Collectors. Actually, this is a fairly common practice, especially in Russia. Applies to everyone indiscriminately. And it is precisely this behavior that causes fear, panic and apathy among citizens. Why? Collection companies do not always act legally and humanely. They are faced with a task: with all their might, no matter what kind, to get the debts out of the debtor. And everything, to the last penny, and in the shortest possible time. Can debt be sold to collectors? How legal is this? What awaits you in such a case and how to deal with this situation? More on all this later.
Is there a right
It’s worth starting with the legality of the operation. After all, if the bank does not act according to the law, then you will be able to prove it, and then also remain, as they say, in the black. That is, you will be able to protect your rights. This is quite normal.
Collectors? Nothing can be said for sure about the legality of this action. I can only advise you to carefully read the terms of your loan agreement. Why? Because all the points that may concern both the borrower and the lender are written down there. So read the document carefully before signing it.
You can often see here a clause about the right to transfer debt to third parties. This is precisely what indicates the legality of the actions. Can a bank sell debt to collectors? If there is such a mention, it’s easy. Moreover, this kind of event is considered legal. If this clause is not specified in the contract, then transferring the debt to anyone is simply impossible.
When
The legality has been more or less sorted out. What's next? When, for example, can you fear a collision with collection companies? After all, some people suffer from them, and some don’t. But at the same time, both the first category of persons and the second have debt.
Can debt be sold to collectors? Easily, and legally. Just look carefully at the terms of your contract. When exactly can you encounter this problem? There are certainly no algorithms or recommendations here. After all, it all depends on the specific bank. Usually, communication with collectors begins after the debtor has already accumulated a decent amount of debt. Which exactly? This is already decided by the bank at its own discretion. For some, collectors may come to you after the first month of delay, while others don’t pay at all for years and are not afraid of anything or anyone.
In principle, they often begin to fight with persistent defaulters after approximately 2-3 months of delay. No matter what amount has accumulated. It is much less common for collectors to appear 3 years after debts arise. Such cases are perhaps the most legitimate. But, unfortunately, they are almost unrealistic. In practice, banks almost run to collection companies after the very first late payments.
What news!
True, not everything turns out as simply as it seems at first glance. The main advantage that banking and credit organizations have is that the borrower’s consent is not required to transfer debt to third parties. That is, news about this event may come as a surprise to you.
Does the bank have the right to sell debt to collectors? If the contract contains a clause on the transfer of obligations to third parties, then completely. And on legal grounds. Otherwise, your rights will be violated. But in practice, few people care about this. It often happens that debtors learn about resale directly from collection companies. That is, banks act as they see fit. Although it would be worth warning citizens. And all this is not even for their sake, but to protect yourself from certain consequences. But they don’t do this out of principle; they present debtors with a surprise in the form of communication with collection companies.
I won't pay
Did the bank sell the debt to collectors? What to do? First of all, don't panic. The mere mention of collection companies often causes citizens to fall into apathy. You shouldn't do this. First, calm down and try to understand that everything is not as scary as it seems. Despite the fact that the bank has delegated “knocking out” the debt to third parties, you have your rights. And they can be operated on.
Firstly, from the new creditor you have the right to demand all documents confirming the transfer of debt, as well as regulating the actions of a particular company. That is, you must be presented with evidence of the transfer of rights. Until the collectors do this, you can legally not pay. In reality, such companies usually don’t do much paperwork. This means that there is a possibility that the bank and collectors are acting by agreement, without having any supporting documents. In such a situation, simply do not pay. You have the right to this.
Claims
What to do if the debt was sold to collectors? The second point of action is filing claims. It is relevant only if you had them in relation to a banking organization. That is, you can complain about debt collectors.
Remember, this behavior scares many. After all, collection companies are not bank assistants at all; in Russia they are a real business, which has its own unspoken rules of behavior. Often, a simple complaint from a debtor can cause a lot of trouble. And all this is due to the fact that the work of collectors itself is not always legal. Moreover, in Russia they are now increasingly beginning to prove the illegality of this business. So don't be afraid to make a claim.
Easier to pay
Has your debt been sold to collectors? Some citizens believe that in this situation, the easiest and most logical thing to do is to gather strength and pay off debts. And with everyone. So that everyone can leave you behind and you can live in peace.
In principle, this is an option. Especially if you have the ability to pay the bills. Why? Because only the absence of debt will distract collection companies from you. However, in practice this kind of technique is used extremely rarely.
