It is difficult not to pay attention to widely advertised loan institutions. In the offers, a weekday appears as an extremely attractive offer for those in dire need of cash. Few formalities, unbalanced requirements and a quick award process attracts many. Particular attention should be paid, however, to obligations such as timely repayment – otherwise we can make huge problems. What threatens us if we have to say – I do not pay back?
The industry of payday loans and loans is the part of the market that should never let our vigilance fall asleep with its beneficial and helpful goal. The fact that money via payday loans is easy to obtain, and the amount of requirements and formalities in the background of classic banks is not large does not mean that we can sleep peacefully throughout the loan period. It is worth approaching this with a distance and systematization, because the lack of discipline can have deplorable effects for us.
Each loan is taken for a specific period. Depending on the specifics of the offer, it may be a month, a few months, a year or even a few years, of which the biggest challenge is of course a one-off payment in just one month. By borrowing, we are committed to a specific repayment frequency of the loan installments or a one-off repayment of the entire amount. Punctuality is a key requirement here, because it is important not only for the parabank, but also for institutions that create financial records. Even a one-day delay causes that we get under the microscope of the loan institution. In turn, non-payment of the loan after the final date of the last installment brings many problems to our head. Let’s get to know all the consequences that threaten if we do not pay off payday loans.
I do not pay back my payday – what next? The first debt collection!
If you want to become familiar with the details related to the exact methods of debt repayment, it is worth looking into the content of the contract. Overall, however, it is known that always shortages in the timely repayment of installments or the entire loan amount is a fundamental breach of contract that we concluded during the loan. Then we have to take into account that such circumstances authorize the loan company to run the debt collection process. Its purpose is simple – it is effective to enforce the return of the full amount of debt owed. The procedure, depending on the company, may start the next day, and in some only a week or two weeks after the deadline.
At the beginning, there are sent prompts, reminders and sometimes calls for payment. They have a different form, usually text messages, e-mails or registered letters sent to our mailbox. Some companies also give themselves the right to telephone reminders that are carried out by the consultants of a given loan institution.
Already at this stage, it is worth mentioning that debt collection has its costs. Customers are burdened with them to compensate for the need to run an extraordinary procedure. As a result of the amendments regulating the market of regulatory loans, the costs of debt collection are not as high as it was a few years ago. The maximum fees due to the lack of timely repayment of the loan taken may be equal to no more than six times the NBP lombard rate. From banking to ours – they can be 15% per year. The decrease in the costs of debt collection has its drawbacks – the smaller profit from this procedure causes that loan companies more and more often transfer our debt to companies dealing with external debt collection.
External debt collection
External debt recovery is also not extremely expensive, but it still combines with extremely uncomfortable and uncomfortable experiences for debt collection. Telephone conversations with debt collectors on the details of our debt and its amount can be very stressful. In addition, urgent correspondence may be sent to us, telephone calls may be made to persuade debt repayment, and even visits of consultants in the place of residence!
Of course, it is advisable not to avoid contact with the debt collector. If we do otherwise, then we will lose the possibilities leading to an amicable solution to the problematic situation. One of them is spreading the amount into installments.
Debt collection – what’s more?
In addition to debt collection, the lender also has the right to take more serious measures as a consequence. Our personal details provided while obtaining a loan can be entered into the register of Economic Information Bureaus. In addition, the company may provide information about the borrower to the Credit Information Bureau. It will ruin our financial and creditworthiness. If we add our data to the BIG database, we will have problems obtaining a loan in the future. It will even break the possibility of taking the equipment or the car in installments, just like in the case of signing a contract with a mobile operator.
A negative entry in BIK means even more serious consequences. In contrast to the above-mentioned registers of the Economic Information Bureaus, which only show the current picture of our finances, in BIK our history of delays in repayments will be visible for the next years. In an efficient way, this can help us close the door to obtaining another loan or loan in the future.
Further deficiencies in the payment of payday loans
Even if such extensive activities of the debt collection company are not intended to be successful, the debtor’s case is redirected to court. The trend in the loan market is currently directing cases to the so-called e-court, or Electronic Proceedings (in short EPU). The electronic way of enforcing debts is intended to offload traditional courts.
What does the course of the case in the e-court look like? Instead of a classical judgment, the debtor is sent a payment order. The debtors most often find out about it when they receive it by mail. We have the obligation to settle the debt within 14 days from the receipt of the letter. Of course, if we disagree with the order, we have the full right to appeal against the decision to pay.
What are the powers of a bailiff?
In debt enforcement due to the lack of timely repayment of the loan, there is one more step, namely the bailiff. This state official has the full right to take our salary, bank account, real estate as well as high-value everyday items, such as a car and bicycle, during the proceedings. The bailiff is assigned to the debtor after deciding on the fault of the debtor by the court. It is not clearly stated how quickly from the delay in repayment the loan company will challenge the debtor, but it is assumed that it is from 6 to 12 months. After this period, almost certainly a bailiff will be able to take a bank account in the event of non-payment of payday loans.
The above-mentioned information is a perfect example of how important it is to consider taking loans and getting acquainted with the contents of contracts. Always including this type of obligation, we must remember about timely and conscientious repayment of loans, because the consequences that are associated with the lack of regularity are very serious. They can seriously affect the state of our finances, our property and the goods we have, and even the health of our health. It is worth getting acquainted with all the steps that the law gives to non-bank institutions, so as not to be surprised by their course.
Even if for various reasons we have had a problem with this – after the initiation of the debt collection procedure, it is worth completing all efforts to cooperate and not to hinder operations. For this type of debtors there are often options to spread the debt and conclude a settlement, which will undoubtedly help us to get out of a difficult situation. This should depend on both sides – after all, both the lender and the borrower lose their debts.