How to deal with the bad debts that the bank does not pay back?

I'm a lawyer. Let me answer this question.

Banks mainly deal with bad debts in the following ways.

First, the relevant departments within our own company collect money. For example, the asset insurance departments of some banks are responsible for this kind of work. To put it bluntly, it is the collection department of the bank, which specializes in collecting these bad debts. However, due to the internal collection of our company, there are problems in our own incentive mechanism, and all of them are collecting bad debts that are overdue for a relatively short time (for example, three months) and easy to collect. After this time, they are reluctant to accept it themselves. After all, some bank employees have disproportionate money and bonuses, and their enthusiasm is not high.

Second, the bad debts formed by corporate loans are collected by the account manager who handled the business at the beginning. In some banks, the account manager pulls in a corporate loan business, and then submits it to the credit approval department of the bank head office for approval before issuing loans. If there are bad debts behind the business and the money can't be collected, the account manager in charge of the business will quit and the bank will ask him to collect the bad debts. During this period, the account manager will receive basic salary, bonus and other benefits, which has nothing to do with him. When to collect money, when to start business again, and enjoy benefits such as employee rewards.

Third, sell the non-performing assets formed by relatively high-quality corporate loans to four major asset management companies, such as Great Wall and Huarong. These asset management companies are specially set up by the government to deal with such non-performing assets. They first buy such asset packages with their own funds or funds raised by issuing bonds, and then digest these non-performing assets in various ways, such as resale to others, litigation, debt-to-equity swaps, etc.

Third, outsourcing to law firms. At present, many lawyers take this as their profession, and banks also have many bids for this kind of business. If ordinary lawyers directly handle the case through prosecution, of course, they also send letters to lawyers, but rarely, mainly through litigation, prosecution, execution and other procedures, which is also very time-consuming.

Fourth, outsource to an outside collection company. The bank packaged the bad debts into asset packages and handed them over to the outside collection company for collection. These collection companies recruit a large number of students who have just left school and have no jobs. In the name of a law firm, they call those who don't pay back the money. Some even come to ask for money. Some people have overdue credit cards and often get calls asking you to pay back the money. These people did it.

In short, banks will deal with these bad debts in various ways.

Banks usually take the following steps:

First of all, banks collect money by themselves, which is the only way for banks. Of course, many loans are generally mortgaged, so the bad debts of banks are generally generated under the condition of excessive mortgage or credit loans. Bank collection, mainly by phone or lawyer's letter.

Secondly, banks outsource collection, although many banks do not have this practice, because this practice itself has certain irregularities. But there is still such a situation, and outsourcing collection is not so easy. For such things, although people who owe money can sometimes call the police, many things, such as paying off debts, are more difficult to deal with.

Secondly, if the bank really can't get it back, the bank will package and sell these debts. It is hard to say whether domestic banks are like this, because they are not in the banking system. But there is such a situation abroad, and this is how the subprime mortgage crisis in the United States came about.

In the end, if the bank can't collect it, it will register the bad debts. This bad debt write-off registration must be reported to the central bank and also reflected in the annual financial statements.

Of course, in fact, the bad debt rate of domestic banks has been increasing in recent years, mainly because credit loans are becoming more and more popular. Many of them are unable to repay after the credit loan. Most of the previous ones are mortgaged, and even if they are not paid, they can be auctioned.

According to the current management mode, bank loans are generally divided into five levels: normal, concern, secondary, suspicious and loss. The latter three categories are commonly known as "bank non-performing assets", that is, "bad debts" and "bad debts" mentioned by the subject. Non-performing loans do not mean that you will not receive a penny. What they mean is that banks will still lose their principal after exhausting all cashback means. The proportion of principal loss of subprime, doubtful and loss loans is getting higher and higher between 30%- 100%.

At present, commercial banks mainly deal with non-performing loans in four ways: collection, write-off, package transfer and debt restructuring.

1. Disposal and collection. According to the contractual agreement between the borrower and the lender, the debtor has actually breached the contract as the first repayment source, and the bank will seek the second repayment source (usually with the debtor, such as husband and wife, or guarantor) to fulfill the debt service obligation of the loan contract. If the debt cannot be paid off after this, the bank will generally sue the debtor and the guarantor, demand the execution of the collateral (such as real estate) under the mortgage contract, and at the same time seal up other valuable assets (if any) under the debtor's name to pay off the debt with the execution funds of the court.