Why? It's all about the activities of collection companies. Most often, either debtors do not have a real opportunity to pay for one reason or another, or they simply want to protect themselves. And at the same time, collectors do their best to “knock out” funds, violating their rights. So why then do you need to pay? What to do in such a situation?
Do you have your camera with you?
Has your debt been sold to collectors? What should we do now? In general, it's up to you to decide. But in practice, most often, collection companies act illegally to intimidate and extract debt from the debtor. Regardless of his situation in life. This is wrong and illegal. You need to protect yourself.
Therefore, always carry a video/photo camera and a voice recorder with you. And in general, everything that can prove a violation of your rights. The main activity of debt collectors in collecting debts is nothing more than damage to other people's property. Try to record all such violations, and also stock up on witnesses. You never know, you will need them.
The main thing is not to pay your bills right away. If they acted against you illegally, you don’t have to pay. Instead, all that remains is to go “where you should” in order to defend your own rights. A few years ago, this practice was not so common, but recently such events are happening more and more often.
Straight to court
There is no need to be afraid of debt collectors. In fact, if you approach the issue correctly, you can still remain in the black. That is, not to pay the debt, and also to collect certain funds from the bank/collection company. How exactly is this done? Going to court!
The main thing here is the presence of evidence that indicates a violation of your rights. Most often, a few disinterested witnesses (for example, neighbors), as well as the established fact of damage to your property, are enough. Printouts and photographs of threats and so on - all this can be recorded and brought to court with a claim.
In this situation, most likely you will win the case. And they will not only remove the debt from you (especially if the damage caused is several times greater than the amount of the debt), but also force the collectors or the bank to compensate for the damage - both material and moral. The main thing is to prove the illegality of the actions of the new creditor.
Anti-collectors
Another modern solution is to contact anti-collection companies. There, for a small fee, they will help you overcome new creditors. That is, they will provide advice on further actions and help you go to court.
True, this method is not yet so popular in Russia, but from year to year it is increasingly in demand. Contacting anti-collection companies can protect you from illegal actions of debt collectors, and will also most likely relieve you of debt.
The collection company informed me that the bank sold my loan debt to them, and now I have to pay money to the collectors. This is true? Should I pay the collectors?
In normal banking practice of debt collection on loans, 2 main methods of working with debtors are used:
1) Without assignment of rights of claim under your agreement in favor of a third party (collectors).
With this option, you remain a debtor to the bank; the bank itself files lawsuits to collect the amount of debt from you. However, to more effectively influence the debtor, a collection agency is involved, which works directly with you, sends letters about the need to repay the debt, calls, writes, etc. That is, you still need to repay the loan in favor of the bank.
2) With the assignment of rights to claim the debt under your loan agreement in favor of a collection agency.
This option differs from the first in that you become a debtor to the collection agency because the bank sells your debt to collectors. With this option, the debt must be paid to collectors.
Is it legal to sell my loan debt to debt collectors?
As explained by the Supreme Court of the Russian Federation (), the Law on the Protection of Consumer Rights does not provide for the right of a bank or other credit organization to transfer the right of claim under a loan agreement with a consumer (individual) to persons who do not have a license to carry out banking activities, unless otherwise provided by law or an agreement containing this condition, which was agreed upon by the parties at its conclusion. The legislation does not directly prohibit the sale of debts of individuals in favor of collectors, so the issue is mainly resolved based on the terms of a specific loan agreement. If your agreement with the bank did not stipulate the bank’s right to “sell you” to collectors or the assignment requires your consent, you have the right to challenge such assignment of claims in court.
So, if you have received a letter from debt collectors demanding repayment of a debt, you need to read it carefully and understand which of the two options is the case in your case.
If the letter states that the bank, on the basis agency agreement or contract of agency engaged a collection agency to collect your debt and the collectors are asking you to pay off debt to the bank, this is the first option. This means that the bank needs to repay the debt. Sometimes in practice, collectors indicate in a letter their details for paying the debt. However, we recommend in this case pay the loan debt directly to the bank to avoid controversial situations and misunderstandings.
If the letter is called “notice of assignment of claims”, We are talking about the second option. When receiving a notice of assignment of rights of claim, your actions should be as follows:
1) Obtain evidence of the transfer of claims under your loan agreement from the bank to the collectors.
