Frequently Asked Questions - FAQ
Debt collection agencies provide services in two ways:
Debt collection on behalf of the client – agencies charge fees for their work based on their efficiency, i.e. only if the debt has been collected. The agency arrangement does not increase the initial principal amount of the debtor.
Debt purchase – agencies charge fees for their work based on the difference between the debt purchase price and the collected part of the debt, as well as from all collection costs that have incurred in the process, such as costs for employees, lawyers, notaries, state court fees, taxes and the like. During the debt collection process, we do our best to accommodate the debtor by offering adjusted payment models based on the analysis of their financial situation. We take into account if a debtor is employed or not, i.e. whether he/she is able to pay the debt within the proposed deadline.
Receivables are in a legal sense somebody’s assets and everybody can manage and control their assets at their will, either on their own or by the help of a debt collection agency, subject to all laws and regulations in effect. The agencies treat debts the same as would other companies that want to collect their debts.
After debt has been purchased, the agency always tries to contact the debtor by phone in order to arrange the payment method suited to the debtor’s financial possibilities. Communication is the basis and the starting point for reaching an agreement and for a successful solution to the problem. During the conversation with the debtor, we try to find the best solution and we arrange the debt payment within the deadline that is reasonable for the debtor, not creating additional costs and avoiding the initiation of enforcement procedure.
When a debt collection agency purchases the debt, it does not affect the debt amount. The debt, resulting from non-payment, increases due to statutory default interest and, for instance, enforcement procedure costs. The goal of each party is to settle the debt without having to initiate enforcement procedure, which also implies less costs for the debtor.
We are aware that it is sometimes hard to pay the whole amount within a brief period of time and we try to accommodate the debtor as much as we can by offering adjusted payment models and by taking their whole financial situation into consideration. We take into account if a debtor is employed or not, i.e. whether he/she is able to pay the debt within the proposed deadline. If in the meantime a debtor loses his/her job, it is crucial that he/she contacts the agency that has taken over his/her debt in order to adjust the dynamics of further payments. A complete debt write-off is also possible for the category of socially vulnerable citizens so that their livelihood is not additionally jeopardized. The agencies are actively making an effort in defining social criteria within legal solutions that would protect the most vulnerable citizens.
The agencies are always trying to determine debtor’s payment possibilities and are trying their best to accommodate the debtor. Faster debt payment implies less cost for the debtor. Even when a payment dynamics has already been established, we always communicate with the debtor in order to determine if there is a possibility of an increase of a monthly debt amount that would shorten the payment deadline. If debtor’s income increases and he/she can pay the debt before the agreed deadline, he/she has the right to do so, and agencies then correct the payment amount accordingly.
Debt collection agencies use all legal possibilities in order to avoid the initiation of enforcement procedure so it is crucial to contact the debtor and define a viable payment method, in line with the debtor’s possibilities. If that is not possible or if it is not possible to contact the debtor, debt collection agencies, as well as other creditors, have the right to charge legal default interest and to initiate the enforcement procedure according to the Civil Obligations Act. So in order to avoid the initiation, it is important to maintain a regular communication and to contact the agency if a debtor cannot, in a particular period, pay the agreed amount.
In line with the global and European debt transfer practice, debtor’s consent is not necessary because this process is run in line with the Civil Obligations Act in case of a cession. According to this Act, the creditor has the obligation to notify the debtor that there has been a change of a creditor, i.e. that an agency has taken over the collection. The usual practice is that agencies additionally inform the debtor about the debt transfer, although they have no obligation to do so. This is the way to make sure that the debtor has received the information on financial receivables transfer from the creditor to a third person, with all the rights and obligations, because written notices often don’t reach specific debtors.
Debt collection agencies call only the numbers specified in the contract signed by the debtor. Friends and family are not the way of contacting the debtor. The call centres of all eight members of Croatian Association of Debt Collection Agencies work from Monday till Friday from 8 a.m. until 8 p.m. or on Saturdays from 8 a.m. until 5 p.m. If anyone calls you at times not specified above and present themselves as members of the Association, please report this by e-mail to firstname.lastname@example.org or call 01 59 99 900
The agencies must observe any applicable laws and regulation on personal data management. In line with the Civil Obligations Act, debt collection agencies become data controllers after they have purchased the debt from other companies. The companies have the obligation to inform an individual about debt ownership transfer, thus also about the transfer of their data. Since the companies send unregistered letters, debt collection agencies take over the additional responsibility by calling debtors in order to be sure that the information has reached the debtor.
The debt exists until the debtor pays off the debt. If a debt collection agency has purchased somebody’s debt, it doesn’t mean that the agency has paid it off – the agency has just taken over the debt or is trying to collect it on behalf of a company which has already provided a service. Since debt collection requires big resources for small debts, companies may transfer their receivables to agencies that thus become legal owners of the debt. The companies are under no obligation to ask for a debt transfer consent from the debtor, they just have to inform them about it, and the agencies, at their own initiative, take over the responsibility of informing the debtor to be sure that the information has reached the debtor in time, although they are not legally obligated to do so