Unpaid loan – what’s next?

Financial problems and loan defaults are a very common situation for many millions of Poles. In this situation, specific steps may be taken against us to recover the money due.

Non-payment of the loan will result in further steps taken by the creditor to recover the money. At every stage, however, we can act and get out of the situation unscathed. Below we present the consequences and the next stages when we default on loans, and what we can do at each stage of the debt to solve the whole situation.

Debt collection – termination of the contract

Debt collection - termination of the contract

The first stage, if we do not repay the loan and the contract is terminated, is debt collection by the company in which we have debt. When we did not pay back by several months loan, the contract may be terminated. If this happened, we must repay the entire debt plus interest – immediately. The loan company or bank can send debt collectors to us, prompt you to pay or call us.

Tip: If the debt has not yet been sold, we can ask you to write off part of it, divide it into installments or start paying it back. If the company records payments, it will probably not sell the debt, and we will be able to regularly pay certain amounts and reduce debt.

Debt sale

When the actions of the company we were guilty of did not bring the desired result and we did not start paying off the debt, it may sell our debt to the debt purchase company. There are many of them on the market and they earn on buying debts in bulk from companies and banks, e.g. at 30% of the price and recovering debts from debtors.

Paradoxically, it may be helpful to sell the debt. Such companies will make numerous attempts to recover money, e.g. by phone, sending debt collectors personally or sending reminders. In this way, we can gain time and start paying off the debt.

Tip: Negotiate with the company that bought the debt. We can ask for payment in installments, redemption of part of it or repayment of small amounts. This is the last moment to stop the application to the court for legal recognition of the debt. Such companies are willing to cooperate because they have invested their money to buy our debt.

Bailiff and bailiff execution

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When a company with our debt goes to court and receives a court order for payment when it has not recovered its debt, it can refer the case to a bailiff. The bailiff will be able to forcefully collect the amount we owe to a given company. In addition, he also adds his costs by increasing the debt. The bailiff can take up a part of our earnings, an amount above approx. USD 1680 from a bank account – the above amount free from attachment or seize our property and sell it – from real estate to cars and valuable equipment.

Tip: At this stage, you can also get out of trouble with a defensive hand. It’s a bit harder, but it’s definitely worth cooperating with a bailiff. If the creditor agrees, he can, for example, set a repayment schedule for us in exchange for withholding enforcement or we can agree with him a plan to resolve the whole situation.