Debt collection what?
Debt collection is nothing new. It has been present in human life since Antiquity. However, as you can guess, the nature and behavior of debt collectors has changed. Currently, the debt collection process consists in claiming ownership, however, all activities are regulated by law. Therefore, it is a legal process and should usually only cover actions contained in regulations. In our country you can specify amicable, judicial, Loan, post-mortem and criminal debt collection. Each of them will be presented in the next stages of debt collection activities step by step. Most companies have a Customer Service Department plus a Debt Collection Department. In the initial stages he is the one who deals with the investigation of property. How does it look like?
If for some reason we have not been able to meet the repayment deadline, we must take into account that the loan company will start debt collection proceedings against us to recover the money given to you. Debt collection begins when the lender is forced to remind the client that the debt has been repaid. He tries to put pressure on him – he calculates the consequences and costs that, due to evasion of debt, begin to increase gradually. If we have the opportunity, let’s try to use other methods of fulfilling the loan agreement before, because the debt collection costs are really very high.
It is worth being aware of this when deciding on this form of loan – this is the fastest and least problematic way to obtain cash, but only if we are sure of its timely return. It would be useless to tell your friends about “thief’s payday loans” and curse on the procedures that companies use. We agree to them when we cooperate with them, so we can only blame ourselves.
The instant payday loan, although not a classic bank loan, does not differ from its repayment obligation. Let’s find out what are the next stages of attempts to force us to return the money until a Loan knocks on our door
Step by step – debt collection
It takes a long time for this black scenario to come true, so we still have a chance to avoid it. Most often we know in advance that we will not be able to pay the installment on time. Thanks to this, we can try to renegotiate the terms of the contract with the company, apply for refinancing the loan or extend the loan repayment time. Of course, these are not free services, because their financing may exceed the value of even half of our debt, and then the installment payment will be more calculated. At the same time, they are a kind of solution for those borrowers who know that although they do not have the cash they need now, they will have it later.
By the way, let’s add that the salvation for the group of customers with the largest amounts of unpaid debt was the introduction of the “anti-usury” act. Its task is to regulate regulations regarding loans taken out of non-bank companies. Some of them reduced the cost of charging late loans, and therefore for debt collection costs. Currently, they cannot be higher than 15% on an annual basis.
Non-bank companies react to a lack of debt repayment within a few days – let’s not delude ourselves that they will forget about us. Debt collection begins with sending notifications about the expiry of the deadline, usually in the form of an email or sms. If they fail to convince the customer to return the money in this way, the reminders will become much more official. It is possible that the creditor’s representative will contact us by phone, or that the company will send us a registered letter. Important information – if we do not confirm receipt twice, it will be treated as received. Each of these admonitions increases the amount of our debt.
Making a phone call, sending a letter or text will cost us from a few to several dozen zlotys and these are not one-time costs. This stage is still some kind of direct negotiation between the debtor company, which does not mean that they are not recorded in the Credit Information Bureau. Let’s take into account that this is the last call for a request to extend the repayment deadline or to spread the debt in installments – then it will no longer be possible. It is also the border moment before entering us in the National Register of Debtors.
A case for a debt collection company
If the reminder sent by the lender does not have the desired effect, he can refer the matter to an external debt collection company. He has much less rights than a Loan, while the purpose of the work remains the same – to enforce debts from the debtor. What cannot a debt collection company? First of all, threaten the client and share his personal data and information about the amount of his debt. Such an entity should also not act in any way to the detriment of the debtor – for example by violating his personal, movable, his freedom and health. A representative of a debt collection company cannot, therefore, enter the borrower’s home without his explicit consent. He also must not secure or take anything that is part of his property. The borrower may report any offenses against this background to the Office of Competition and Consumer Protection, as well as to the police or the prosecutor’s office.
A Loan enters the stage
A creditor who, despite having remitted the case to a debt collection company, did not receive a refund, directs it to court. Thus, the person responsible for recovering money becomes a Loan. It is not possible to clearly indicate after what time this happens – the procedure, depending on the company, may take several months. The debtor is informed about these activities through official correspondence. The creditor has the right to determine by what means the debt can be enforced, the other activities are carried out by the Loan. The list of his rights is much longer than that of a debt collection company. It may, inter alia, requisition the debtor’s assets or collect part of his remuneration from his bank account. At this point, there is no room for negotiation.
Debt collection in practice
The mechanisms of action of debt collection are best explored on specific examples, so let’s check what it looks like in the three companies we selected: Filarum, Vivus and Ferratum Bank.
At Filarum, debt collection begins by sending four urgent SMSes (paid USD 5 for each) and one letter that costs USD 10 to the client. Therefore, we will pay relatively little, for USD 30 per month, for debt collection in Filarum. In fact, it depends on the borrower how quickly the company will forward the case – so it is worth showing at least a minimum willingness to cooperate and repay the loan. Let’s try, for example, to talk about spreading debt into installments.
Did you know that before the case goes to the Loan you still have the chance to get a loan online? You just have to choose the right company and you’re done. Below are some lenders who agree to grant a loan when there is information on the repayment delay in the database. You can find more about this on the lender’s website or in the review!
Field debt collection and Internet users’ experience
Searching online forums regarding debt collection, we will find entries published by both debtors and creditors. Despite constant changes in legal regulations regarding actions aimed at recovering debts, there are still situations that deviate from the norm. One of the problems that Internet users share is persistent harassment in the form of phone calls or visits. It happens that debt collectors do not agree to repayment in installments or, after reaching a settlement, they transfer the debt to other companies. How do Internet users handle such situations?