Cash loan for employees of financial institutions – where to look for offers?

When a potential borrower applies for a cash loan, the banks check it carefully. They take into account his income and are interested in where he works. If his place of employment is a financial institution, it is possible that such a consumer will receive an attractive proposal to take out a cash loan.

A favorable cash loan for bankers

A favorable cash loan for bankers

Some professional groups can count on obtaining more favorable credit terms in banks. How to find a cheap loan as a banker? It’s nothing hard. Many lending institutions give preferential treatment to clients who are “colleagues” for credit counselors. They can count on special credit terms.

Cash loan for bank employees can be granted immediately, under a simplified verification procedure, with a lower margin and commission. Banks are even willing to give up the commission for taking cash loans by employees of financial institutions.

If a person works in a company related to financial trading, they can find an attractive cash loan for bankers in many Polish banks. These are so-called loans for professional groups.

Where to get a cash loan for bank employees?

Where to get a cash loan for bank employees?

Millenial bank is an example of a bank that is able to offer interesting cash loan offers to employees of the financial sphere. It is a cash loan for bankers under the “Cash loan on attractive terms” offer. According to the bank’s requirements, the loan with APRC at only 7.08 percent an employee can use:

  • a commercial bank, cooperative bank or company from the capital group of such bank;
  • an insurance company or a company from its capital group;
  • cooperative savings and credit union;
  • brokerage house;
  • investment fund companies.

Millenial bank provides cash loans to bankers with a fixed, low commission of 2 percent. per year, with an interest rate of 5.5 percent, even for 108-120 months of lending.

Special mortgage for employees of financial institutions 2019

Special mortgage for employees of financial institutions 2019

Not only cash loans can be granted on preferential terms to employees of the financial sphere. Bank mortgages are also available. They may have a lower commission than the standard, lower loan margin, and even offer a fixed interest rate on the loan.

In general, both cash loans and mortgage loans for financial employees are more favorable offers than those addressed to all other bank customers. Such special conditions for selected groups of professionals is a sales promotion tool quite often used in banks.

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What is a debt assumption?

Debt assumption is also defined in the law of obligations and describes the transfer of an existing debt. The transfer takes place between two parties, from a debtor to a new debtor. Until the guilt is fulfilled, it does not have to stay with one person, but can officially change responsibility. Thus, the actual or original debtor is free from debt while another takes over. In fact, the debt is considered as a transferable legal object and also the creditor can change. Thus, even someone who has an open claim against a debtor, this transferred to another.

Differences assignment and debt assumption

A creditor need not ask his debtor whether he may hand over the responsibility or whether the creditor can change. As a result, claims are routinely transferred or sold to others, as is customary in companies and companies. The debtor only has to be informed about the change of creditor, but there are no further claims. If, however, the debtor wants to transfer his debt, it certainly requires the consent of the creditor.

Types of debt assumption

Types of debt assumption

There are two types of debt assumption. Once the liberating or private debt assumption and once the cumulative debt assumption. In the liberating or private takeover, the so-called old debtor is completely freed from his debt. The new debtor completely follows in the footsteps of the old debtor, with all rights and duties. In the case of a cumulative takeover, the existing debtor remains obliged. Both debtors thus remain joint debtors. However, this is not regulated by law, but of course as a joint debt. Legally regulated is only the liberating takeover and thus represents a disposition.

When does debt takeover take place in reality?

When does debt takeover take place in reality?

Why should someone take over the debt of another person, be responsible for it and be responsible for its fulfillment? In fact, this happens with real estate or loans and often also with spouses. For example, a real estate loan can run on a man who subsequently marries a particularly rich woman. This can now, to pay off the future common house, take the blame. Debt assumptions also occur when taking on contracts, such as when you take over the fitness contract of another person. Even if you take on a lease, which is usually difficult to cancel before the end of the time. Thus, it is not so rare that debts are transferred to another person. Of course, only if the new debtor has a certain benefit. So he may benefit from favorable interest from a contract or recognize other benefits.

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The best revolving loan in your personal account

A revolving loan – what is it?

A revolving loan - what is it?

