Soft debt collection - rules

Enforcement of outstanding debts has long been seen as a complicated action and not always as successful as expected. However, entrepreneurs have to resort to it when their clients have been delaying payment for given services or goods for a long time. However, before they decide to apply hard debt collection, i.e. to pursue their rights in court, they should use the so-called soft debt collection.

What is soft debt collection?

Soft debt collection aims to establish debt repayment terms that will be accepted by both parties to the conflict, and to reach an agreement between these parties. It is usually based on sending reminders for payment via letters, telephones and text messages. Thanks to this, you can delay the investigation of your cases during a court trial or with the help of a bailiff or abandon them at all.

Debtors' registers

Another possibility to enforce debts using the principles of soft recovery is the transfer of information about them to the debtors' register managed by the Economic Information Bureau. It is a database containing data on arrears of both clients and entrepreneurs, which helps in recovering money and in risk assessment. Each entry in the register is associated with the notification of debt to such entities as: banks, insurance, leasing and telecommunications companies. In this way, the debtor may encounter problems when trying to use the services of the above-mentioned companies.

In order to be entered in the debtors' register, the following legal criteria must be met:

1. In the event that the debtor is a company:

• the value of the entered debt must be at least PLN 500,
• the overdue period cannot be shorter than 60 days from the repayment date,
• 30 days must elapse from sending the company a reminder about the overdue payment, together with information about the plan to enter it in the debtors' register.

2. If the debtor is a consumer:

• the value of the entered debt must be at least 200 PLN,
• the overdue period cannot be shorter than 60 days from the repayment date,
• 30 days must elapse from sending the request for payment with information on the intention to enter into the debtors' register.

Currently, there are four Economic Information Offices on the Polish market that keep registers of debtors. These are:

1. BIG InfoMonitor

In the case of this office, debt collection is carried out in several stages:

• stage I: registration in the system,

• stage II: signing a contract with BIG InfoMonitor,

• stage III: sending a written request for payment by registered mail, which should include a message on the commencement of cooperation with BIG, as well as on the consequences of failure to settle the amount due (entering the client in the Register of Debtors),

• stage IV: after 30 days from sending the request for payment together with the information about the plan to place the debtor in the Register and 60 days from the agreed date of payment of the receivables, you can log in to the BIG system and place the debtor in the Register,

• step V: sending the debtor by mail that he has been entered in the Register of Debtors.

2. National Debt Register BIG S.A. (KRD):

The initial step when reporting the debtor to the register in the National Debt Register is the same as in the case of BIG InfoMonitor - you must sign the contract. The other party to the contract is the KRD, and its subject is the dissemination of economic data. Another condition is to purchase an appropriate subscription, and sometimes also to be the owner of an appropriate executive title.

After obtaining the outstanding amount from the debtor, this fact should be reported to the KRD immediately.

3. ERIF registry

Another of the existing debtors' registers in Poland allows you to check a partner or client, as well as to enter the debtor in the database. The individual stages of further action do not differ much from those mentioned above.

4. National Economic Information Office S.A. (KBIG)

The rules and possibilities of cooperation with the above-mentioned office are similar to those related to the debtors' databases discussed earlier. To start cooperation with KBIG, you need to sign a contract, and after completing all formalities, you can publicly publish messages about unpaid debts of your clients.

Soft debt collection through several forms of asking for debts (especially those that are possible thanks to Economic Information Bureaus) may contribute to the recovery of overdue money. This method will prove to be the most effective when the debtor is aware of the negative consequences of delaying payment for services rendered.

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