When we have problems paying back the debt, it can be taken over by a debt collection company. If you are in danger of such a situation, it is worth knowing what the powers of the debt collector: they are different from the powers of a bailiff. What can a debt collector do and what he must not do? We explain!
What is debt collection?
If we are in arrears with repayment of a bank loan or payday loan in a loan company, our case may be in the hands of a debt collection company. Its task is to enforce debt, in other words, to recover a loan or credit that we have not repaid on time.
The institution for which we owe money can enforce debt in court or out of court. If he decides to take legal action, our case will be taken over by a bailiff.
Most often, however, banks and loan companies choose an out-of-court path to start with, and therefore, debt collector is involved in the execution of our debt. This is because the actions that the debt collector undertakes are referred to as soft debt collection – the debt collector tries to recover the debt amicably.
The purpose of the debt collector’s activities is to recover money by way of settlement. What exactly does this mean? What powers does the debt collector have and what actions can he take?
What can a debt collector do?
Not everyone is aware of the fact that handing debt enforcement over to a debt collector is not a bad solution for those in debt. The debt collector’s task is to settle the debt by way of settlement. It aims to achieve two main goals: first, find out why there was a delay in repayment. Secondly, agree with the debtor regarding repayment.
To achieve their goals, the debt collector primarily makes postal and telephone attempts to contact the debtor. His competences are limited to persuading the debtor to cooperate in the field of debt repayment. To persuade the debtor to agree, the debt collector can show him the consequences that will occur in the absence of a settlement.
Therefore, the debt collector’s competence is limited to sending us reminders and information, telephone contact and arranging a meeting (after the debtor’s consent) to determine an amicable manner of reimbursement.
It is worth remembering that if we ignore the actions of the debt collector, the creditor will probably decide to enforce the debt in court. Therefore, it is worth trying to reach an agreement with the debt collector – if we present our problems to him, he will help us set debt repayment conditions that we will be able to meet.
What cannot a debt collector do?
Debt collector’s competences are relatively low. It is worth realizing that a debt collector cannot:
- request disclosure of your account status
- write down or seize our property,
- take up salary
- take something valuable from our home,
- enter our apartment if we do not agree to it,
- get in on us at work,
- disclose information about our debt to third parties,
- disclose information about our debt to our employer,
- distribute information about our debt in any way,
- talk about our material situation with bystanders (e.g. neighbor),
- post information on our debt in public places.
Let us also remember that the debt collector cannot intimidate us in any way. He only has the right to inform us about the possible consequences of non-payment of debt. He cannot frighten us, harass or blackmail us.
What to do if the debt collector exceeds his powers?
Actions taken by the debt collector must be absolutely lawful. If we are victims of blackmail, threats or harassment, action must be taken immediately.
We can report this type of case directly to the creditor, as well as to the police or the prosecutor’s office. Each debt collector has an absolute obligation to comply with the law and may not exceed his powers to enforce debt.
What to do if we receive a request from a debt collection company?
Don’t ignore a call from a debt collection company. If we receive the letter, let’s get acquainted with its content, check whether it complies with the regulations and contact the debt collection company.
The correct letter should contain data such as:
- amount of debt,
- name and address of the creditor,
- the amount of default interest (together with information about the provision on the basis of which they were calculated),
- accurate data of the debt collection company,
- power of attorney number (the company receives it from the creditor, more simply, this is our case number).
The letter containing such data complies with the regulations, so we can be sure that no one is cheating on us.
After receiving the letter, it is best to contact the debt collection company. We should explain to the company representative why there was a delay in repayment, and suggest how we could pay the debt. The debt collector will probably propose to spread the debt into convenient installments, which we will be able to finance financially.
What is the risk of avoiding a debt collector?
If we ignore the debt collector’s actions, sooner or later the creditor will refer our case to court. Judicial enforcement of the debt will involve the transfer of the case to the bailiff. However, this one has much broader powers than a debt collector.
If you transfer your case to court, we also have to take into account the additional costs: we will have to pay for each reminder of late repayment, not to mention the ever-increasing interest. The sooner we reach an agreement with the debt collector, the lower the costs will be.
It should also be taken into account that the bailiff’s task will not be amicable debt enforcement. To recover the money he will use his rights, e.g. he will take the money on our bank account. For more on this, see the article “Can the bailiff may take the debtor’s bank account?” .
Debt collector and bailiff
The debt collector differs from the bailiff in both rights and scope of activities. The debt collector deals with amicable debt enforcement, whereas handing over the execution to the bailiff results in entering the court path. Therefore, the bailiff’s powers are of course much broader. For more on this, see the article “Windykator a bailiff – which vary in their actions?” .
Summary – what can a debt collector do?
As you can see, the powers of the debt collector are not very broad. His task is amicable debt enforcement. Therefore, if our case has been referred to a debt collection company, it is worth coming to an agreement with the debt collector. Thanks to this, we will avoid high costs associated with prompts and growing interest, as well as the transfer of the case to the bailiff.