AZE.US
Borrowers facing reduced income or temporary financial hardship cannot unilaterally suspend loan payments for three to five years under Azerbaijani law, an economic expert has said.
Any payment freeze requires the bank’s approval, economist Akram Hasanov said. Banks rarely agree to such arrangements and, when they do, the deferral typically lasts only several months.
A lengthy suspension of payments creates financial and regulatory risks for lenders. A loan may be classified as nonperforming, requiring the bank to set aside substantial reserves to cover potential losses. The original loan term may also expire during an extended freeze.
“That is why banks usually take such cases to court,” Hasanov said.
Borrowers struggling to meet their obligations should contact their bank before missing payments and discuss possible debt restructuring. Available options may include revising the repayment schedule, extending the loan term, temporarily reducing monthly payments or granting a short payment holiday.
However, payments cannot be suspended for three to five years without the lender’s consent. If the parties fail to reach an agreement and the borrower stops making payments, the dispute may ultimately be taken to court.
AZE.US