Article 9: Managing Potential Default Cases
| No: 106889333 | Date(g): 5/3/2025 | Date(h): 6/9/1446 | Status: In-Force |
Translated Document
Effective from 2025-03-05 - Mar 05 2025
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| 1- | For the purpose of applying the regulations, creditors must consider calculating default as follows: | |
| 1-1 | For consumer default on monthly installments: When it is proven that the consumer has not committed to paying installments fully or partially for three consecutive months, or delays in paying five separate installments for seven working days or more for each installment from its due date throughout the contract period, and for every five years of the real estate finance contract duration. | |
| 1-2 | Default in finance contracts granted (non-monthly installments): When it is proven that the consumer has not committed to paying the due installment (quarterly, semi-annually, annually) for more than 60 working days, or delays in paying four separate installments for 20 working days from the agreed due date in the finance contract, or more than five separate months throughout the finance period, and for every five years of the real estate finance contract duration. | |
| 2- | Creditors must find proactive solutions when indicators of a change in the consumer's credit status appear that may lead to default, including at a minimum: | |
| 2-1 | Offering the option to reschedule the debt to the consumer if a change in their circumstances is proven (compulsorily) without granting new finance, without any additional fees, and without any change in the term cost. Creditors must execute the rescheduling - if requested by the consumer - within a period not exceeding 20 working days from the date the consumer provides the necessary documents, and creditors must postpone the deduction of installment amounts until the rescheduling procedures are completed. | |
| 2-2 | Rescheduling the debt for the consumer if the reason is due to the creditor's failure to assess the consumer's creditworthiness, including but not limited to exceeding the statutory deduction ratios, without granting new finance, without any additional fees, and without any change in the term cost. | |
| 3- | Creditors may offer the option to reschedule the debt to the consumer if a change in their circumstances is proven (optionally), with the possibility of changing the term cost and without any additional fees, provided that the rescheduling is executed - if requested by the consumer - within a period not exceeding 20 working days from the date the necessary documents are provided by the consumer. | |