Does your home budget need an injection of cash? This can always happen, especially during periods of increased spending. For example, before Christmas. What options can we then use? We can borrow from friends or family (but it is difficult to use this option in the pre-Christmas period), we can apply for a cash loan… or use a revolving loan in your personal account. A revolving loan is nothing more than a permanently available credit line. It can be used for any purpose. The basic feature of a revolving loan is the possibility of using the money granted by the bank several times – each repayment reduces the debt and allows you to use the funds again. Interest on revolving credit is calculated on the resulting debt. After paying off part of the debt, the bank charges interest on the remaining amount of the debt, not on the whole.

Revolving loan in the account – ranking

Revolving loan in the account - ranking

We sent a questionnaire to the banks, in which we asked them to send the conditions on which they would grant credit in a personal account to a customer who has had a personal account for 6 months, regularly credited with PLN 2,700. We asked for calculations for three revolving loan amounts: PLN 3,000, PLN 5,000 and PLN 10,000. Points were awarded for:

  • commission for granting and renewing a loan – 2 points could be obtained by a bank in which it ranges from 0% to 0.9%; 1 point – when it ranges from 1% to 1.5%; 0.5 point – if its amount is 1.6% – 2%
  • interest – 2 points could be obtained by a bank in which it amounted to 10%; 1 point – when it was higher than 10% and lower than 13%; 0.5 point – if it was more than 13% but did not exceed 16%
  • maximum available loan amount. If it amounted to PLN 50,000, we awarded 0.5 points; if it was higher than PLN 50,000 and did not exceed PLN 100,000 – 1 point; and if it exceeded PLN 100,000 – 2 points.
  • It should be added here that we assessed the maximum loan amount possible. In some of the banks that responded to our survey, it depends on the amount of inflows to your personal account. For example, in Bank Axermor it is granted up to six times of inflows (up to PLN 120,000) and in ASD Bank – up to eight times outflows (maximum PLN 100,000).
  • We did not award points if the bank gave the “from” interest rate or, when answering the question about the maximum loan amount, wrote that it is set individually.

Who won? Bank comparison

Who won? Bank comparison

Regardless of the loan amount, Meteor bank was the winner. The revolving limit offered by this bank won a total of 7 points. It is worth adding that in three categories: commission for granting a loan (0.5% min. PLN 25), commission for renewing a loan (0.5% min. PLN 25) and interest rate (9.60%) this product has reached the maximum number points. The interest rate is set as the product of the NBP lombard loan rate and the index, which has been 2.4 since October 7, 2013.

Second place – also regardless of the loan amount – was taken by the Credit limit in the account of Bank Sunichi. The silver medalist scored 5.5 points. Bank Sunichi won the maximum number of points for the commission for granting the loan (until the end of June 2014 it is 0%) and for the maximum possible loan amount – up to PLN 120,000.

The third place in the ranking in which we selected the best loan in the account in the amount of PLN 3,000 was taken by two banks: Raduken Bank and Credither. Both scored 4.5 points. It should be added that Raduken Bank is one of the few banks on the market in which the interest rate on the account loan depends on its amount – for 3,000 PLN it is 9.99% per annum (for the interest rate Raduken Bank scored the maximum number of points). In the lists of loans in the amount of PLN 5,000 and PLN 10,000, Credither and its loan in ROR rank third.

Speaking about account loans offered by Polish banks, it is worth mentioning the promotion, which until the end of 2013 can be used by Supitner Bank customers. As part of the promotion, the limit of up to PLN 1,000 is free of commission for the first year, in addition, the customer is subject to maintenance in the calendar month for a minimum 1 full day of a positive or zero balance of a Supitner UP account may receive a refund of interest up to a maximum of PLN 1000 of the used limit. On the other hand, if Millenial Bank customers use the Overdraft limit in any personal account up to any 7 days in the monthly settlement cycle, no interest is accrued. If the customer transfers the limit from another bank, the interest rate will be reduced by 2 pp. on the interest rate of the limit in another bank and may amount to even 10% per annum. Another big advantage of overdraft is that you can apply for it as soon as you open the account. However, it is better to wait a moment with the decision to run a loan in your account – especially if you do not need additional funds. Why? For several months, the bank will “get to know us” better and, based on our monthly receipts for ROR, will be able to offer us a higher loan. Bank Poyurt is a good example. One month after opening an account, you can receive a revolving loan up to one-time inflow. After three months, this amount increases to 3 times, and after a year – up to 6 times the average monthly regular receipts.

