Receive mail from the collection agency – What debtors should know

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“Woe, you don’t pay!” Yes and? Collection agencies like to appear authoritarian. They speculate with the debtor’s fear that he would be impressed and still pay voluntarily. Anyone who receives mail from the collection agency should be able to classify it.

Who can conduct debt collection?

Who can conduct debt collection?

Only those who are registered with the competent authority (usually the regional courts are responsible, § 2 Legal Services Act) are allowed to offer and operate collection services. Only those who demonstrate suitability and reliability (no criminal records, orderly financial circumstances), who have passed a specialist examination and who have professional liability insurance, are registered. If the post originates from a foreign address, it can be assumed that these requirements are missing.

If you have any doubts, you can check the registration on the notice platform for out-of-court legal services or request proof of your registration from the collection agency.

Why is a debt collection agency commissioned?

Why is a debt collection agency commissioned?

If the debtor does not pay the debtor’s debt despite a reminder from the creditor, the creditor can apply to the court for a payment order or file a payment claim, or commission a debt collection agency or a lawyer to discharge the debtor. For cost reasons, the creditor will usually use the help of a collection agency for a claim that is undisputed on the part of the debtor or is titled by an enforcement order, court decision or notarial deed.
Collection agencies see their job as mediating between creditors and debtors. The debtor often lacks the courage to speak directly to the creditor. It can be helpful for both sides to reach a settlement through the collection agency.

How do collection agencies work?

How do collection agencies work?

The debt collection agency checks the creditworthiness of the debtor in advance by inspecting Credit Bureau and the debtor registers of the local courts, determines the current address by inquiring at the residents’ registration office and inspects commercial and commercial companies with registered traders and corporations. Especially when it comes to post-judicial processing of titled claims, debt collection agencies have extensive experience in the area of ‚Äč‚Äčenforcement. Organizationally, they are better equipped than lawyers to continuously examine the debtor’s income and financial situation until the expiry of the claim after 30 years, as well as all possibilities of enforcement.

When does the debtor default?

When does the debtor default?

The debtor has to bear the costs of using a collection agency as default damage. Delay is deemed to exist if the creditor specifies a payment deadline or has indicated to the debtor in the invoice that the claim is due after 30 days at the latest (§ 286 BGB). The creditor then no longer needs to warn the debtor.

Can the creditor always use a collection agency?

Can the creditor always use a collection agency?

The creditor must avoid unnecessary costs and, in view of his duty to mitigate damages, must not commission a collection agency if the debtor has raised objections to the claim and it is not expected that he will pay the claim without using the court. In principle, collection costs are only reimbursable up to the amount of legal fees. If the debtor denies the claim, the creditor must already use a lawyer for the out-of-court reminder. This is to be understood in the context that debt collection agencies are not authorized to represent the creditor in legal disputes, except for the application for a warning and enforcement order.

What are the costs of the debtor?

What are the costs of the debtor?

The cost estimate should be limited to the calculation of a 0.65 fee according to the fee table for lawyers. For items up to 500 USD, this results in 45 USD, plus a flat rate for post and telecommunications of 20 percent of the net fee, up to 20 USD.

The frequently used calculation of administration fees, bank fees or personnel costs is not justified. Added to this are the creditor’s default interest. Costs for obtaining information from the Residents’ Registration Office are only justified if there are doubts about the debtor’s whereabouts.

How to react when mail comes from the collection agency?

How to react when mail comes from the collection agency?

Collection mail is to be taken seriously. The justification of the claim (limitation?) And its amount must be checked in advance. The debtor should contact the debt collection agency. In view of possibly difficult economic conditions, he can try to agree a payment arrangement. If he does not respond, he runs the risk of the collection agency applying for a payment order, which is associated with additional costs and ultimately enables enforcement. If the creditor had concluded a Credit Bureau agreement with the debtor, the entry of the measure into Credit Bureau is also possible. If the debtor agrees to make a partial payment, he must know that he is acknowledging the claim and interrupting the limitation period. In case of doubt, the debtor should use legal aid and, if necessary, take advantage of state advice or legal aid.

 


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