Retired man claims banks lent him poorly, asks for his own bankruptcy

A retired member of the Argentine Armed Forces has initiated an unprecedented legal action against several financial entities, including banks, credit card issuers, a fintech company, and a debt collection agency. The retiree is seeking to nullify and readjust his debts, or, in the alternative, has requested his own bankruptcy as a non-merchant individual.

The legal filing asserts that the man was driven into an "objective impossibility of fulfillment." This situation, the lawsuit claims, arose from a series of loans granted without adequate evaluation of his ability to repay. The case gained attention amid rising default rates in Argentina, with several banks offering debt refinancing programs.

However, the retiree argues that these standard mechanisms ultimately exacerbated his financial problems. The lawsuit, filed in the Federal Justice of Misiones, names Santander, Banco Nación, the Institute of Assistance for the Payment of Retirements and Military Pensions (IAF), Mercado Pago, and various credit card administrators and collection agencies as defendants.

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Not a habitual and irresponsible defaulting debtor

According to the complaint, the man went from having no significant prior debts to accumulating obligations that far exceed his income. The filing emphasizes that he is "not a habitual and irresponsible defaulting debtor" and did not become insolvent intentionally. Instead, he argues, he became over-indebted while trying to meet payments on previous loans and avoid default.

The situation reportedly began on January 15, 2024, with a UVA Black loan from Santander for $1.47 million pesos, intended for home renovations. The initial installment was $35,402 pesos. This was followed by a series of subsequent loans throughout 2024, totaling approximately $49 million pesos from the initial lending. However, the reported debt ballooned to $83 million pesos with just one private bank. The lawsuit contends that these credits were primarily used to cover previous loan installments, credit card payments, and daily expenses, demonstrating a clear "cascading debt scheme" and "systemic induced over-indebtedness."

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Not only 'debt,' but 'systemic induced over-indebtedness.'