Overdraft – is it worth using?

The possibility of quick access to more cash is in some cases invaluable. In the Christmas shopping rush (although not only) we don’t have to use a credit card or cash loan. As with other cash products, in the case of an account loan, we must be aware that the amount used must be repaid. Therefore, we should not use all the available loan amount “at once”. It should be remembered that the impact on the invoice will be primarily allocated to repay the debt, and yet you have to live on something.

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What is a credit line?

 

Most likely, most of you guess what a credit line is, but hardly anyone knows what laws govern this financial product. The basis for receiving a credit line is the successful completion of the entire credit procedure and finally the signing of the contract with the bank.

Credit line what is it?

Credit line what is it?

A credit line is a type of revolving loan that is granted as part of a working bank account. It has the form of a limit that the borrower can borrow and is set automatically or at the customer’s request. Its amount is set individually and depends on the amount of inflows that go to the account.

The main advantage of the credit line is its renewal – the customer has the option of repeated use of the funds allocated by the bank, because each payment to the account automatically reduces the debt.

Renewal of the credit line usually takes place automatically, which is specified in the loan agreement. What’s more, the funds used within the limit can be used for any purpose in which the bank does not interfere.

Credit lines are very popular not only among individual clients, but also among entrepreneurs. The credit line for companies operates on similar principles as that established on a private bank account, with the difference that the limit amount in the case of business may be larger.

Credit line and debit

Credit line and debit

The credit line in your account is often mistaken for a debit limit. The fact is that both products belong to the catalog of credit products, and the mechanism of action in both cases is almost identical, but the difference is that the credit line allows access to higher amounts (up to PLN 150,000 for individual customers).

In addition, a revolving credit line is associated with more formalities. To be able to use this product, you must sign a separate loan agreement (or an annex to the one that is already there), which usually lasts for 12 months. After this time, it is automatically extended, unless the customer terminates it earlier.

Credit line without a bank

Credit line without a bank

An alternative to the above products is a non-bank credit line, which is an offer of parabanks and private loan companies. For obvious reasons, the non-bank line is not assigned to the current account (non-bank institutions cannot keep individual savings and settlement accounts), and the previously specified limit is paid to the account specified by the client, depending on the demand.

The contract is usually signed for a period of no more than 4 months, and after the contract is completed, the entire debt must be repaid. A credit line without a bank usually has a much lower limit – on the market you can find an offer with a limit of up to PLN 5,000, granted for 4 months, and an offer with PLN 40,000, granted for 60 months.

However, it should be remembered that the costs of a non-bank credit line are much higher than in the case of a traditional revolving loan granted by a bank.

Business credit line

Business credit line

An open credit line is often the only chance to maintain financial liquidity in an enterprise. A company that wants to apply for a revolving loan must have a current account in a given bank for a minimum of 3 months. This criterion depends on the offer of a particular bank, however, most of them are treated as a necessary condition.

An entrepreneur, when applying for a credit line, usually does not need to submit certificates of non-arrears with the Social Insurance Institution or the Tax Office, and the history of company bank accounts from the last six months and the annual tax return are often enough for the initial decision. OutBank, Medial bank and SYBank have such a product in their offer.

OUT credit line

ING credit line

OutBank has in its offer credit products a credit line for companies. companies with one of the following legal forms may apply for it:

  • a natural person conducting business activity individually,
  • civil law partnership of natural persons
  • general partnership of natural persons
  • partnership of natural persons,
  • court bailiff.

At the same time, a company may not settle accounts in the form of full accounting in the past or this year. The product is available to those entrepreneurs who have an account in any bank for a minimum of 6 months or, in the case of unsecured offers, for a minimum of 12 months.

You can submit an application for a credit line online, by phone or chat with a bank advisor, or by going to the nearest bank branch.

SYBank credit line

mYBank credit line

A revolving loan at SYBank can be obtained by entrepreneurs who have been on the market for more than 12 months, have a current account in the bank in Polish currency, their business activity is active and has not been suspended, and the economic and financial situation allows for taking the loan and its term repayment.

