Question from a reader:
I have a consultation regarding personal rehabilitation. Currently, I am using a mortgage and Orix ONE (a loan of 10% of the property price), both borrowed from the same financial institution. A second-ranking mortgage is set on Orix ONE. I have other debts as well and am considering personal rehabilitation, but I am worried about whether I
can keep my home. 1. Even if the lenders for the mortgage and Orix ONE are the same, is there a possibility of being able to keep my home while undergoing personal rehabilitation? 2. Does having a second-ranking mortgage on Orix ONE often mean that the special provisions for the mortgage cannot be used? 3. If there are those who have kept their homes while undergoing personal rehabilitation or are knowledgeable about this, I would appreciate it if you could share how you dealt with it. For reference, I am a company employee in my early 30s with over 10 years of service. My family consists of my spouse and two elementary school children. The mortgage is approximately 33 million yen, Orix ONE is about 3.8 million yen (with a second mortgage), and I have about 11.2 million yen in other loans. I hope to recover my credit while protecting my home within 3 to 5 years.
Legal Background on Personal Rehabilitation
Personal rehabilitation is a system that allows debtors to reorganize their debts under certain conditions and protect their assets, such as their homes. For those with a mortgage, this offers a significant advantage as it allows them to aim for rehabilitation while keeping their homes. However, personal rehabilitation comes with certain conditions and restrictions, and careful judgment is required, especially in cases involving mortgages of different priorities. As mentioned in the reader’s question, if the lenders for the mortgage and Orix ONE are the same, and a second-ranking mortgage is set on Orix ONE, the process of personal rehabilitation becomes more complex. Legally, it is possible to keep the home during the debt restructuring process, but several conditions must be met.
Analysis from a Legal Perspective
First, to keep the home while undergoing personal rehabilitation, it is common to utilize the special provisions for mortgages. To use this provision, the following conditions must be met: 1. The mortgage must be based on the special provisions for housing funds. 2. The value of the home must exceed the remaining balance of the mortgage. If Orix ONE has a second-ranking mortgage, it may affect the application of the special provisions for the mortgage. Specifically, since the financial institution holds a second-ranking mortgage, it is possible that they may file an objection to the rehabilitation plan. This becomes an important factor from the perspective of protecting the rights of creditors as the personal rehabilitation process progresses.
Practical Approaches to Keeping the Home
To actually keep the home, the following approaches can be considered: 1. Negotiation with creditors: Before considering personal rehabilitation, it is important to negotiate directly with the lender of Orix ONE. Especially if it is the same financial institution, there may be room for discussion. There may also be flexibility regarding the second-ranking mortgage. 2. Support from experts: It is essential to consult with legal professionals or judicial scriveners to develop a concrete rehabilitation plan. They can provide appropriate advice based on past cases. 3. Review of household finances: It is important to review income and expenses and establish a future payment plan. To protect the home, the rehabilitation plan must be realistic, requiring careful judgment.
Psychological Perspectives
When considering personal rehabilitation, the psychological aspects cannot be ignored. Particularly, the anxiety of losing a home and the stress it may cause to the family can become a psychological burden. Here are some points to consider from a psychological perspective: 1. Managing anxiety and stress: Debt issues can cause mental stress. Receiving psychological support can help alleviate anxiety and promote positive thinking towards rehabilitation. 2. Family cooperation: It is important for the family to work together and tackle the problem collectively. Especially with small children, maintaining communication within the household and deepening mutual understanding can contribute to stress reduction. 3. Maintaining motivation: Setting goals and achieving them step by step can help maintain motivation. The process of personal rehabilitation is also a challenge, and accumulating successful experiences is important.
Ethical Considerations and Social Responsibility
When considering personal rehabilitation, it is necessary to also consider ethical aspects and social responsibilities. Debt restructuring is not merely a legal procedure but deeply reflects one’s relationship with society. 1. Ethical relationships with creditors: When undergoing debt restructuring, it is essential to strive not to damage the trust relationship with creditors. Particularly when holding a mortgage, it is necessary to maintain a good relationship with the financial institution. 2. Importance of personal responsibility: It is crucial to remember that debt is a matter of personal responsibility. However, when past choices have led to the current situation, a social perspective that provides opportunities for a fresh start is also necessary. 3. Utilizing social support: It is also important to take advantage of social support and systems available for those facing debt issues. By utilizing local consultation services and specialized institutions, one can obtain appropriate information.
Practical Advice and Conclusion
To successfully undergo personal rehabilitation and protect your home, it is necessary to comprehensively consider legal, psychological, and ethical perspectives. Here are some specific pieces of advice: 1. Consult with experts: If you have concerns or questions regarding legal procedures, consult with an expert as soon as possible. While there may be consultation fees, receiving appropriate advice can yield significant long-term benefits. 2. Improve negotiation skills: If you lack confidence in negotiating with creditors, developing your negotiation skills can be effective. Reading specialized books or attending seminars can enhance your negotiation abilities. 3. Organize emotions: To sort out emotions related to debt issues, consider keeping a journal or seeking counseling. Understanding and managing your emotions can help you calmly reassess the situation. Personal rehabilitation is an important means of making a fresh start while protecting your home. By considering not only legal aspects but also psychological and ethical dimensions, a comprehensive approach can lead to better outcomes. I encourage readers to share any questions or experiences they may have.
