The financial institutions have different steps once you get in delay but very often they are open to negotiating and finding a solution.
First Step: Soft recovery phase between 30 and 90 days delay:
30 days: They call you
60 days: Second call/Warning that the credit might be preliminary due
90 days: Letter to you for voluntary payment/announcement that the credit is preliminary due and the payment plan/ payment in installment is not valid
Mediation in this phase – writing letters to the creditor, asking for signing appendix to the loan agreement with the options as follows: to refinance all the obligations of the debtor; to renegotiate the present loan – longer term, lower installments; to ask for a loan without an insurance premium.
Second step: Hard recovery after 90 days delay:
The procedure may start in case the creditor is a bank with an application for immediate execution order:
You have two scenarios in this case:
1.The debtor might write an objection. Then the creditor should initiate a general process and prove that they are entitled to collect its receivables without being treated as a privileged party having right of shorter procedure. In case there is a court decision in favor of the creditor it is possible to apply for writ of execution.
2. The creditor receives an order and in a period of one month – there is no objection from the debtor.
Mediation in this phase is also feasible, in case there is a possibility that the creditor has default terms in the GTCs or there is a case of refinanced loan with capitalization of the interest.
Often financial institutions are open to finding solutions and renegotiating
What is mandatory debt collection ?
The creditor can take steps to execute the debt. This procedure takes place in two phases: Legal and Execution
Phase 1: Legal procedure
What is it?
The creditor initiates legal proceedings in order to obtain from the court a letter of execution issued against you. It is only on the basis of a letter of execution that the creditor can take measures to assert his request by using the services of a bailiff. Most often, the creditor benefits from an abbreviated judicial procedure (injunction procedure), which takes place without the participation of the debtor and in which, depending on the type of loan and the documents available, a court enforcement order can be issued against the debtor and enforcement order.
What can you do?
In this procedure, you can, within two weeks from the time you have been informed of the measures taken against you, file an objection in a form with the competent court that ordered the payment of which you do not owe the amount . You do not need to prove in this objection that you do not owe payment. It is important to know that, except in cases where the creditor initiates an injunction procedure for the recovery of the debt on the basis of a promissory note or a similar document, the objection filed does not suspend the execution of the order made by the court.
In order to meet the deadline for filing an objection, you must pay particular attention to any written correspondence with you regarding compliance with your obligation under the loan. After filing such an objection within the time limit, the creditor may initiate legal proceedings for the same claim, in which he must already prove his claim with the participation of the debtor. In this procedure, you have the possibility of contesting the claim of the creditor, respectively of filing counterclaims against him, if necessary. In the event that, after a claim on your part, the creditor does not file an action for his claim or a legal action, but does not prove his claim against you, the effect of the payment documents already issued in his favor goes out retroactively.
In the event that you file an objection and the creditor files a lawsuit that you win, you may have to pay the additional legal costs incurred by the creditor to initiate the proceedings. In this regard, it is not advisable to object without obvious reason, but it is advisable to seek the assistance of a lawyer.
Phase 2: Execution cases
What is it?
On the basis of the letter of execution at his disposal, the creditor can file an execution file with a bailiff for compulsory recovery of the loan.
When bringing an enforcement action, the bailiff investigates your property, which may include references to:
- Registered real estate (residential buildings, apartments, land, etc.)
- Registered movable property (motor vehicles, etc.)
- Recorded salary you receive (wages, pensions, social payments, etc.)
- Your participation in commercial companies
- Bank accounts, etc.
Within the framework of the real estate investigation, the judicial officer necessarily needs information on the current amount of your obligations towards the State and the municipalities (taxes, fines and others, collectively called “public bonds”). The judicial officer is required to collect these obligations as well as the obligations for which the case was initiated.
What can you do ?
If you have unpaid public debts, the bailiff collects them before starting to collect the loan obligations for which the execution procedure has been initiated. In this case, the execution procedure will not end before the bailiff collects both the loan obligations and your public obligations. To ensure compliance with your obligations, the bailiff may impose protective measures (foreclosures and foreclosures) on your property, bank deposits, wages, etc.
The real estate investigation and the imposition of protective measures are carried out by the bailiff before you are informed of the execution procedure initiated against you. At the end of the real estate investigation, the bailiff sends you an invitation to voluntary payment, informing you of the exact amount of your debt (including the amount of your unpaid public debts), giving you a deadline for payment.
If you pay your debt on time, the matter is closed. If you do not pay your obligations voluntarily within the time limit, the bailiff may take steps to sell your movable and immovable property in order to repay the loan obligations. At the same time, the bailiff can deduct from you fees in cash or other payments, as well as amounts you have in bank accounts.
A certain part of your property cannot be used by the bailiff to recover the obligations for which the execution procedure was initiated. You can request the suspension of the execution of your property when entering into a deferred debt payment agreement. In the event that the bailiff does not act on the matter within two years, the enforcement procedure should be terminated.