The debt collection process – how long it takes and what is it
Did not pay off the loan on time? This is quite a common phenomenon and while a delay of several days does not have serious consequences, a longer delay and ignoring attempts to contact the company with which we have concluded a contract may have serious consequences. One of the most frequently searched terms in the Internet search engine is “debt collection as long as it takes”, so today we come with the answer to this question. Check how long it will take before the case goes to a debt collection company or court.
What is debt collection ?
Debt collection (comes from the Latin word “vindicatio”) was already used in antiquity. On the other hand, according to the Dictionary of the Polish Language, the word debt collection means: “pursuing your rights to goods or payment in a manner specified in the regulations”. This explanation fully describes:
- purpose of collection – recovery of money / things due,
- nature of debt collection – acting in accordance with applicable law.
We can handle the debt collection process ourselves or outsource it to specialized entities. Detailed provisions of the Civil Code also allow you to sell your debt on special exchanges.
How long does recovery take?
The first step is to settle the matter amicably. It consists in reminding the debtor to repay the debt. The contact takes place in several ways, most often it begins with sending an SMS with a reminder information and ends with a visit to the debtor’s place of residence. At this stage, it may also send the debtor requests for payment with a warning about the intention to be entered in the BIG and pre-court requests for payment.
Debt collection activities are undertaken as follows:
- a prompt sent electronically in the form of an SMS,
- a prompt sent electronically in the form of an e-mail,
- automatic voice message,
- telephone contact,
- letter reminder,
- a visit to the Borrower’s place of residence.
It often happens that the actions of the lender aimed at amicable resolution and recovering the money are ineffective. In such a situation, the case is transferred to a company that specializes in debt enforcement. Depending on the case, as well as the debtor himself, the amicable stage usually takes about two months. If the debtor decides to resolve the debt problem amicably, in consultation with the debt collector, establish a reasonable and realistic debt repayment plan (and he will comply with it) – the costs of debt collection will end up with interest. However, if he avoids contact with the advisors of a debt collection company or a detective agency, additional costs may arise. If nothing changes during this period, the debtor will still not be willing to cooperate, then the case goes to court recovery.
Court debt collection
When it comes to court debt collection, the situation is much worse than in the case of amicable debt collection, because we are threatened with high interest, court costs and costs of bailiff enforcement. At this stage, the bailiff begins to act, which, unlike the debt collector, can take our real estate or money on the bank account, and in addition, we can be entered into the KRD, which results in the situation when we need money or buy something in installments – we will not get neither money nor any items in installments. The duration of the court and enforcement stage depends on the time the case is examined by the court and the course of bailiffs’ activities.
Debt collection is a process that can be complicated and long, but can also be quick and easy for the debtor. On the Internet you can find a large amount of advice from Internet users who recommend that you ignore attempts to contact a debt collection company, not this way. It can only make our situation worse, because it will not make it better. In the end, it is best to conclude an agreement with a debt collection company because it protects us not only against the increase in costs related to court proceedings and enforcement, but also we will avoid the actions of the bailiff.
Settlement in court
Recovering money is neither easy nor fast. It all depends on the goodwill of both parties. Of course, the best solution is to recover your money at the amicable settlement stage. This stage does not generate additional costs for both parties. If this is not done at this stage, then more serious steps should be taken, which unfortunately involve additional waiting time to get your money back.
Many court cases drag on for years, although at first glance they seem very simple. The debtor has not repaid the loan, has not paid the invoice or is in arrears with payments for services rendered. The tardiness of the courts in this type of case is appalling, which discourages many creditors from embarking on this debt collection path. Even if you have already obtained a court judgment ordering bailiffs, you should not open the champagne yet. Also, such activities may last several or even several dozen long months.