In a situation where attempts to enforce the debtor’s debt are ineffective, the creditor may take advantage of the possibility of selling the debt to the company involved in the purchase of liabilities. It gives you the opportunity to regain the creditor’s financial liquidity. The sale of receivables is now possible with the use of numerous financial and legal tools.
What debt can you sell?
Among the receivables being the subject of the sale, there are, first and foremost, those which, despite having an enforceable title and referral to the court, have still not been returned. Debt collection companies buy only packages of overdue liabilities from legal entities, such as banks or enterprises. However, they do not buy single claims held by anonymous natural persons or those which have not been secured. Thanks to the purchase of a package of liabilities, it is possible to diversify the risk, which in the case of one claim becomes very high. Debt sale offers start from as much as 80% of their value. However, their purchase takes place at prices ranging from 0.5% to a maximum of 40% of the value.
Who will buy our debt?
If you want to sell your debt, you can contact the debt collection company directly. However, a more effective method will be the announcement on the sale of receivables on the public debt exchange. It is necessary to recalculate its price in advance, which will largely determine whether it will be successfully sold. There is a good chance that the claim will be bought by other entrepreneurs who are the debtor’s contractors. In this way, in defaulting on the payment of debts, they can repay part of the debt and thus reduce their obligations to him. Another way is to find a competent debt collection company that will take over the debt recovery by securing the case as an executive title and will reach the necessary information through an appropriate environmental interview. It may be associated with low sales prices and long waiting times, but it is one of the methods to recover a portion of the debt.
Assignment of receivables
One of the ways of selling debts is the assignment of receivables. The assignment is carried out on the basis of a civil law contract under which the creditor changes, ie the person enforcing the debtor’s payment. The assignment rules are governed by the provisions of art. 509-516 of the Civil Code. The obligation that arose between the creditor and the debtor gives the creditor the right to claim their debts, the debtor, in turn, imposes an obligation to pay the debt within a specified period. Based on Article. 509 of the Civil Code, it is possible to change the creditor without the consent of the debtor, except when the contract concluded between them provides otherwise. Therefore, a creditor can become another person or legal entity, such as a debt buying company. The change of the creditor takes place through the conclusion of the assignment agreement. As a result, the obligation remains in the same form, the debtor’s debt remains unchanged, only the person for whom it is to be repaid changes. Legal consequences, however, cause the debtor to notify the creditor. He may still exercise his rights and present charges against the new creditor in the same way as against the original creditor. The form of the contract for the assignment of claims may be any, however, in the case when the contract for the sale of debts was concluded in paper form, the contract for the transfer of claims should also be drawn up in writing.
Restrictions on assignment of receivables
There are three restrictions that prevent the assignment of claims arising from the general principles of rights regarding obligations contained in the provisions of the Civil Code. The first of these is the restrictions imposed by the relevant laws on the right to remuneration for work, pre-emption rights, the right to life, compensation for damage to a person, etc. The second limitation are contractual reservations. The parties may stipulate in the contract that the creditor can not be changed, which is beneficial to the debtor. The last caveat to conclude a transfer agreement are the properties resulting from the commitment. They are associated primarily with personal benefits as in the case of claims for the protection of personal rights. Are you interested in additional knowledge? See how to check a deceased person’s debts .
Exchange of debts
In addition to the traditional way of selling debts, and thus the debt assignment agreements, you can also use the debt exchange, also known as the debt exchange. It is a kind of a register of economic information regarding offered for sale various types of claims. It becomes a very popular tool that allows you to recover your debts. The service is used not only by creditors offering debt sales or debt collecting institutions buying debts. The debt exchange is also a very good source of information for entrepreneurs. On the basis of information posted on the website, they can check the credibility of their contractors.