What institution is a debt collection company and how does it operate? What activities is it entitled to? A debt collection company helps people, or the opposite? We will try to give you accurate and reliable answers to the above questions in the article below. We invite you to read!
Debt collection and negotiation
Debt collectors have many negotiating competences. This awareness is increasingly breaking through society. For this reason, debt collectors are received relatively positively, bailiffs – on the contrary. It cannot be otherwise, because each debt collection company that exists on the market declares that the purpose of its activity is to develop consent with the debtor, not his intimidation or the pursuit of the goal “after the corpses” so as to receive the largest amount of money. Debt collectors are human, they can talk to people in debt to find a solution that will satisfy both sides. During negotiations, it is also made clear to debtors that it is in their interest to pay back the debt. This approach fundamentally changes the optics.
Is it worth conducting talks with debt collection companies?
The answer to this question is simple: yes! Even the atmosphere of cooperation pays off for both sides. The debt collector , almost like music, alleviates the customs between the two parties to the conflict – the creditor and the debtor. Is it therefore justified to state that the bailiff is an active party and the debt collector is passive? Yes, provided that if the term “activity” we understand behaviors such as harassment or psychological violence.
The methods of operation of debt collection companies are to contact the debtor in order to convince him to pay, to conduct considerations on redefining its terms so that the repayment of obligations is as uncomfortable as possible for the debtor consumer.
Debt collection authority
A creditor (i.e. a client of a debt collection company) does not use its services to provide the debtor with new interlocutors. The purpose of the actions is clearly defined: we are talking about recovery. Debt collection companies don’t stop at just negotiations (which are very effective by the way). In addition, they also help creditors in accounting matters by organizing it, so that they take some responsibility on their shoulders.
Can debt collection be referred to a bailiff?
For people who are indebted, there is a colossal difference in the behavior of the bailiff and the debt collector. It is already visible at the time of contact. Creditors usually hire a debt collection company first. It is only when her actions do not bring any satisfactory results that the case is taken by creditors to court. Then the favorite of all debtors – the bailiff – starts his activities.
As you know, bailiffs take a number of equipment, bank accounts or real estate. Collection agencies can offer creditors representation before a court. When the bailiff takes up the debtor’s remuneration, it is clear that part of it will go to his account. So some may think that the debt collector works for charity. What’s the truth? Diametrically different.
Income of debt collectors
Bailiffs are public officials, thanks to which they have many rights and legal protection. Debt collectors, in turn, operate on the basis of private orders. At the very beginning, they verify that the debt exists. Then, shortly before the expiry of 60 days from the date of payment, they contact the debtor and ask for the reason for the delay in repayment. Most often it is telephone contact, which in less than half of the cases (45%) gives positive results.
However, debt collection companies want the effectiveness at this stage to be as low as possible. They are very kind – they do not demand commission for the first effective contact. In a situation where such a prompt is ineffective, proper debt collection begins. This involves sending debtor’s requests for payment, sms, emails and litas. It also happens that debt collectors arrive at the place of residence of the debtors. In addition, it is worth remembering that debt collection companies deal with adding debtors to registers, such as BIG or KRD.
Debt collection proceedings
The last step is recovery proceedings – this is to transport consumer data to one of the debtors’ databases. This is the final moment – the debt collection company then charges a considerable commission. Until recently the cost of recovery was borne by the creditor. Today the situation has changed. The debtor is responsible for paying them. From the above information it is clear that the actions of debt collection companies are not entirely positive for debtors – debt collection is not strewn with roses. Debtors who have problems with paying off their debts must first pay the original debts and then pay the debt collection company.
The important role of detectives
There are smart people who incur a large number of commitments and then hide in order not to pay off their debts. Debt collection companies very often use the services of detective companies to find unreliable consumers.