Types of debt collection – what are the options?

What should an effective debt collection consist of? See how to legally carry it out step by step to get your money back!

If the debtor does not contact you and does not use traditional methods of fighting debt, you should start debt recovery. What is meant by this term? It is a set of legal and procedural actions aimed at motivating the debtor to pay the obligation, which he contracted with the creditor. How exactly does this process work? You will find the explanation later in the article!

Types of debt collection – what are the options?

Types of debt collection - what are the options?

Taking into account the manner of dealing with the debtor, there are two basic types of debt recovery:

  • soft debt collection – the very name indicates that this group of activities is considered to be the mildest form of debt collection, although, in the long run, it can be quite insistent. Most often it involves calling the debtor, sending him an SMS with a reminder to pay the debts and requests for payment – for more information on the latter form, see our article.
  • hard debt collection – it starts when the soft debt recovery did not bring the desired results. In this situation, it is already known that the debtor is not willing to cooperate, or does not have the funds to repay debts. The process begins with entering it on the list of debtors and ends with court proceedings. The exact course of such debt recovery is presented later in the article.

Debt collection in 5 steps – see how it looks!

Debt collection in 5 steps - see how it looks!

1. The incurrence of an obligation – it is a situation in which the debtor is late with paying the debts to the creditor. The first debt collection steps are taken 60 days after the repayment deadline has expired.

2. Arbitration – this is the first stage of applying for debt repayment. What’s more, this is a stage that cannot be missed. To file an application in court, you need to document your attempt to reach an amicable resolution of the conflict with the debtor – otherwise, the judge will reject it. As part of it, you can send payment requests or even create a new repayment schedule – as long as the debtor contacts you.

Amicable debt collection is the most advantageous solution for both parties because:

  • avoids lengthy court proceedings,
  • is the best way to slowly and effectively exit the spiral of debt – of course, if the creditor understands the debtor’s difficult situation,
  • does not expose both sides of the conflict to unnecessary costs of debt collection and court proceedings. This should especially be avoided by the debtor, for whom it will be another commitment to repay,
  • will allow the debtor to avoid entering into the National Register of Debtors, which could be difficult to obtain a loan in the future.

3. Court proceedings – if the debtor refuses to resolve the matter amicably, you have nothing else to do but to bring it to court. Importantly, if you prove to the court that the debtor is avoiding contact with you, it will work against him.

4. Clause proceedings – its purpose is considered to be an enforcement clause, i.e. a court order for payment, which is needed to commence bailiff proceedings.

5. Enforcement proceeding – begins when the bailiff receives an application to start enforcement along with a detailed description of the actions that should be taken.

Effective debt collection – with the company or alone?

Effective debt collection - with the company or alone?

If despite your efforts, the debtor still ignores prompts and does not make a contact attempt, you can use the services of a debt collection company. Such an institution has quite broad powers. This means that it can use all of the previously mentioned methods – from sending requests for payment to entering on the list of debtors.


A debt collection company may also be independently interested in your debtors’ obligations and buy them on the debt exchange. In this way, you will receive money in principle, although usually in a slightly lower amount. Negotiations with the debtor, however, take over the company, and you will not have to worry about anything. So if you care about time more than recovering the full amount, this is a good way out of the situation.

As you can see, effective debt collection is a process that can take a while. That is why it is worth starting it as soon as possible – thanks to this you will also avoid any possible time-barring of the debt. What should you know about this? More details on this topic can be found here: “Do the debts expire” – check it out!

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