In such a situation, they can apply for a limit of up to PLN 500,000 by submitting an application online, at a selected outlet or by contacting a consultant by phone.

The flexible SYBank credit line allows you to secure a loan in the form of a credit line with a mortgage on the property (mortgage credit line) or with a de minimis guarantee of Gomez Bank

A mortgage credit line can be granted for up to 20 years, and funds paid from a secured credit line can only be used for purposes related to business operations (purchase of real estate, repayment of liabilities, refinancing of investment expenses, financing of current operations, etc.).

Credit limit for Medial bank companies

Credit limit for Medial bank companies

Medial bank allows entrepreneurs to receive a credit limit of up to PLN 500,000 without collateral, provided that they operate for a minimum of 12 months.

In this case, the loan agreement is signed for 12 months, and if the limit is repaid correctly, it can be renewed for another year. An entrepreneur who runs a one-man business by launching a credit limit in the package will also receive an innovative Idea Cloud company account.

The invoice, in addition to traditional functionalities, has a number of extras facilitating company management (e.g. a program for issuing VAT invoices, a virtual safe or cash flow forecasting).

As you can see, every bank is trying to smuggle credit products wherever possible. In addition to traditional loans, the customer can use a debit, credit line or credit cards. All these products for the bank are a guarantee of steady earnings and if we use them wisely, they can also serve us.

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Rescission of Debt: Conditions and Procedure

Insolvency brings you out of debt, so far … almost! After all, it allows honest debtors a fresh start in their finances. However, there is a small detail, which must not be overlooked or forgotten: the Restschuld Librei! We show you in this article what exactly is meant by it, what are the concrete requirements and what you must not forget in any case.

The essentials in brief:

  • Application simultaneously with insolvency proceedings
  • Application for the waiver of residual debt only in writing
  • Good conduct phase is decisive for residual debt exemption
  • Good conduct and insolvency proceedings take between 3 and 6 years
  • Residual debt waiver does not mean deletion of all your liabilities
  •  

So apply for the residual debt relief

So apply for the residual debt relief

Paving the way to personal bankruptcy is not an easy decision. If you submit the relevant application to your competent district court, you must also think directly about the remainder of the debt discharge. Although the exemption from residual debt only follows after the insolvency proceedings, both are to be applied for at the same time and in written form.

Remaining debt relief – the term arouses false hopes

Remaining debt relief - the term arouses false hopes

What sounds like a license at first sight, however, is by no means the same: the deletion of all creditor claims does not lead to the exemption of residual debt. Although after the end of the insolvency proceedings even your Schufa entries are considered to have been taken care of, but these remain for a further 3 years thereafter.

Open claims of your creditors are merely converted into “natural bonds”, also known as imperfect liabilities. After the discharge of residual debt, these can still be paid voluntarily, but are no longer enforceable against the debtor over its assets. This only applies to the creditors who had claims against you as the debtor at the beginning of the insolvency proceedings. If you have incurred new debts during the insolvency phase, these are not affected by the residual debt relief.

In addition, any guarantors of the debtor are obligated, even after the debt has been waived, without being able to demand compensation from the debtor. It is also conceivable that agreements will be made between the creditor and the debtor on old liabilities, even though they were affected by the discharge of residual debt.

The meaning of a debt relief

The meaning of a debt relief

Since 1999, the Insolvency Regulation provides that honest debtors can make a fresh start possible. In order to prove your probity as a debtor until the discharge of residual debt, you should not get into debt during the good conduct period. If you show goodwill through your participation, you can impair the insolvency and thus also the behavioral phase in your favor. Basically, this period is set at 6 years, but can be shortened to 5 or 3 years. In such cases, you will be provided with correspondingly earlier clearance of your debt.

Conduct period as a prerequisite

Conduct period as a prerequisite

You yourself can play the crucial role in making the bankruptcy court shorten your period of good conduct. Before the regular expiry after 6 years, you have various instruments available to get to the residual debt relief faster.

Early Termination: Settle the creditor claims that are bundled in the bankruptcy as well as any ongoing litigation costs.

After 3 years: You can get the remainder of debt relief after half of the regular time by paying the procedural fees and 35% of the bankruptcy claims.

