Debt collection – what is it about?
November 27, 2019
According to the National Debt Register (KRD), over two and a half million Poles are in debt. However, the KRD database does not contain debts not exceeding $ 200. The total pool of liabilities is over $ 45 billion. Debt collection, especially for many entrepreneurs, is becoming a necessity. Debt collection can take both amicable and judicial form. A creditor who has a court order or an enforcement order for debt with an enforceable title may begin the debt enforcement process by reporting to the bailiff with a request to initiate bailiff proceedings.
What is debt collection?
Legal provisions According to the definition, debt collection is a process of recovering the creditor’s debt from the debtor. Depending on the individual case, it can take different forms. At the legal level, we can distinguish amicable (so-called soft debt collection) and court (so-called hard debt collection). Debt collection can also be treated as a collection of various activities – out-of-court mediation, legal and legal.
In the field of amicable debt collection, actions are carried out consisting in monitoring the debtor’s repayments and reminding him to repay the liability in the event of delays or non-payment. Actions may consist of sending letters or emails calling for payment, sending SMS messages or conducting telephone conversations and negotiations. Within the meaning of legal regulations, the above-mentioned actions cannot, however, be considered as debt enforcement (Article 844, Article 880, Article 889, Article 895 and Article 921 of the Code of Civil Procedure). This deadline is registered only for the activities of a court bailiff executing court orders or payment orders.
Court debt recovery is aimed at obtaining a court judgment or court order for payment, usually with an enforcement clause. If the creditor obtains such a judgment or order, then he has a legal enforcement title, which he can refer to the bailiff to start bailiff enforcement. Under it, the creditor’s debt can be repaid, among others by the bailiff taking property, movable property and income of the debtor. Detailed legal information regarding court debt recovery can be found in section X of the Code of Civil Procedure – “Enforcement proceeding. General Regulations”.
Bailiff proceedings and debt collection step by step
The debt recovery procedure consists of four stages. The first three have already been outlined above – they are:
- a liability arises – e.g. as a result of unpaid invoices or based on a civil contract,
- amicable proceedings – information activities and sending reminders by the creditor to the debtor,
- court proceedings – aims to obtain a court judgment or court order for payment with an enforcement clause.
The next step is proper enforcement proceedings. It begins after submitting a request to initiate proceedings to the bailiff. It is worth knowing that the application should contain a description of the actions to be taken.
The most popular form of recovery is bank account execution. It runs with the help of a bailiff who “seizes” the debtor’s account or bank accounts to collect debts from them. In practice, the procedure takes place between the bailiff and the bank, without the debtor himself.
Debt collection in enforcement proceedings
It can also be done by attachment of a salary. The bailiff has the right to contact the debtor’s employer to directly take up part of his salary. In the case of an employment contract, the bailiff may take up to 50% of the monthly salary (60% for maintenance debts). There is also a lower limit – the debtor cannot be seized with such an amount of remuneration that would make his salary after deduction of attachment less than the minimum wage applicable in a given tax year.