Back-to-School Costs Drive Moroccan Families to Seek Bank Loans

Rushing to apply for bank loans as the school year approaches without carefully considering the implications could have disastrous consequences. Some people who apply for consumer loans from banking institutions may encounter financial or health problems, or circumstances that prevent them from meeting the remaining payments, says Mustapha Barhioui, legal advisor at Rue20. According to his explanations, the bank, as a creditor, initiates legal proceedings against the borrower to recover the loan balance, either by auctioning off the real estate property as part of what is called the mortgage realization procedure, or the recovery procedure for cars.

Fortunately, since 2011 and the adoption of Law 31.08 on consumer protection, what is called the judicial stay procedure protects this category of people, allowing them to turn to the president of the court to request a judicial stay and order the suspension of payments until the disappearance of the unemployment situation in case of job loss or unforeseen social circumstances, Barhioui points out. To support his words, he cites Article 149 of Law 31.08, which states: "Notwithstanding the provisions of paragraph 2 of Article 243 of the Chérifien Dahir of 9 Ramadan 1331 (12 August 1913) forming the Code of Obligations and Contracts, it is possible, in particular in the event of dismissal or an unforeseen social situation, to suspend the execution of the debtor’s obligations by an order of the president of the competent court, and it may be decided that the amounts due shall not bear interest for the entire duration of the judicial stay."

Two possibilities are available to the applicant:
• The judge can, in his order, determine the terms of payment of the amounts due upon expiration of the suspension period, without the last payment exceeding the initially set repayment term by more than two years;
• However, he can postpone the decision on the repayment terms until the expiration of the suspension period, the legal advisor further explains.