You haven’t repaid the loan within the prescribed period? Read the text and learn everything about debt collection.
Probably each of us once met the notion of debt collection. This is not surprising, because in the era of widespread Polish debt, this term is pronounced on various occasions and in many situations. For most, it is associated with other popular words, such as debtor, liability, debt or claim. In this text, we will try to explain the essence of this concept, and also explain the whole process of redress step by step.
It is certain that few of us would like to deal with her. And it is not only about indebted persons against whom it would be conducted, but also about creditors. The process is lengthy and quite complicated at many stages.
Debt collection – old and modern definition
Let’s start with what debt collection really is. It is literally pursuing your claims. Already in Roman law there was an institution rei vindication, the purpose of which was to recover things owned by an unauthorized person. At present, it is simply asserting ownership by all means available under the law. It is fully legal and if it does not break the law, it is permissible in all cases of violation of our property. There are several types of it, and the basic breakdown concerns amicable and judicial recovery.
Call – pre-trial action
One of the pre-trial, or amicable, forms of recovery is a request for payment. In its content, the creditor must contain the most important data, such as the basis for the request, i.e., invoice, invoice, together with details of the liability. If the letter is not answered by the debtor, he should be sent another one, this time with the proviso that this is the last attempt to settle the case. If this does not work, the entrepreneur can take the case to court. It is important that he keep the confirmation of the delivery of individual calls, as this will be evidence in the proceedings.
Prompt before entering court
In many cases, mobilizing the debtor reminders sent via fax, e-mail or prompts are an effective solution. What are the latter? These are official reminders of the due payment. They may include a warning about the possibility for the creditor to take legal action or to enter the debtor in the relevant register. We wrote more about this in the article “Prompt – what is it and how much does the debtor cost?” .
The case goes to court
It depends only on the creditor. Many entrepreneurs do not want to go to court with the debtor because they are afraid of long and expensive trials. However, they have nothing to be afraid of, because all court costs will be paid by the debtor. Despite this, it is worth calculating whether it is profitable for us to hand over the case and whether the game is worth the candle. If we decide to do so, we should do it only when the debtor does not respond in any way to an attempt to amicably end the case. Time is also extremely important. The creditor should do so relatively quickly, so that there is no limitation. There are several types of proceedings: prescriptive, admonition or ordinary. Usually the case is conducted in the first or second, unless the amount of debt is not high, because then the proceedings can be simplified. Hearings take place in closed session, which means that the debtor or creditor do not attend them. The indebted person will later receive a court order for payment and the creditor must apply for an enforcement clause. What effects does it have? First of all, the bailiff’s initiation of enforcement proceedings. Its effectiveness, on the other hand, is made up of many factors, and the most important is whether the debtor has any savings or income from which to pay off debts. If there are none, it will be difficult for the bailiff to execute him.
Sale of receivables
One of the solutions to getting rid of the problem is to try the so-called assignment of receivables to specialist companies. This is an increasingly common method. The debtor’s creditor then becomes the entity to whom we sold the liability, and it is his shoulders to exercise the unfair borrower’s performance.
Bank’s enforcement order
When discussing the subject of debt collection, one cannot fail to mention the case where the creditor is a bank. If a loan or credit will not be repaid within the required deadline, the institution has the right to issue the so-called an enforcement order, i.e. a document whose power is almost equal to a court order. However, this is only possible if the customer agreed to voluntarily submit to execution when signing the contract. If this happens and the bank issues the document, the court checks its legality and gives it an enforcement clause. There does not have to be a hearing.
Debt collection – is it needed?
Analyzing the statistics presented from time to time by the National Debt Register, it can be concluded that it is necessary for entrepreneurs to function normally and debtors have less restful sleep. Research results show that as much as 70 percent Polish companies have a problem with timely recovery of their debts. The case concerned mainly small enterprises, and usually sole proprietorships, the owners of which do not have the strength to fight the court in a long-lasting manner with a dishonest or defaulting client.
Limitation of debt
If there is a limitation period, the debtor no longer has to pay the debt. For purchases, the limitation period is two years, all types of subscriptions or other periodic claims – 3 years. Tax liabilities expire after 5 years, and those towards the Social Insurance Institution after 10 years.