Acquiring credit, renting a house or taking out a loan are situations that require a lot of care, they are situations that involve money and if we do not meet the installments it could lead us to legal problems.
In Colombia there are two mechanisms that creditors may use to enforce payment by debtors: pre-legal collection and legal collection.
Pre-legal collection are all the actions taken by the creditor or the person who made available (such as a lawyer), to convince the debtor to pay the debt, these processes can be phone calls, emails, or deals between both parties to achieve the payment of the debt.
This process is also known as extraprocedural or persuasive collection, and this tool seeks to resolve the debt without the need for the intervention of judges.
If pre-judicial collection processes are carried out, but the debt was not solved, a legal collection can be presented, this collection is already in the hands of judges of the republic, where they carry out the collection actions: here there can be seizures of the debtor’s assets, and freezing of their bank accounts and salaries.
This process aggravates the debt by up to 50% as it also requires the payment of all costs for administrative expenses, current interest charges, late payment interest charges and attorney’s fees.
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Is the collection fee rate regulated?
So far, there is no regulation on fee rates; generally, it is the companies that impose a percentage based on the amount owed.
When are fees not paid by the debtor?
Only during a pre-judicial collection process in entities that offer housing loans, those fees according to the law, will be covered by the entity, if a legal collection process is reached, the fees will be charged to the debtor. For other loans, the debtor pays the fees according to the company’s internal policies.
What can I do to get out of a legal collection?
The best thing you can do is not to hide, this can aggravate the situation; talk to the banks or the person with whom you have the debt, in order to reach an agreement.
These legal collection processes are long and tedious, it is very important to try to make this agreement so that the lender drafts a letter to the courts to terminate the legal collection.