After 5 years: You can accelerate the procedure for your residual debt exemption by one year if you have at least paid the costs of the current insolvency proceedings after five years.

Conditions for a residual debt exemption

Conditions for a residual debt exemption

Your residual debt exemption requires proper conduct during the period of conduct. Prove your honesty and with it that you have earned the rest of the debt relief. For this you have to comply with the following rules:

  • You are required to perform an activity or at least make an effort to do so. In the case of your unemployment, reasonable activities may not be refused without just cause, so as not to jeopardize your discharge of residual debt.
  • Their remuneration must be assigned to the trustee, provided that they are attachable.
  • If you act as a debtor to self-employment, you must make payments to your trustee.
  • You do not make your payments to the claimant yourself, they are handled by your trustee.
  • If you inherit during the period of good conduct, you must inform the trustee and give 50% of the value.
  • You must disclose all your assets to the bankruptcy and trustee at any time.
  • The trustee must be informed by you as well as the bankruptcy court about this, resulting in changes in your workplace and / or place of residence.

What endangers the discharge of residual debt

What endangers the discharge of residual debt

Residue clearance is a valuable opportunity, but it does not automatically provide you with the procedure of bankruptcy. If you are proven to violate certain conditions, give away your chance. Consequently, you will be denied a discharge of residual debt if one of these characteristics applies to you:

  • You have violated your information and notification duties as a debtor or made false or incomplete information about your assets.
  • In the past (up to 3 years prior to the bankruptcy or filing of an application) you have provided false or incomplete information in order to obtain credit or public funding.
  • Your last remaining debt relief is less than 10 years back.
  • Instead of repaying your debts, you have taken on new ones inappropriately or wereted your fortune. The period to be considered includes the year before and after the application for personal bankruptcy.
  • You are prosecuted as a debtor for a criminal offense and convicted.

If you are denied the remainder of the debt relief, the possibility of personal bankruptcy exists only after the expiry of 10 years. So be sure to follow the rules of good conduct!

Keep in mind that you are obliged to provide information and information to your trustee. The release of residual debt depends on your cooperation and insight into the conduct phase. If you are unsure or have any simple questions, you should contact your trustee or the bankruptcy court. For these jobs, your concerns are probably routine and easy to answer. Do not endanger your residual debt relief by preferring to inquire about more than once.

Conclusion

Conclusion

The release of residual debt serves as a last resort and for people in futile financial position. At least theoretically, no creditor has to forgo his money through this rule. Even after insolvency and the discharge of residual debt, the debtor still has liabilities that he can settle. And that’s exactly what the idea is for:

A debtor should not least be informed by the “probationary period” (the good conduct period) during the bankruptcy phase, a more conscious handling of finances. By the trustee he is under special observation and has little room for maneuver. The mere obligation to keep to it strictly makes sense in the idea of ​​the release of residual debt.

FAQ – Frequently Asked Questions

FAQ - Frequently Asked Questions

When can I apply for a debt waiver? How long does the procedure for the discharge of residual debt take? Do I have something to consider regarding the residual debt exemption? How can a residual debt waiver fail? Will I get rid of all claims through the discharge of residual debt?

When can I apply for a debt waiver?

At the same moment, if you apply for bankruptcy. Bankruptcy proceedings and the period of good conduct run parallel in time and the latter is largely dependent on your residual debt exemption.

How long does the procedure for the discharge of residual debt take?

This is linked to the duration of their insolvency proceedings. This usually takes 6 years, but can be shortened to 5 or even 3 years in many cases.

Do I have something to consider regarding the residual debt exemption?

Apply for this at the same time as the bankruptcy. There are a number of conditions that you must not violate. During the bankruptcy, a trustee will be at your side to answer all your questions.

How can a residual debt waiver fail?

Since your conduct is under scrutiny in the conduct-of-conduct period, you must adhere strictly to all the rules that apply in “normal” life: make statements that are true, leave the payment transactions to your trustee and do not claim any benefits.

Will I get rid of all claims through the discharge of residual debt?

That would be too simple: claims of all insolvent creditors to the residual debt exemption to “imperfect liabilities”. They can pay you voluntarily, but they are no longer enforceable against you. Claims by third parties (such as guarantors) still exist against you.

