Both non-bank installment loans and popular payday loans are financial products that combine the ability to receive cash quickly. Most borrowers still do not analyze their situation and financial capabilities, counting on “quick cash”.
Signing a loan agreement without making sure that you can pay it back may turn out to be a “shot in the knee” after some time. What threatens the lack of timely repayment of payday pay? What are the consequences?
How can a creditor claim his money?
The loan agreement should contain the final date for paying back payday loans (usually 30 or 60 days). This date specifies the last day on which the borrower can return the liability with accrued costs (except for free payday loans). A person who is late with paying the loan on time must face unpleasant consequences. In relation to it, the so-called debt collection procedure.
Each entity has its own internal debt collection procedure, which may vary from one lender to another. The aim of the actions taken is to encourage the borrower to repay the loan with interest due. Loan companies begin the debt collection procedure by sending reminders to unreliable customers. These can be registered letters, SMS messages and e-mails. The lender can also contact the debtor by phone.
Each prompt sent is an additional burden for the borrower. The Anti-usury Act assumes that the maximum costs resulting from the lack of timely repayment of the loan may not be equal to more than 6 times the Good Finance rate. Currently, it amounts to 2.5%, so it cannot be more than 15% per annum.
Debt collection companies – when the debt remains unpaid
As a rule, loan companies whose debt collection activities do not bring the desired results, refer the case to an external debt collection company. External debt collection consists in the fact that it is not the lender who is trying to convince the borrower to pay the outstanding obligation, but the external company.
Debt collection companies try to recover money in every way possible. As a rule, they are adamant and the only argument that appeals to them is the repayment of the loan with interest. Debt collectors can call the debtor many times, and conversations with company representatives are usually very stressful. Collection agencies can also send letters asking for repayment. Visits to the debtors’ homes are also not uncommon (so-called field debt collection).
Any person who delays the payment of their liability should not avoid contacting debt collection companies. Although they are stressful, you can negotiate, for example, favorable conditions for repayment in installments. Avoiding contact, not answering phones, blocking calls – these solutions may bring apparent calm, but they are not the best way out. The decision to talk to debt collectors may also prevent you from going to court.
Court proceedings in case of delaying the payment of an obligation
If the recovery procedure of a loan company or external debt collector does not bring the expected results, the case may go to court. Currently, most loan companies use the Electronic Reminder Procedure, referring their case to an e-Court. The case is therefore somewhat simplified for lenders.
As a rule, the e-Court issues a payment order, which the debtor receives in writing. This is a commitment to pay the commitment within a maximum of 14 days. The debtor has the right to appeal against this decision. However, you should know that the order for payment issued by the court is a final execution order. Providing an enforcement clause results in the fact that bailiffs can be started on the basis of an order.
The case may also be brought before a traditional court, which will result in the receipt of a classic order for payment, also with a declaration of enforceability.
Bailiff proceedings in practice
The unpaid obligations go to the bailiff. He deals with debt enforcement. The bailiff has the right to pay debts, including to block funds on the bank account, attachment of part of the debtor’s remuneration or attachment of real estate or movable property belonging to the borrower. The bailiff can also take money from a pension.
Negative entries for GF and GFI
Any person who delays the repayment on time should take into account that the entry may be sent to the Good Finance Bureau (GF) and the Credit Information Bureau (CIB). This situation means that in the future the borrower will have problems with taking another non-bank loan or a traditional bank loan.
The exceptions are loans without GFI or GF. Debtors with negative entries in information offices cannot also receive home electronics and household appliances. In addition, problems may arise when signing a contract for a telephone or Internet subscription. Entries in GF or GFI may have negative consequences and significantly impede subsequent efforts to receive any financial support from the bank and the loan company.