Selling debt to collectors: procedure and consequences

Today in Russia, resale of debt to collectors is increasingly practiced. This is not surprising. For a year and a half, the dollar rose by 60%, which led to the fact that borrowers can not repay foreign currency loans. Banks have to turn to collectors. Let us consider in more detail how legitimate is the fact of resale of debt and how the procedure itself occurs.

Advantages and disadvantages

Selling debt to collectors is beneficial primarily to the bank. A credit institution gets an opportunity to get rid of debt, covering losses. The borrower may not comply with a court decision to collect debt if he does not have valuable property and a bank account. And if still officially a person receives only a minimum salary, then he will return the debt for years, so it does not always make sense to go to court. Moreover, to work with problem customers, banks contain call centers whose employees need to be encouraged not only with salaries, but also with bonuses.

Selling debts by banks to collectors has one serious drawback - the inability to receive the full amount with interest and penalties. For the transfer of debt will have to pay approximately 30% of the amount. All the same, the bank will receive its profit at least due to insurance against non-return. But there will also be lost profits.

Statistics

As for individuals, most banks are ready to restructure debt rather than calling the client and independently control large amounts of information. Credit institutions need a good reputation to attract new customers. One indicator of this same reputation is the percentage of "defaults" on debts. Selling debt to collectors can help improve statistics. Credit institutions that are effectively working to reduce the "bad" numbers can enjoy the benefits of the Central Bank.

Process

How are individuals selling debt to collectors? The Banking Law does not regulate this issue in any way. Therefore, borrowers can correctly put collectors in place, if, of course, they can cope with professional ransomware. The staff of large collection agencies includes professional psychologists who, by manipulating, can knock out debt from ordinary citizens. One-day agencies employ racketeers who collect money from abusive and unprotected pensioners and people who have had difficult life circumstances. Most often, threats and blackmail are used for this purpose.

Is selling debt to collectors legal?

Russian laws allow the transfer of debt to third parties even without the consent of the debtor (Article 12 of the Federal Law, Article 382 of the Civil Code). Selling a debt of a legal entity to collectors implies a cession of the right to claim a refund. The transaction is executed by the assignment agreement between the first creditor and a third party. In this case, the obligation of the creditor is to inform the debtor of the signing of such an agreement.

The Federal Law "On Consumer Loans" gives lenders the right to transfer customer information when transferring debt to collectors. The latter is supposed to keep information secret, but in practice it becomes public. For example, when a collector tells the employer the amount of his subordinate's debt, he breaks the law. Let us consider in more detail how the agency works with the first creditor.

Credit institutions usually sell debt to collectors after one year of late payment. In this case, the debt increases by the amount of fines and penalties. The transaction will be legal only if this clause is specified in the loan agreement.Collectors usually work with clients under an agency agreement. In this case, they do not have the right to credit and appropriate the collected funds. That is, the lender does not change. The bank simply temporarily transfers to the agency the authority to notify debtors of the amount of their debt for a fee.

Collectors collaborate with individuals under a loan agreement. It should spell out the possibility of assignment of the right to claim debt. Selling debt to collectors is illegal.

Breaking myths

The most important misconception of debtors is that the sale of a debt is illegal. As mentioned earlier, the Civil Code and the Federal Law “On Consumer Lending” stipulate that the assignment of the right to demand a debt may take place if this clause is written in the loan agreement.

The second misconception is that, in the opinion of the debtor, if the bank did not report the sale of the debt, the operation is also not legal. In Art. 382 of the Civil Code states that if the debtor does not receive notification of the transfer of the debt, the creditor has a risk that the client will not pay the debt. Lack of notice is not a reason to challenge the transaction. It simply means that the debtor can pay the debt to the old or new lender. If the client has not received a notification and continues to pay the debt to the bank, then the collection agency does not have the right to demand anything from him.

Methodology

Selling debt to collectors by banks is carried out in packages. Credit institutions collaborate with several agencies at once, choosing optimal conditions for the transaction. The bank sells only unpromising debt for which there has been no payment for more than 1 year, there is no collateral, as well as debt in which the debtor is not the owner of the property. Debt is also sold to collectors after a court decision, if nothing happens to get from the client. Debts that could not be sold are to be written off after three years.