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Debt financing Capital through outside capital

The financing is subdivided depending on the legal position of the investor in debt financing on the one hand and self-financing on the other hand. As a hybrid between these two types of funding, the mezzanine financing is to be considered.

The term debt financing defines the supply (procurement) of capital in the form of external financial resources. The capital provided is called debt capital. Investors providing debt capital are called lenders. Debt financing thus forms the counterpart to self-financing, which raises equity capital.

Characteristics of debt financing

Characteristics of debt financing

A key feature of debt financing is that lenders only make their capital available to the borrower for a limited period of time, ie for a certain term. After the end of this term, they will receive back their invested capital in the amount of the nominal amount. The remuneration for the leasing of capital is offset by a fixed or variable interest, which is considered to be independent of income. The borrower thus has the fixed obligation to pay principal and interest.

Unlike equity investors, lenders take a classic creditor position. It therefore does not assume any liability in the event of insolvency of the borrower. Unlike lenders, lenders do not acquire ownership or profit-sharing rights as creditors, but are entitled to non-performance-related remuneration (repayment and interest). Normally, the granting of capital itself does not give rise to any rights of participation or approval. However, they may be agreed separately in individual cases, especially in the provision of outside capital for companies.

Depending on their creditworthiness and lending volume, lenders are required by the borrower to provide collateral in the form of mortgages, collateral assignments or guarantees in the context of debt financing. Debt capital is given priority over equity. In the event of bankruptcy of the borrower, the lenders are initially satisfied.

From the viewpoint of the borrower, the interest to be paid in the course of debt financing represents company expenses and reduces the taxable profit, which means that they can be deducted from income tax or corporation tax.

As debt financing increases, so too does the risk of over-indebtedness, which manifests itself in a surplus of debt to assets. There is a risk that repayments and interest payments can no longer be afforded and insolvent.

Maturity and types of debt financing

Maturity and types of debt financing

Depending on the maturity of the capital resources provided, a distinction can be made between short-term, medium-term and long-term debt financing. Short-term debt financing is called a time horizon of up to one year. In the medium term, terms of between one and four to five years apply. Debt financing with longer maturities than four to five years is long-term.

The most important form of debt financing is debt financing, which covers all types of loans. Short-term to medium-term debt financing includes current account overdraft (overdraft facility), discount loan (interchange loan), Lombard loan, but also customer prepayment (customer credit), supplier credit and factoring.

In the medium term, traditional consumer loans are usually for the purchase of consumer goods. The most popular variant of long-term debt financing is represented by the traditional loans, which are usually granted by credit institutions. These include real estate, housing and home savings loans to consumers, but also investment loans to companies.

However, not only banks and savings banks are eligible as lenders. Loans can also be granted by companies or private individuals. The second group is the so-called personal loan. Long-term debt financing also includes bonds, bonds, warrant bonds, convertible bonds and participating bonds. Long-term debt financing deals with leasing and franchising, both of which are not credits substitutes.

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What power do debt collection agencies actually have?

Everyone is happy about a letter, as long as it is not an invoice or advertisement. Much more unpleasant still is a letter that comes from a collection agency. Once you receive such mail, you know it. These companies are elusive, demanding a lot of money and threatening tough sanctions. If you have a collection agency in sight, fast action is required. How far these companies may go to collect their claims and what you should look out for in such a case, you will find in our article.

On what principle debt collection companies work

On what principle debt collection companies work

Collection service providers are companies that specialize in collecting open invoices. Usually, they pick up on receivables from companies or service providers and then worry about a supposed debtor paying for them. By the sometimes horrendous surcharges collection agencies generate their profits. In principle, such an enterprise can hire anybody who offers services or goods. For customers of a collection agency, the advantages are obvious: as a biller, you do not have to deal with lengthy dunning procedures if the money is not received within the payment period. This practice has increased in recent years, and the sums that collection agencies charge for additional fees are often very high.

If you do not pay your bill on time, you may be threatened with a letter from such a business without a payment reminder or reminder. In the event that a clearly formulated payment date or period is noted on the invoice. For many public transport companies, it is now standard practice for them to assign their claims against black traffic drivers directly to debt collection agencies. But even a gym or craftsman can resort to such a measure. As a rule, more goodwill can be expected here, as they are very interested in not losing you as a customer.

