On the Internet, most of the forums contain many questions about what is worse bailiff or debt collector? In this article, I will try to answer this question asked most often by indebted persons facing the execution. The debt collector is only an introduction to what the debtor is waiting for in the future. The bailiff is the crowning achievement of execution and the last link in the chain of misfortunes of the indebted person.
Do not bury your head in the sand!
The beginnings of the execution look in the way that in the case of arrears in the repayment of a loan in the bank or a delay in a parabank, the debits calling for a voluntary repayment of debts are sent to the debtor. Of course, they are not sent for free. The debtor will be charged for them according to the tariff of fees and commissions of the institution, and these costs will increase the balance of the debt. Already at this stage, it is worth establishing a contact, making a settlement and trying to establish a convenient plan to pay arrears plus current installments. It is best to negotiate that the arrears will be added to subsequent installments. Then you will feel the least repayment of arrears.
The monitoring is carried out by:
- sms (cheapest – cost up to several euro),
- written prompts (from a dozen to several dozen euro),
- telephone (up to fifteen euro),
- bank employee who visits the place of residence (cost from several dozen to even over 100 euro).
Obviously, these are estimated costs and may vary depending on the bank or loan company.
Remember one! Namely, the fact that hiding the head in the sand results in the fact that the rear part of the body called the less noble crowning of the back will be on top and will be exposed to kicks that will surely fall on it!
The debt collector is just the beginning
Failure to respond to prompts and calls for debt settlement results in the creditor (bank or loan company) initiating a debt collection procedure. Execution of arrears are dealt with in the so-called banks debt collection departments or external companies acting on behalf of the bank.
If the debtor goes to the debt collector, it will be, in a sense, his luck , because it is cheaper than the debt collector from an external company. You will have to pay from a few dozen to even over 100 euro for the activities of the bank vettor.
The situation is worse when the external company deals with the collection on behalf of the bank . This is the most expensive way of the initial execution. In this case, the company may charge a percentage of the cost of debt collection . This cost can range from 2 to 30% of the amount of arrears and its final amount depends on the complexity of the case, the number of visits, etc., in other words, the degree of “resilience” of the debtor.
Many people avoid the debt collector altogether unnecessarily, thus acting unknowingly to their detriment. The costs of debt collection carried out by the bank or company will be added to the existing debt, increasing it. Therefore, do not avoid the debt collector, make a settlement. It will be a much cheaper solution than further avoiding the repayment of the outstanding liability.
Further legal action = additional unnecessary increase in costs and amount of debt
If at any of the above stages the debtor does not reach a settlement and does not start repaying the debt, the matter will be referred to court proceedings. This is the penultimate stage of activities aimed at recovering receivables by a bank or a non-bank company.
The bank issues a bank enforcement order, which it passes to the court to give it an enforcement clause. The court, within three working days, will issue a clause at a closed meeting, without the presence of the debtor. Even if the debtor appeals against this decision, it will be months for the court to review the appeal. At that time, the bailiff has a free hand and will certainly actively lead the execution.
In practice, it can be assumed that appealing from court decisions in such matters has the same effectiveness as demolition of a wall by throwing peas for it.
Costs related to granting the enforcement clause to the bank enforcement title:
- the cost of legal representation in the amount of 40 to 60 euro,
- court costs pursuant to art. 71 of the Act of 28 July 2005 for granting an enforcement clause amounting to € 50.
Bailiff enforcement = further increase in costs! For the debtor, it is already inclined down
At a later stage, the bank enforcement order issued by the court with the enforcement clause goes to the bailiff’s office. Unfortunately, the bailiff does not carry out his activities for free, which has already been convinced by many people. The bailiff gets the whole debt, i.e. the initial indebtedness increased by all the costs added somehow along the way.
The cost of bailiffs’ execution is terrible and in the case of further non-repayment of debt causes the avalanche to build up.
Bailiff costs include enforcement fees and the reimbursement of cash expenses defined as enforcement costs set out in the Law on Bailiffs and Enforcement.
They are presented as follows:
- Enforcement fees: the bailiff collects from the debtor a fee of 15% of the value of the enforced payment, however, not less than 1/10 and not more than thirty times the average monthly salary. In the case of enforcing the amount due by the enforcement of the bank account, remuneration for work, the bailiff collects from the debtor a fee of 8% of the value of the enforced payment, however, not less than 1/20 and no more than ten times the average monthly remuneration.
- Expenses during the execution: pursuant to Art. 39. 1. Bailiffs are entitled to reimbursement of cash expenditures incurred in the course of the execution, including, among others: experts’ fees, costs of travel outside the town, which is the bailiff’s office, storing and insuring seized movable property.
Let’s summarize how much you can lose when getting to the bailiff’s execution
I will use a simple example – let us assume that the outstanding loan amount with interest is € 10,000. Let’s calculate what costs will be added before the case goes to the bailiff. We will also check how much the cost of bailiffs’ execution will increase the entire debt. We will count it in the most negative variant, i.e. the most expensive one for the debtor.
Hiding the head in the sand can cost more than 50% of the debt value! Is it worth losing so much?
The answer to the question, what is worse, the bailiff or the debt collector can only be one
The bailiff is, definitely inferior and more expensive than the debt collector. For this reason, every debtor should try to avoid contact with him at all costs. Avoid not in the strict sense of avoidance but not let things get so far away that the bailiffs initiate the execution. Such execution for many people may turn out to be the proverbial nail for the financial coffin.