2. Pack and transfer. With the development of China's banking industry, there are more and more non-performing assets in the system, which consumes a lot of manpower and material resources. 199, the Ministry of Finance allocated 40 billion yuan to set up four asset management companies (state-owned AMC), namely Dongfang, Huarong, Cinda and Great Wall, to divest the bad debts of commercial banks. Commonly known as "package transfer", that is, the bad debts originally belonging to the bank are transferred to AMC through the transfer of creditor's rights. After the continuous development of domestic finance, the four state-owned AMCs could not meet the needs of bank packaging and transfer. 10 years later, local AMCs were established in various places to accept non-performing loans from local banks.

3. Write off. No matter the first or the second case, the loss of the bank's principal is basically inevitable (the creditor's rights are basically sold at a discount on the basis of the principal), and this part of the loss will consume the bank's provision, commonly known as "provision for bad debts". Write-off debts are not reflected in the table as bad assets, commonly known as "account sales and case storage", and the provisions consumed are the bank's profits, which are equivalent. If the non-performing assets after write-off are recovered, they will be directly reflected in the bank's own profits.

4. Debt restructuring. There are many reasons for enterprises to default. Not all debts are malicious defaults. Many business owners only have temporary liquidity difficulties or are affected by upstream and downstream fluctuations in the industry, resulting in temporary liquidity tension. For such enterprises that have not lost their hematopoietic function in essence, banks can renegotiate the repayment period with enterprises, give them a certain grace period, lower interest rates, re-inject a sum of liquidity to revitalize enterprises and restore non-performing assets to normal.

Banks profit from loan spreads. However, because customers lose money in their business, they will not be able to repay the money, which leads to non-performing loans.

According to the regulations of China Banking and Insurance Regulatory Commission, loans are divided into five categories: normal, concerned, graded, doubtful and loss. Losing a loan is bad debt.

How to deal with non-performing loans, one is to continue to collect and demand repayment through litigation, or to dispose of mortgaged assets through litigation or demand repayment from guarantors, and the other is to form non-performing loan assets and sell them collectively, usually to non-performing asset disposal companies. In order to dispose of the non-performing loans of the four major banks, four non-performing loan disposal companies were established.

1April, 1999, the general office of the State Council forwarded the opinions of the People's Bank of China, the Ministry of Finance and the China Securities Regulatory Commission on the establishment of China Cinda Asset Management Company. 1In April, 1999, China Xinda Asset Management Company, the first asset management company in China, was established in Beijing and received 373 billion non-performing loans from China Construction Bank.

Subsequently, Huarong, Great Wall and Dongfang three asset management companies were established one after another. Corresponding to the other three state-owned commercial banks-Industrial and Commercial Bank of China, Agricultural Bank of China and Bank of China, they received 407.7 billion, 345.8 billion and 267.4 billion non-performing loans respectively, and the four financial asset management companies received a total of 1.4 trillion non-performing loans.

The disposal of non-performing loans is a lucrative industry, and there are also local non-performing loan disposal companies funded by local governments.

Finally, it is to hang up the account first and turn it into a non-performing loan, and then look for an opportunity to recover the loan when the company's business improves.

There are two main ways to deal with bad debts in banks. First, digest it by yourself, that is, make provision according to five categories, write off the loans that become bad debts, and then transfer these loans to the bank's own non-performing asset disposal company, which will slowly collect them.

Second, according to the previously established four major financial asset companies, the corresponding non-performing loans were packaged and sold to the four major asset management companies for disposal. Banks digest bad loans through provisions and write-offs. Because many places have set up companies similar to the four major financial asset management companies. So there are more disposal channels.

Because some asset management companies, in order to maximize profits, divide their asset packages into several small packages and sell them to other companies and individuals by packaging and selling. Among them, there are some new contradictions in selling to individuals, such as giving away people with underworld nature, which has caused great trouble to the defaulting units and even some vicious incidents. This needs attention.

Of course, some banks deal with it through debt restructuring, and it is the best way to convert non-performing assets into debts.

