Debt collection – how to protect yourself from it?

Many of us wonder what needs to be done to protect ourselves from debt recovery. We take out loans for those in debt, sometimes even several at a time. And this is where our problems begin. Of course, this does not apply to everyone, but according to statistics, people are very indebted.

This is mainly due to a lack of awareness of the consequences of defaulting loans or advances on time. Loan companies that provide loans for free attracting their clients with promotional loans, however, when the due date expires and the money is not in the lender’s account, interest increases.

In addition, an effective body called debt recovery enters the path of cash recovery, which will try to recover the debt to the last penny.

What is debt collection?

What is debt collection?

In a situation where the deadline payment expires, usually the company where we took out the loan without a loan is reminded of the lack of payment. Most often, we can receive such notifications by email or telephone.

If this does not help, the lender sends letters to our address. Ignoring all these elements, we expose ourselves to high costs associated with interest on the loan and the assumption of our debt by the company that will be collecting the debt.

Most often debt collection consists of 5 stages:

1. Unpaid liability – in order for us to be able to say that debt collection has begun, there must be a lack of timely repayment of the loan or credit. In most cases, debt collection activities are commenced after 60 days (in the event of failure to settle the liability) from the date on which the repayment date has passed.

2. Amicable debt collection – a stage that cannot be skipped, ie mediation. At this point, the debt collection company is trying to reach an amicable settlement with the debtor before the case goes to court. For people who are dealing with debt collection, the most advantageous solution in the whole case is this element. Getting along with a debt collector is the best way because:

  • thanks to this, the debtor can avoid entering the BIK or KRD databases;
  • we avoid the entire lawsuit that may result in a bailiff’s execution;
  • protects the debtor against court costs that may result from disagreement and re-directing the case to other authorities.

3. Court debt collection – if the debtor does not want to settle the matter amicably, the debt collection department is forced to send the case to court. When the debt collector proves to the court that he is not willing to agree with the debtor, it works very much to the disadvantage of the person who is not paying the debt.

4. Court order for payment – if the court receives complete documentation regarding the debt and considers that it is justified to enforce the claim, it issues a payment order. In most cases, the debtor has little room for maneuver after the court’s judgment. The only thing he can submit is an application for an anti-enforcement action.

5. Bailiffs – the last element of debt collection is the actions of a bailiff who, having a court order for payment, executes bailiffs. At this point, the question may arise: what can the bailiff take and what cannot? It is worth reading our article on this topic.

Debt collection and bailiff enforcement

Debt collection and bailiff enforcement

The loan for the indebted attracts its clients with many things – long repayment period, high loan amounts, little formalities. However, before you sign the loan agreement, you need to calculate exactly what amount we need and how many installments we can pay it back. Most often, we choose too short a term and then we can’t copy with the repayment. Which in turn leads to debt collection.

People often confuse bailiff enforcement with debt collection. These are two different bodies that operate under separate laws. Debt collection is the first element that will meet every person who does not pay installments. Before the case is taken over by a court bailiff, the debt collector tries to settle the case without unnecessary involvement of government officials.

He has limited enforcement rights, but debt collectors have their own ways to recover the debt for the creditor. However, when their work is ineffective, the case is taken to court and only then the bailiff’s execution takes place.

Debt collection – what rights do debt collection companies have?

Debt collection - what rights do debt collection companies have?

While trying to recover money from the debtor, loan companies report the debt to institutions that specialize in it. Although more and more often lenders have their own debt collection department. It may seem to us that companies getting debt can do anything, and this is not true. There are certain tasks that debt collection companies can do, and if in our opinion their tasks go beyond their area of ​​activity, we can file a complaint against the debt collector.

The main rights of debt collection companies include:

  • contacts with the debtor via email as well as by phone. The latter are more effective because the email can be overlooked and calls to the phone can no longer. In practice, unfortunately, it is the case that if we do not answer the phone, the consultant will try to contact us at various times. It is better to answer the phone and talk to the debt collector;
  • an attempt to recover the claim against the creditor by proposing repayment in installments;
  • when the lender grants power of attorney to a debt collection company, it can send a request to the court for payment of debt.

It is also worth checking before contacting the debt collector whether the debt has expired by accident. If we notice this, it is a clear signal for us that we do not have to pay back the debt and it is best to inform the debt collection department about it, because debt collection is not justified at this time. However, it should be remembered that creditors watch over the limitation period and rarely allow it to expire.

Debt collection – how to prevent it?

Debt collection - how to prevent it?

4 gold tips that will protect you from debt collection:

  1. Borrow wisely and responsibly.
  2. If you have problems paying back the loan, contact the lender immediately. It also wants to get the money back, and it can also offer you several options, such as extending the repayment period.
  3. End the debt collection case amicably – get along with the debt collector. Thanks for that you will avoid unpleasantness during a bailiff’s visit.
  4. Check that the debt has not expired.