According to the law (Article 385 of the Civil Code of the Russian Federation), you have the right not to pay debt collectors until you are provided with the appropriate evidence.
We recommend that, as soon as possible after receiving the notification, write a response letter to the collectors, in which you need to ask them to provide you with a duly certified copy of the agreement on the assignment of rights of claim between the bank and the collection agency, as well as documents directly related to your loan (loan agreement, bank statements account, etc.).
The letter is sent to the collectors' address by registered mail with acknowledgment of receipt. When sending at the post office, be sure to take the postal receipt (it will contain the letter ID number, by which you can track the receipt of your letter by the collectors), and also be sure to save the notification of receipt of the letter (it will be returned to you later, when the collectors receive the letter). These documents will help you protect yourself in the event of a dispute with debt collectors over unpaid debt.
A similar letter can be sent to your bank; they may be able to provide you with a copy of the assignment agreement.
2) If the collectors responded to your letter.
After receiving a response from the collectors, you can contact a qualified lawyer with all the documents. You have the right to challenge the assignment of claims in court if it was made in violation of the terms of your contract. As a result of the trial, the assignment is recognized as legal (in which case you will need to pay collectors) or illegal (in which case you will remain a debtor to the bank).
3) If the collectors have not responded to your letter.
In this case, we recommend not paying the debt to collectors, since they have not proven to you that the rights of claim have been assigned. If the collectors go to court with a claim to collect from you the amount of debt under the loan agreement, you will be able to object to the accrual of penalties (including asking for a reduction in the amount of the penalty under Article 333 of the Civil Code of the Russian Federation), dispute the amount of the debt (if it is defined incorrectly, includes illegal commissions, etc.).
Nobody craves meetings with debt collectors, but sometimes it cannot be avoided. And the financial situation in the country is not always to blame. Sometimes we ourselves let the situation go, and then we begin to worry when problems begin to grow at the speed of a snowball. In this article we will look at a typical situation where a bank sold a debt to collectors: what to do in this case? We will rely on the articles of the Civil Code of the Russian Federation and on Law No. 230-FZ of July 3, 2016 “On the protection of the rights and legitimate interests of individuals when carrying out activities to repay overdue debts...”.
Who's knocking on my door?
Let's start with the fact that the interaction of banks or other credit organizations with collection agencies can occur in two ways: under an assignment agreement or agency agreement. The latter implies that it only provides the bank with a paid service of collecting overdue debt from the debtor, receiving a reward as a percentage of the amount of the collected debt. The agency here plays the role of an intermediary, and has the right to demand payment of the debt to the bank details (i.e. to the accounts that were originally specified in the bank’s loan agreement with the borrower). You can find out more about the nuances of the agency agreement in.
Is it legal to sell debt to debt collectors?
How legal is it to transfer the rights to claim a debt to a collector (new creditor)? Let us turn to paragraph 2 of Article 382 of the Civil Code of the Russian Federation, which tells us that in order to transfer the rights of a creditor to another person, the consent of the debtor is not required, unless otherwise provided by law or agreement.
If the agreement provided for a prohibition of assignment (that is, the debtor was asked to express his consent to this), and the borrower did not give his consent to transfer to another person the rights to claim the loan debt, then this does not mean at all that you, having violated your obligations, are not you will communicate with the new creditor - the collector.
Let's look at the same article.
If the contract provided for a prohibition of assignment, the assignment transaction may be declared invalid at the request of the debtor only if it is proven that the other party to the transaction knew or should have known about the specified prohibition.
Are you ready to enter into a legal battle with your old and new creditors (they are also called:) to invalidate the transaction? Do you have time and money for a lawyer? Then go ahead.
Yes, by the way, in the same article there is also a sentence that the prohibition provided in the contract for transferring the rights of the creditor to another person does not prevent the sale of such rights in the manner established by the legislation on enforcement proceedings and the legislation on insolvency ().
And most importantly, the law gives the borrower the right not to pay existing obligations until you have been provided with evidence of the transfer of rights to another creditor. So don’t rush to part with your money by paying it to someone unknown. There is a possibility of falling into the unclean hands of scammers. We will touch on these nuances again a little further.
How do you know that the bank sold the debt to collectors?
