Unpaid bills and subsequent collection claims are not pleasant – neither to the debtor nor to the debtor. Here you can read some advice on how to act if you have received one collection claim.
Debt collection is both un nice and expensive. If you have a debt collection claim, you must pay the debt collection fee in addition to the original claim. A debt collection fee is a type of compensation you must pay to cover the costs the creditor or collection agency has incurred at the time of recovery. Of course, the best thing you can do once you receive a debt collection is to pay as quickly as possible.
Words and expressions related to debt collection
If you are unable to pay, it is always advisable to contact the debt collection agency. In many cases, repayment agreements can be made that will prevent the collection agency from proceeding with, for example, legal steps on your claim. It is always seen as positive that you make contact and show that you want to make up for yourself.
If you have received a debt collection claim, you will most likely come across words and phrases you have not heard before. Below is a list of words and phrases that may be helpful to know:
When a claim has been received for collection and the payment deadline has expired at least 14 days, you will be sent a written payment request to either pay or object to the claim within a period of at least 14 days. If you have not submitted your objections to the claim at an earlier date, this deadline will be initiated before legal recovery of the claim.
If you have failed to pay the claim within the time limit of at least 14 days set in the payment request and your claim is not disputed, legal recovery will be initiated. The debt collection agency or creditor must initiate a legal action within six months of sending the payment request, otherwise a new payment request must be sent to you.
If you do not pay your debt, one of the biggest consequences of this will be that you receive payment notes. The payment notes are registered with credit reporting agencies, and for example, banks do not in most cases want to lend you if you have payment notes.
A payment note should be deleted immediately after you settle for it. As a rule, a note should be deleted after four years.
Good debt collection
The creditor or collection agency must act in accordance with good collection practice. That is, they must not use methods that expose you to unreasonable pressure, harm or inconvenience.
Avoid debt collection
Of course, the best thing is to avoid debt collection in its entirety. If you have many expensive small loans and credit cards, you may want to apply for a refinance. With a refinance, you can pool all your small loans and credit cards into one, larger, loan. This way you can achieve a lower monthly amount, lower interest rates and you only get a loan to deal with – which makes the situation much clearer.
Planning is the key
If you have a strained economy, plan ahead. Get an overview of what bills are coming when, and create an overview of other expenses. Then set up a budget that you can live with, where you prioritize the important things like loans, electricity etc. Read this blog post and get 8 savings tips for a more transparent personal finance.
Remember that it is important to pay your bills on time, when a claim for debt collection becomes immediately much more expensive. If you do not have the opportunity to pay – contact as early as possible and have a dialogue with the creditor / debt collection agency. It always helps to be open about the situation and set a repayment plan.