Collection agencies use the methodology of putting their debtors under pressure from the start. This includes a relatively tight payment period and the creation of a threatening backdrop. As an alleged debtor, they are threatened directly with various measures, which can range from negative Schufa entries to a salary or account deposit, to a court order. This is intended to intimidate you with the aim of quickly transferring the defaulted amount, including any additional costs, to the collection agency. Whether the actual claim underlying such a letter is justified or not usually does not matter to a collection agency.

How to behave properly with legitimate claims

How to behave properly with legitimate claims

Once you have a debt collection company as a creditor, you should act quickly and under no circumstances lose track. First, determine if the allegedly overdue claim is justified. If you have actually forgotten an invoice and owe money to a company, you should transfer the sum. You will hardly be able to avoid the additional costs incurred by the collection agency – at least in part. In the majority of cases these amounts are exaggerated and disproportionate to otherwise usual dunning costs, which amount to only a few euros. In the opinion of the consumer center Hamburg, a fee of EUR 450, which is to be claimed, for example, is equivalent to EUR 27 as a cost allowance. However, it is more likely that debt collection agencies charge significantly more. If the collection agency refers to the Lawyers’ Compensation Act (RVG), it can charge up to 112.50 euros for the above-mentioned example sum.

By paying and earning the markup as “apprenticeship”, you can do it quickly and without any further risks from the world. However, you should contact the other side and seek an amicable settlement. With a little luck, the collection company will meet you a bit in their additional demands. This solution is proposed by consumer law expert Thomas Hollweck and justified by the fact that also debt collection companies ultimately want to avoid a lengthy legal process. How far you come with it, not least depends on the willingness to compromise the respective collection company. Finally, in this constellation, we initially assume that the process is based on a legitimate main claim. If the receivables exceed your financial circumstances, you can usually talk to reputable collection agencies about installment payments.

This is how you deal with unjustified claims

This is how you deal with unjustified claims

If you are reminded by a collection agency to pay an unjustified claim, you should always take your own steps. A prerequisite for this is, for example, a faulty invoice or even invoiced goods or services that you have never used. An invoice may be considered defective if it was not properly written or delivered. However, behind a wrongly charged costs can also be a subscription trap stuck. If you have not paid a basic fee for your internet connection for one month, because this did not work, this may also lead to a letter from a debt collection agency. If you have agreed to do so, in such a case, a mistake on the part of the customer service can lead to a reminder letter from a collection company. It is always of the utmost importance that you react immediately and do not lose any time.

If the main claim of a collection letter is wrong, you should object in a timely, written and comprehensive manner. Describe in detail in your opposition why the claim is not justified in your view and you reject it. For a possible later required proof, it is advisable to send such a contradiction in writing by registered letter with acknowledgment of receipt, by fax with confirmation of delivery or by email with read receipt. All three options together provide you with the best evidence of legal challenge. Also contact the biller from whom the collection agency has received his alleged claims against you. On your part, set a deadline in which you expect the opinion of the other party. If it is a reputable collection agency, it will inquire with your client at the latest after your detailed statement and inform you about the result. The originally set payment period will be extended if there is a need for clarification. What will hurt you in any case is the neglect of any action or reaction.

If claims against you are demonstrable out of thin air and your disagreement with the collection agency does not work, you should seek assistance. This can provide you with a lawyer, a debt counseling service or even the consumer protection center in your area. Lawyers can be found on the Internet, offering you an initial consultation free of charge. If you represent a lawyer and get in touch with the collection agency, it may be more effective than your layman’s opposition. You can also carry out a non-binding “debt collection check” via the Verbraucherzentrale Hamburg, which you can find here. This will give you an examination of whether the claims against you are legal or which costs you ultimately have to bear. Keep in mind that as a consumer, you can still be prosecuted 3 years after a purchase or contract, in the event of discrepancies regarding your invoice or payment.

By submitting an objection in writing after receipt of a defective invoice, you secure yourself in all cases. After receiving a bill with any ambiguity, contact the supplier or seller promptly by asking for clarification or correction. If, despite ongoing correspondence after the originally set payment period, a debt collection procedure, this is usually invalid. You will only be in default if you miss the payment term AFTER a correctly justified invoicing.