According to the current management mode, bank loans are generally divided into five levels: normal, concern, secondary, suspicious and loss. The latter three categories are commonly known as "bank non-performing assets", that is, "bad debts" and "bad debts" mentioned by the subject. Non-performing loans do not mean that you will not receive a penny. What they mean is that banks will still lose their principal after exhausting all cashback means. The proportion of principal loss of subprime, doubtful and loss loans is getting higher and higher between 30%- 100%.

At present, commercial banks mainly deal with non-performing loans in four ways: collection, write-off, package transfer and debt restructuring.

According to the regulations of China Banking and Insurance Regulatory Commission, loans are divided into five categories: normal, concerned, graded, doubtful and loss. Losing a loan is bad debt.

How to deal with non-performing loans, one is to continue to collect and demand repayment through litigation, or to dispose of mortgaged assets through litigation or demand repayment from guarantors, and the other is to form non-performing loan assets and sell them collectively, usually to non-performing asset disposal companies. In order to dispose of the non-performing loans of the four major banks, four non-performing loan disposal companies were established.

1April, 1999, the general office of the State Council forwarded the opinions of the People's Bank of China, the Ministry of Finance and the China Securities Regulatory Commission on the establishment of China Cinda Asset Management Company. 1In April, 1999, China Xinda Asset Management Company, the first asset management company in China, was established in Beijing and received 373 billion non-performing loans from China Construction Bank.

There is almost no possibility for banks to recover the principal and interest of such loans, not only all the principal and interest are lost, but also some other expenses such as legal fees may be paid. Generally, the treatment of loss-making loans is after litigation.

According to the management authority of banks at all levels, report for verification, and deal with relevant responsible persons at the same time. There are many reasons for enterprises to default. Not all debts are malicious defaults. Many business owners only have temporary liquidity difficulties or are affected by upstream and downstream fluctuations in the industry, resulting in temporary liquidity tension. For such enterprises that have not lost their hematopoietic function in essence, banks can renegotiate the repayment period with enterprises, give them a certain grace period, lower interest rates, re-inject a sum of liquidity to revitalize enterprises and restore non-performing assets to normal.

Bad debts are called bad assets in banks, and banks have many ways to deal with bad assets.

First, collect. Now, after the formation of non-performing loans, banks will sue borrowers and guarantors and enter litigation procedures to preserve the statute of limitations, which is also an effective way of collection.

Second, write off bad debts, write off bad assets with their own profits, and improve the quality of their assets, but bad debts have not disappeared, and debtors still have the obligation to repay.

The third is to package one or more bad debts and sell them to others, which is actually a transfer of creditor's rights.

Fourth, paying debts with assets. If the non-performing loan is mortgaged and the value of the mortgage is sufficient, then use the mortgage to write off the loan.

The fifth is debt restructuring, which reorganizes the accounts by borrowing new loans, changing borrowers and transferring debts, so as to turn them into normal loans.

Uninvited banks generally handle non-performing loans and bad debts according to the following steps:

1. Withdraw loan loss reserve. When commercial banks issue loans, they usually arrange loan loss reserves according to a certain proportion of the loan balance. For example, the general loan loss reserve is 1%, and there is also a special reserve.

2. Selling non-performing loans. In the late 1990s, in order to divest the non-performing assets of the four major banks, the state established four asset disposal companies, Huarong, Great Wall, Cinda and Dongfang, to deal with the non-performing assets of the four major banks. Generally speaking, the four major asset management companies have one-to-one correspondence with the four major banks, such as Huarong Counterpart Construction Bank.

Although it also includes a series of means such as negotiation, prosecution, selling assets and restructuring. In the final analysis, useless things are always useless and often sold to the corresponding asset management company at a discount.

All that can be sold is a discount. Everyone is also concerned about the bad debts of banks? The bank made a lot of money. Why don't people care?

Bank bad debts and bad debts here, in my understanding, should be loss loans in the classification of bank loans. There is almost no possibility for banks to recover the principal and interest of such loans, not only the principal and interest are all lost, but also some other expenses such as legal fees may be paid. The treatment of loss-making loans is generally to declare and write off according to the management authority of banks at all levels after litigation, and to deal with the relevant responsible persons at the same time.