It’s easy to take, harder to give back – this is also the case with payday loans and other quick and easy ways to borrow money. The main rule not to fall into a spiral of debt is to repay your financial obligations on time.
The more so that in the case of short-term loans, the costs of their extension are considerable and can only worsen our situation. What to do if it’s too late and the debt goes further? When are we at risk of recovery and when will the bailiff? Learn the differences and ways that can save you from the serious consequences of non-payment.
Consequences of failure to pay the payday loan on time
The first payday loan for free is only possible if we usually give it away within 30 or 60 days. After exceeding this repayment time, a problem begins to appear which – if we neglect it – can quickly ruin us financially.
Remember, however, that in the event of financial difficulties, we can apply to the lender to extend the payment deadline, which will be associated with an additional cost, but it is much more secure and cost-effective than avoiding debt repayment.
Other companies granting loans outside the bank also use other methods of debt recovery, e.g. field debt recovery or assignment of receivables to a third party.
When does debt collection start?
The first steps in debt recovery are very quick, because after a few days of not paying the payday loan on time. The entire recovery process usually begins innocently with delicate reminders and reminders via SMS or email. For more invasive to the borrower – phone calls from the creditor or registered letters, which, even after being rejected twice, are considered accepted.
Each debt collection action, and there are usually more than one, increases the debt to the lender. Therefore, the sooner we pay off the debt, the better and the lower the costs of debt collection we will pay. An additional advantage of “getting along” at the initial stage in the delay in repayment of the loan is the possibility of spreading it into installments or another solution favorable to the client. It’s only worse later.
If any reminders and reminders have not resulted, the lender passes the case on – either for further recovery in your company’s department or to an external debt collection company, which generates a much higher cost.
Last resort, or bailiff execution of property
After unsuccessful debt recovery – whether internal in the creditor’s company or outsourced, the debt case goes to court and this applies to any unpaid liability for a minimum of USD 200.
During the proceedings, the court checks the legitimacy of the debt, the debtor’s situation and, if it accepts the creditor’s claims, calls him again to pay the debt. If this does not happen, the next step is to issue an enforcement order, which after a month obtains an enforcement clause and is handed over to the bailiff. The debtor is informed about the whole process by an official letter from the court.