The powers of the new creditor may not exceed those that the old had. First of all, collectors attack debtors who can or promise to pay something. Agencies can independently choose what debt to redeem and for what amount. For this purpose, lenders fill out a special form during the filing of the application, and the administration decides whether it is worth undertaking the case. The key factors are:

• legality of transfer of debt;
• amount of debt;
• delay period;
• availability of collateral;
• the amount the creditor wants to receive.

Selling housing and communal services debts to collectors is almost impossible. Agencies take only large (more than 500 thousand rubles) "fresh" debts.

After the sale of debt

After purchasing a debt, collectors may only require payment of the amount accrued at the time of signing the assignment agreement. The bank may sell the agency the amount of the principal debt, taking into account interest, fines, penalties and interest. After the conclusion of the transaction, collectors do not have the right to put debtors “on the counter”. That is, if the contract was signed on 01/01/16, then collectors may require payment of arrears accumulated before this period. They are not entitled to charge interest or penalties for the period from 01/01/16 and until payment is received from the client.

This requirement is valid provided that no other conditions are specified in the law or the loan agreement. In practice, the rights of a new creditor are included in the assignment agreement. Banks often sell debt to the agency by drawing up one assignment agreement for 100-500 loan agreements. This is contrary to Art. 384. As a result, there are a lot of lawsuits in the court to appeal the amount of debt due to the fact that:

• Each debtor must have a separate agreement.
• If the borrower has security in the form of a guarantee, insurance or collateral, then the “collective agreement” mixes up different requirements. It turns out that collectors set requirements for securing obligations.

Borrower rights

In Art. 385 of the Civil Code said that the debtor may require the creditor to provide evidence of the transfer of the right of claim. A call, a letter or an oral conversation with the agency staff is not such. The proof is a copy of the assignment agreement certified by the seal of the agency. If the collector refuses to provide a document, the debtor has the right not to fulfill the requirements.

In Art. 386 it is said that the borrower has the right to express his disagreement with the claims of any of the lenders. For example, if a bank has calculated unreasonable commissions and has already sold a debt to a collector, the borrower has the right not to pay excessively accrued amounts.

How to be debtors?

Selling debt to collectors of anyone can be taken by surprise or shock. Agency employees need not be afraid. If the debt is overbought, but the client is still going to pay, a number of operations must be performed.

Get information from the bank about the new lender (agency name and address). They will need to be verified with the assignment agreement. After signing this document, the bank no longer has the right to demand a refund.

Wait for the collector to ring. You don’t need to look for a lender yourself. He must present his requirements himself. You should make an appointment by phone at the agency’s office and notify in advance of your desire to study the documents: the assignment agreement itself, an extract from the bank with justification of the amounts, the agency’s charter documents. Be sure to notify that you want to take copies of all documents for a legal examination. If scanning is carried out without you, then you need to verify the documents provided with the originals. All documentation should be studied with a lawyer. Even better if you can bring a representative to the meeting.

Recalculate the amount owed. Agencies do not have the right to wind up amounts, and selling a debt of an individual to collectors on receipt is not legal at all. Therefore, if at least something is embarrassing in the documents, you should immediately apply for a lawsuit in court. You cannot pay anything until an official decision is made. Litigation with collectors account for 25% of cases with lawyers.

If the documents are drawn up correctly, then you should ask for debt restructuring. The agency does not have the right to refuse this right. Pay should only be on the official details. For each operation, a receipt should remain. These documents should be kept for at least 5 years.

Often, to speed up payment deadlines, agency employees use blackmail, threats, and rude behavior. All conversations with collectors should be recorded at least on audio tape, in order to provide evidence to law enforcement if necessary.

Exceptions

In Art. 387 of the Civil Code, there are cases in which the sale of debt is legally possible:

• as a result of universal legal succession;
• By the tribunal's decision;
• due to the performance of the obligations of the debtor by a third party;
• with subrogation of creditor rights.

Another special case is spelled out in Art. 388 Civil Code. If for the debtor the identity of the creditor is of particular importance, then the transfer of debt is possible only with the written and express consent of the borrower. In loan agreements, the phrase "agree to the processing of personal data and the transfer of the right to claim debt" is often found. To refer to melon texts within the framework of Art. 388 will not work.

Conclusion

Selling a debt of a legal entity to collectors does not violate the norms of the law. Debtors need to study their rights in detail and actively defend them. This will not only significantly reduce the ardor of collectors, but also help reduce the amount of debt.