The consequences of non-repayment of a loan on time are always severe, regardless of how the particular loan company prefers to collect the loan. One thing is certain – each of them depends on recovering all or a larger part of the debt in the shortest possible time and, it must be admitted, has a wide range of resources to do so. One of them is the debt exchange, also known as the debt exchange.
The debt exchange can be called a list of information on debt in a few words. Not only information on unpaid liabilities appears on it, but also information on debtors made public. Then the debt can be bought by someone who is sure that his actions will result and the debt will be recovered. Debt exchanges operate on the same principle as other sales portals, and you also have to pay for filing a debt sale announcement.
Who uses the debt exchange?
Obviously, it is most often used by creditors who have problems with recovering their money and do not have the resources to do it effectively or want to get rid of the “burden” as soon as possible, even for a fraction of the amount due. They believe that further recovery proceedings may generate too high costs, simply be unprofitable and uncertain. So they decide to recover even a small percentage of debt – a small but certain amount is better than the full amount, which may take several years to recover.
On the other side there are, of course, specialized debt collection companies that achieve very high efficiency in collecting debts and sometimes buy debts in bulk to earn up to several hundred percent of the value for which the debt was bought. Obviously, the collection methods used by such a company are omitted, and unfortunately, it must be admitted that they are often not very ethical methods.
Often, this solution is also used by entrepreneurs who plan business cooperation with another entity, but do not know anything about its past and the real financial condition. So they scan a potential partner on the debt exchanges to verify his credibility.
Do loan companies use a debt exchange?
It is difficult to answer this question unequivocally, as the decision to issue debt for sale depends on many factors: the company’s internal policy, its structure, the presence of its own debt collection department and its degree of expansion, financial condition, cooperation with other departments.
Few non-banking institutions have extensive, self-sufficient debt collection departments. These departments, of course, exist, but they are usually limited to residual and very limited reminder activities, which are the first step in amicable debt collection: so they monitor the situation and terminate the contract if necessary (check in which case it may occur), send reminders and make phone calls to customers. Some companies have their own field employees who can conduct more effective operations, but maintaining many jobs in various places in Poland is expensive, so most often such activities are abandoned. That is why most institutions decide to cooperate with a professional debt collection company – most often cooperating with one already proven company. However, the debt exchange allows you to hope that someone will pay more for the debt and this is often the solution.
The greatest psychological effect
Debt issuers admit that buying someone else’s debt is a last resort. The psychological effect, the so-called “bogey”, may be more visible here. Issuing a debt publicly can act as a motivator for the debtor and will speed up repayment. Internal reprimanding takes place only between the debtor and creditor, and his name will be visible on the debt exchange. A lot of people are afraid of social ostracism and ridicule, so they will want to get rid of public stigma as soon as possible.
Is it legal?
Personal data protection may be a contentious issue in the debt exchange. Many people will wonder if it is legal to place a debt on sale, including the debtor’s name. Well, the law states that the processing of personal data is possible and permissible in the event that it is necessary to fulfill a legally justified purpose (the Act on access to business information). The pursuit of your claims arising from business operations is deemed to be such a purpose. The loan company may therefore provide such data (name, city, street without number, year of birth) without the consent of the debtor.
I am on the debt exchange list – what to do?
There should be one answer: pay back the debt. This is the last bell before real debt collection and real costs. The debt, at the time of listing it on the stock exchange, has not yet grown to incredible proportions, but this will probably happen when the debt collector visits. However, repayment can be problematic if you do not have sufficient funds, although loans for those in debt, including pledged loans or with a guarantor, can come in handy. This is a last resort, which should be taken only if you are sure that the next loan will not become the next debt.