The tactic of debt collection companies is known to harass debtors with phone calls in order to achieve the collection of arrears. This is legal and acceptable to the extent that it has been judged by the jurisprudence of the courts. That is, there should be a limit of phone calls per day, no third parties, etc. a lot.
It is also known that words like foreclosure and foreclosure cause a lot of stress and emotional stress to the majority of borrowers who are unable to service their loans. Many of them, even today, are not sufficiently informed about the foreclosure process and the legal path that must be followed in order to make a seizure and put a house up for auction.
In recent years it has been observed that the collectors do not always act within the limits of good faith, reliability and full legality, but use not so convenient means to achieve their goal.
For example, people who do not have the legal status, nor of course the legal knowledge, present themselves as lawyers to the debtors. This quality causes anxiety, stress and fear in many people, especially older people. Not infrequently, using the legal capacity, they intimidate the debtor that if he does not pay immediately, his residence will be seized the next day. Under this emotional pressure and the threat of immediate confiscation of their property, information is extracted from them that otherwise collection officials would not have access to.
Also, under the threat of a direct auction, they pressure them into immediate payment of sums of money without having previously signed a loan agreement or even to sign a loan agreement with the lure of a big haircut and debt reduction.
So why then should the debtor take the plunge and immediately consult a lawyer before taking any action that will unknowingly be legally disadvantageous to him?
- When a proposal is usually made for a haircut and reduction of the debt from the funds, two are the usual cases:
a) The debtor does NOT have any real estate in his name.
What does this mean for the debtor? It means that the fund cannot go through the court process, (that is, through the termination of the loan agreement, the issuance of a payment and the initiation of forced execution) to auction the property because there is simply no property and it is trying to entice him to give some amount voluntarily.
So it tries to get the borrower to pay any amount since the fund has no benefit to proceed with an auction. B.C. if a debt amounts to 70.000 euros with interest and late interest, a proposal can be made for a settlement to 5.000 euros or even a one-time payment of a smaller amount and repayment. Why is this happening?Because the collection agency will take at least this amount out of nothing that it will receive if the debtor does not pay money voluntarily.
b) The fund cannot submit an application for a Payment Authority to the Court because it does not have all the required documents.
What does this mean for the borrower?
So he tries to pressure the debtor to agree to accept the debt by signing a new private agreement with fund acceptance of the debt in which the amount of the total debt is always indicated (which can rarely be checked by the debtor if it is real and legal) and then the reduction and the agreed payment installments.
In this case, the debtor signs a contract of acceptance and recognition of the debt, owes it in full and if he does not comply with the agreement, the collection agency will have at its disposal a private agreement with which it can move to proceed with execution and auction, which it could not be done if the debtor had not signed this new contract.
- When the collection agency pushes for immediate payment of money to a bank account:
In addition to the above two cases a) and b) it may mean that the debt file has been given to a small collection company trying to receive payments which, if not accompanied by a settlement agreement, end up at best being credited to the costs of the loan or to overdue interest and not on the outstanding capital with the result that there is no substantial benefit for the borrower especially if this is done on a regular basis.
- When the collection officers ask a lot of questions asking for information:
Practically it means that they have come to some kind of impasse. B.C. the original debtor may have died and the questions elicit information about the date and place of death as well as his relatives and even their financial situation so that they can then collect the required information and take action against them if this is possible or try to get the heirs to sign the debt acceptance and settlement agreement with the consequences detailed above.
The general practice shows that when the collection agency has a strong loan agreement and there is real estate, it does not call the debtor, does not offer him a settlement or capital reduction. Without any warning, it first terminates the loan agreement (if it has not been done in the past by the bank) and then issues a payment.
Any persistent approach by the debtor to settle the debt does not only mean good will on the part of the collection agency, but possibly also an attempt to create for its benefit the conditions that will help it to claim sums of money in the future.
Par'Areio Pago Lawyer Anastasia Chr. Miliou
photo geralt, https://pixabay.com