Believe me, you will know about it almost immediately. After all, collectors will not wait for a special invitation and will start calling and writing as soon as they acquire the appropriate rights (after all, this is their bread). And the first thing that can happen is that you will receive a letter demanding to repay the debt. Only the sender will no longer be a bank, but some kind of collection agency for collecting debts from individuals. Along the way, it doesn’t hurt to find out what status the collector is in: a new creditor or an agent (see the beginning of the article).
The second option is an unexpected call from a collection agency with the same demands. Here it is important not to get confused and quickly find out who is calling and writing to you and on what basis. If they are not going to talk to you about such details, then there is no point in having a conversation with you.
Often the bank itself notifies borrowers about the transfer of the right of claim to a new lender. In this case, you will receive a registered letter with the appropriate notification. Moreover, the former creditor (assignor) not only can, but is obliged to do this by virtue of the law. No notification - no evidence that the assignment took place. This means that the debtor has the right to pay overdue debts using the same details, i.e. to bank accounts. And if any confusion arises and money goes for other purposes, it will no longer be your problem.
Another option is unexpected account closure. After a 2-3 month “rest” you come to the bank to repay the debt, but they don’t accept your money. It turns out that the loan account is closed and depositing money into it is simply impossible. But this situation does not always indicate the sale of debt. Perhaps the bank itself sued you and closed the account before a court decision was made.
What to do? What should the borrower do in this situation?
The first sensations that everyone experiences are confusion and fear of meeting a formidable debt collector. After all, we have heard a lot about their methods, sometimes not the most legal and often immoral. And the first questions we are trying to answer are: do I owe the bank, and who should I pay now?
Let’s say right away that nothing criminal happened to your debts. The amount of the principal debt (its body) remains the same, interest, fines and penalties are accrued in the same amount. At least, they should be calculated exactly as before. The debtor is defended by Article 384 of the Civil Code of the Russian Federation, which tells us that the scope of the right transferred from the original creditor to the new creditor remains unchanged! If a collection agency decides to charge a little extra for their efforts, this is illegal and such payments may not be paid at all.
As soon as a collector starts bothering you with a demand to pay something, the first thing you need to do is clarify which agency is bothering you, on what basis they are doing this, and what phone numbers you can use to contact them to clarify the details. Believe me, the collectors definitely do not expect such a reaction from you, and therefore at least they will begin to communicate at the proper level, without unnecessary threats and insults.
Let's say you have all the addresses and telephone numbers, but no one has presented you with official documents on the assignment of debt under the assignment agreement. That is, the original creditor (bank, microfinance organization, etc.) did not send the debtor a registered letter notification of the assignment of rights and did not attach a copy of the assignment agreement (or an extract from it). This only means that the provision of Article 382 of the Civil Code of the Russian Federation on the need to inform the debtor in writing is not fulfilled. Accordingly, the debtor can completely legally refuse to comply with the demands of the new creditor - this right is given to him by Article 385 of the Civil Code of the Russian Federation. So, any call from a collector can begin with a demand to provide documentary evidence of the assignment of the right of claim, if you do not already have it!
In this case, you can not resist, but take a counter step and request the necessary information from the bank in writing (in the form of a scanned copy). It is advisable to send a notification letter so that you have proof of receipt. By the way, you can also request this document from a collection agency; after all, they have their own copy, and making a copy and certifying it is not so difficult.
Important! Do not pay anything to debt collectors until they prove to you that their right to demand the debt is legal. And if the “debt sale” transaction is declared illegal, any payments must be withheld until a court decision!
While you are waiting for a response to your message, you need not to waste time and collect the maximum possible package of documents, which must include:
- your copy of the loan agreement;
- related agreements (guarantees, pledges, etc.);
- cash deposit receipts;
- restructuring agreement, if any.
If there is no at least one payment receipt, request from the bank a printout of the movements on the loan account for the entire period of validity of the loan agreement. It will show how much and when you contributed, as well as what amount was written off to pay off the debt.
In addition, it is necessary to request a certificate from the banking institution about the status of the loan debt at the time of concluding the assignment agreement. Such a certificate must decipher the amounts:
- principal debt;
- interest accrued on the loan;
- accrued penalties and fines.
This way you will find out how much they can legally demand from you and assess whether the collectors’ demands are fair.
If they did send you a copy of the assignment agreement, and you have verified the legality of the assignment transaction, you can transfer the amounts due to the accounts of collectors. You just need to be careful and not pay too much - only what you really owe under the agreement with the original creditor.
Did any clauses of the debt assignment agreement seem illegal to you?