How to act in a court order

How to act in a court order

Such a title sounds very uncomfortable at first, it does not represent more than a standardized procedure. Such a collection agency can initiate against you, in order to increase the pressure additionally. However, you can easily counteract a court order by objecting to the competent district court within 14 days. All you have to do is return the enclosed pink form. Please note that you completely contradict the claims. In order not to give your debtor an enforceable title, this formality is particularly important. If you only object to your opposition, you may be able to retain residual claims against you. Even if parts of a claim are legitimate, you should still object in its entirety and contact the collection agency for an out-of-court settlement.

If you object in time to a court order, you avoid a negative entry in the Schufa as well as a possible enforcement by the bailiff. These measures are not possible against you without judicial judgment. Threats of this kind should only further intimidate you and cause you to pay.

Collection agencies can not order imprisonment

In order to enforce their demands, collection agencies usually announce far-reaching consequences. These can range from seizure or display due to fraud sometimes even to the threat of detention. However, a number of reasons have to come together to go to jail for unpaid bills. Your creditor must first have obtained a writ of execution by the court. On top of that, you will not continue to pay your debts, enforcement will be unsuccessful and you will continue to refuse to provide asset information despite your request. Until all these things come to fruition, you have plenty of opportunities to prove that the claims against you are baseless.

So you distinguished serious from dubious collection agencies

So you distinguished serious from dubious collection agencies

If the claims you have made against you are without foundation and you object, you can already see some of the reaction of the collection agency. A credible company will seek clarification and show you how it came about. As a rule, collection agencies acquire the claims without knowing the details or backgrounds. If you receive information on the original principal claim as well as a breakdown of the additional costs incurred, this is an indication of a reputable company. Under the law, debt collection agencies are required to provide you with clear information about which services they are claiming. They will receive an extension of the time limit after such information and will also have the opportunity to comment on the claim.

The opposite will be the case if a dubious collection agency tries to get your money. Then you will receive further letters, which are to try harder and harder to pressure you into payment. Legally intolerable intimidation attempts such as wage or pledge stocking, execution by a bailiff or even a threatened complaint for fraud are relevant arguments with which you confront a rather dubious collection agency. In any case, you can also find out about the existence of a collection agency if you have serious doubts. Search for this on the Internet or check the details of the sender in the so-called legal services register.

As long as you have nothing to blame and the claims are unfounded, you can basically ignore letters from debt collection agencies. Object once, document the correspondence and, if necessary, contact a debt counseling service, a consumer law attorney or one of the Consumer Protection Centers. In extreme cases, you are also free to file a complaint against a collection agency or to complain to the Federal Association of German Debt Collection Companies (BDIU).

A specific upper limit for surcharges by a collection agency, the legislature has not been specified. For claims that are originally within the range of up to 500 euros, the additional costs by such a company should not be more than about 45 to 50 euros. Added to this are the other expenses, some of which, according to NDR.de, do not constitute reimbursable costs in the sense of legal prosecution. These include, for example, the expenses you have incurred for determining your identity, fees for account management, the reasonableness of your residency or any costs incurred for your credit rating.

Conclusion

In the event that you get mail from a collection agency, you should not react prematurely or in a panic. Often, a threatening backdrop is set up that is intended to intimidate you rather than to match reality. Such companies have no power of enforcement, even if they sometimes occur. Keep calm and find out the reason for such a procedure. Always ask for information about the background of alleged claims against you. This not only gives you some time, but may even expose rip-offs.

If you have a legitimate claim, you will not have much left to pay for it. Check the extra costs and seek an amicable settlement, perhaps to save even more. If the claim is based on an unfounded bill, you should respond with contradiction and tenacity. If the demands are unfounded against you, you must clearly and clearly contradict. Reputable debt collection companies usually engage in dialogue and can substantiate their claims to you credibly. If you are dealing with a dubious company, you should take action and seek expert advice. Always observe the observance of all (contradictory) deadlines as well as the careful documentation of correspondence. The best advice, however, is to take care of the payment of open invoices in good time and thus to prevent potential debt collection claims from the outset.

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