According to the law, the creditor of the loan has a number of rights to recover benefits which he temporarily entrusted to the property of another person. If the person defaults …
According to the law, the creditor of the loan has a number of rights to recover benefits which he temporarily entrusted to the property of another person. If the person defaults on the repayment terms, the lender automatically becomes a creditor towards the person in debt. Therefore, he has the right to take a number of legal actions aimed at recovery of debts. The creditor can be a bank, a loan company or a private individual.
The scope of rights held by the creditor
The exact scope of the creditor’s obligations is regulated by relevant acts and the Civil Code. Let’s start with the fact that most loan creditors try to avoid going to court. Often, this means additional costs and a loss of part of the amount due. Instead, the creditor will first try to work out a compromise that will allow the debtor to pay the debt further. For this purpose, it may use a debt collection company that will act as a mediator. It should be mentioned here that the debtor is not obliged to cooperate with the debt collector.
If the attempts to settle the matter amicably fail, the creditor has two solutions. Write off the debt, which practically does not happen, or apply to the court to start bailiff proceedings. If the case does not concern real estate, the creditor may indicate any bailiff which is to act in his interest. It is worth mentioning that if the civil law agreement between the parties did not reserve this option, the loan creditor may “sell” the debt to another entity, which from now on will become a new creditor and will seek recovery. This solution is often chosen by private individuals.
The creditor is not the enemy of the debtor
Many debtors see the creditor as an enemy lurking for their property. This erroneous thinking, which leads to many problems and ends with a bailiff’s execution. Contrary to appearances, this is the least favorable solution for both sides. In practice, the costs of court and bailiff proceedings are borne by both the creditor and the debtor. Thus, the debtor unwilling to engage in dialogue may lose much more than the value of the outstanding commitment. An attempt to negotiate and find a common consensus is therefore a much better solution.