You can consult with knowledgeable lawyers (on the Internet you can find out any information on the relevant legal sites, and there they will actually give you a qualified answer) and, as a last resort, file a lawsuit. If the assignment agreement is recognized as illegal, the bank will again become the creditor, and you will get rid of communication with collectors. But the truth is, you won’t get rid of debt.
What to do if no one is in a hurry to send you copies of contracts, but at the same time calls and letters do not stop coming? You have the right not to pay anything during this entire time or to pay into bank accounts using the details from the agreement known to you, since the fact that the assignment took place has not been proven to you.
There is one more nuance in favor of the debtor. After 3 years from the date of concluding the assignment agreement (if you are sure that it is illegal), you will have the right to file a claim to write off the amount of debt due to expiration. Not entirely fair, of course, if you specifically didn’t want to pay. But on the other hand, who stopped the collectors from proving to you the legitimacy of the claims and “shaking” money from you on a legal basis? By the way, the statute of limitations is a very illusory opportunity, and you are unlikely to be able to turn it in your favor. Usually the creditors win the courts, not the debtors who violated their obligations...
The debtor may quite reasonably have a question, and we have discussed the Plan of Possible Actions in the article at the link provided, and this information will undoubtedly complement our article well.
Let us remind you once again that each situation is individual. But still, try not to bring the problem to the point where a meeting with creditors becomes inevitable. And if this does happen, study the current legislation and part with money only according to proven and legal requirements. Let us add that a collection agency is no longer such a terrible beast, because its rights are severely limited by Law No. 230-FZ of July 3, 2016 (we have already referred to it in the article), and it is forced to interact with the debtor in accordance with the law. And if his employees exceed their authority, then you should know. We wish you good luck in your difficult situation and a speedy release from debt shackles!
Every borrower must understand that all loan agreements contain a condition under which banks are allowed to “transfer debt” to third parties, i.e. collectors.
The Civil Code of the Russian Federation enshrines such a rule of law as “assignment of the right of claim.” Thus, the bank can transfer its right to anyone, and the borrower’s consent to the bank is not at all necessary. Most often, banks sell consumer loans to collectors without collateral or guarantee, with a debt amount of no more than 300,000 rubles, debt on microloans and credit cards.
When a bank assigns a debt to a collector, the rights under the borrower’s obligation are transferred to a third party to the same extent and on the same conditions, which in turn allows the debtor to exercise his rights, despite the change of creditor.
In this situation, the debtor has the right to demand from its original and new creditors the relevant documents, namely, an agreement on the assignment of the right of claim (cession). In the absence of such an agreement, the debtor has the right not to fulfill the obligation to the new creditor, except if notification of the transfer of rights is received from the original creditor. Please note that in specific situations the borrower must be extremely prudent and all correspondence received in the mailbox or by email should not be regarded as a guide to action. The debtor must be properly notified that there has been a change of persons in the obligation, or the debtor should contact the original creditor and obtain a copy of the assignment agreement.
So, you have received a copy of the assignment agreement and there is no longer any doubt that you have a new creditor.
We study the assignment agreement and pay attention to the clauses that indicate for what period of time and to what extent the right to claim the debt is transferred to the new creditor.
In addition, on the basis of Article 386 of the Civil Code of the Russian Federation, the debtor has the right to raise against the claim of the new creditor the objections that he had against the original creditor.
Head of the branch in Mikhailovka Anastasia Kalmykova
Federal Law No. 230-FZ dated 03.07.2016 provides that interaction with the debtor aimed at returning overdue debt has the right to be carried out only by the creditor, a new creditor, when the rights of claim are transferred to him, and a person acting on behalf and in the interests of the creditor, only in if it is a credit institution or a person engaged in the collection of overdue debts as the main activity included in the state register. In this case, the debtor has the right to refuse to interact with the creditor and (or) a person acting on his behalf and (or) in his interests (Article 8 of this Federal Law). This provision will be applicable from January 1, 2017.
However, in war all means are good, as they say, but debt still remains debt. In this case, if it is impossible to pay the entire amount of the debt, the new creditor must send an application demanding that the existing debt be restructured, and in case of refusal, it must go to court. At the same time, a change of persons in an obligation does not deprive the debtor of the right, given his difficult financial situation, having exhausted all other possibilities, to apply to the Arbitration Court to declare the citizen bankrupt.
