners often make disadvantageous loans. Then they face execution and financial distress.
Many people are in big financial trouble. This also applies to pensioners. Many want to help their children or grandchildren. Or be tempted to make “superb” purchases at various demonstration events. Many pensioners have difficulty knowing which loans are worthwhile and which ones they are far from avoiding.
Loans for pensioners as a debt trap
There are dozens of cases where pensioners wanted to help their loved ones. They were out of work and were unable to obtain credit themselves. A pensioner, thanks to regular income through retirement, then often has a better chance of approving the loan.
But the credibility of older people is a big risk. They often do not know how beneficial the loan or loan is. Some credit firms use very unfair practices. It offers loans specifically for pensioners. They rely, inter alia, on pensioners not checking all the conditions and tying themselves to a disadvantageous loan.
Pensioners are an attractive target group for many such companies. Because pensioners have a steady, regular income and easy execution for retirement, they can be sure that they can easily earn big money.
Mr. Jaromir wanted to borrow 50,000 crowns for his son, who wanted to start a business, but did not get the necessary credit from the bank. This gentleman took advantage of one of the offers he found in a newspaper ad. The salesman came to his home, told him the terms and immediately gave him the contract. Mr. Jaromir did not study it properly and until his son found out what he actually signed up for.
He would have paid over USD 190,000 in installments over two years for a loan of USD 50000. The amount of the repayments was so high that even Jaromír’s retirement made it almost impossible to pay these repayments.
Eventually the whole situation ended with Mr. Jaromír being late with two installments and the company immediately sent him a bailiff.
The same rules apply to the execution of the pension
As to the execution of the wage. Even a pensioner is only entitled to 2/3 of the subsistence minimum and housing costs, which is the amount of 5842 USD. In addition, he still has a proportion of the remaining amount.
Mr. Jaromír had a pension of USD 11,200, but he had to repay the executor a debt of USD 140,000. After execution, he has only USD 9,414.