Taking out a loan despite debt collection is a double-edged project.
It depends on the personal and financial situation of the person concerned whether an attempt to get a loan despite the initiation of a collection procedure makes any sense at all.
The involvement of a debt collection company by a creditor can have different reasons on the part of the debtor.
The debtor may not have paid a claim due to carelessness in good time or believes that the claim will be made without justification.
Temporary payment difficulties are possible, for example caused by an unforeseen financial burden, but can be remedied in the short term.
In many cases, unfortunately, a completely different reason plays a role. The debtor is no longer solvent or insolvency is imminent.
If anything, the financial means are only enough to settle some outstanding bills, and usually the debtor will pay the bills that he considers the most important.
If that’s the situation you’re in, it’s too late to borrow. You will probably no longer find a bank that is ready to lend.
Apart from that, an additional loan is dangerous and only leads to the debt trap.
And that applies even if it should somehow be possible to get a loan somewhere, perhaps through the involvement of third parties.
The debt collection claim may be settled with the loan, but the interest burden again creates debts.
If receivables can no longer be settled in the foreseeable future due to financial bottlenecks, and if liquidity cannot be improved, debt advice centers are not the right point of contact, but credit banks are.
In other cases, trying to get a loan to consolidate debt is not easy, but it is not doomed to failure.
The crucial point is when you decide to tackle the problem of the open claim consistently.
The goal should always be to prevent a Credit bureau entry due to the open claim.
- 1 Early action increases credit opportunities
- 2 The child fell into the well: credit despite debt collection
- 3 reminders from the debt collection agency: How do I behave?
Early action increases credit opportunities
A collection procedure does not fall from the sky.
This was preceded by the non-payment of a due invoice.
The creditor will take this as an opportunity to issue a warning himself or to use a debt collection agency to do this work for him.
If a temporary liquidity problem, without over-indebtedness or the concrete risk of over-indebtedness, is the reason for the non-payment, it is advisable to contact the creditor before any delay occurs.
Creditors often engage in deferrals or installments if the debtor conclusively shows that the claim can ultimately be paid in this way.
It is not too late to contact the creditor or the debt collection agency commissioned by the creditor, even during the dunning procedure.
Collection agencies in particular regularly engage in payment agreements.
At this point in time, it is also easiest to borrow to pay off the debt or to summarize the loan.
The collection procedure may have already started, but a Credit bureau entry may only be made after an unsuccessful second reminder.
Legal proceedings have not yet taken place and seizure measures are therefore not yet available.
If the debtor has reasoned objections to the demand, a different approach is recommended.
It does not matter whether the creditor issues a warning himself or leaves the reminder to the debt collection agency.
In these cases, it is important to seek legal advice in good time.
Under no circumstances should debtors themselves justify why they consider the claim to be unjustified and engage in discussions with the creditor about it.
To avoid mistakes, you should leave the reasoning to a specialist.
However, it is possible to first contradict the demanded request simply in writing by registered letter and then seek legal advice in peace.
A Credit bureau entry of contested claims may not be made.
The legal counsel consulted will examine the matter and either recommend that a legal dispute should be settled or, if necessary, recognize and settle the claim after the conclusion of a payment agreement.
If a loan is required to settle the claim, the collection procedure does not matter when borrowing.
Credit banks receive no indication that a debt collection agency has been engaged.
The child fell into the well: credit despite debt collection
If the debt is collected by a debt collection company in some way, the debt collection is somehow visible to credit banks, borrowing is considerably more difficult but not entirely excluded.
The basic requirement, however, is sufficient income, which guarantees the repayment of the loan from free income after deducting the garnishment-free amount and the flat-rate for living expenses.
A further requirement is additional collateral that can be made available to the bank.
Security stocks, capital life insurance, savings contracts of all kinds and real estate are suitable as security.
If sufficient collateral is available, sometimes going to the house bank or to a branch bank can be successful.
An alternative is Creditolo’s mortgage loan.
The loan is not a dedicated real estate loan, but an all-purpose loan secured by a mortgage.
According to Creditolo, negative Credit bureau entries or loans canceled and due by a bank do not fundamentally conflict with the mortgage loan.
The settlement of collection claims is expressly mentioned as a possible purpose.
In this respect, the mortgage loan from Creditolo can be an option to get a loan despite Credit bureau and debt collection.
A prerequisite is of course a resilient real estate and sufficient income.
Creditolo is an experienced financial service provider who works without prepayment.
Every now and then one reads the advice to try a loan with a direct bank, which does not provide bank statements of the past months or weeks, despite visible collection procedures.
Or it is advised to choose a bank where only bank statements need to be submitted for a few weeks.
The prerequisite here, of course, is that the bank statements to be submitted no longer contain references to collection of claims by debt collection companies.
How banks handle the issue of bank statements can be found in the product descriptions of the usual loan comparisons.
Banks behave very differently. Sometimes the bank statements of the last few months have to be presented, other banks only need bank statements of the last weeks.
At some banks, there is no statement at all about submitting bank statements. These banks may decide on a case-by-case basis whether they need bank statements for credit checks.
However, if there is already a relevant Credit bureau entry, this option is excluded from the outset.
Reminder letter from the debt collection agency: How do I behave?
A warning from a debt collection agency is no reason to be disturbed.
Sometimes the content of the letters is, to say the least, relatively rude. Don’t let that intimidate you.
Collection companies are initially unable to implement threats with Credit bureau, with garnishment or imprisonment.
In the letter you will find a list of the main claim, any ancillary claims such as interest and fees from previous reminders and the costs incurred through the use of the debt collection agency.
If you consider the main claim to be unfounded, you object to the enforcement by registered mail.
If the claim is justified, it must be paid. However, the claimed reminder costs are sometimes set too high.
Also check whether the collection agency is serious. Does it have judicial approval? Registration in the legal services register must result from the letter of formal notice.
There are different forms of collection.
The debt collection agency may have been authorized by the creditor to assert the claim.
In this case, the creditor is the holder of the claim. The collection agency must submit a power of attorney.
It is also possible that the collection agency has acquired the claim from the original creditor and that the assertion is in its own name.
In such a case, the deed of assignment must be attached to the letter.
When you hear about the claim for the first time in the collection company’s letter, there is every reason to believe that a fraudster is trying to take advantage of it.
Obtaining legal advice from a consumer advice center or a lawyer always makes sense when a letter from a debt collection company flaps into the house.
Loan difficult despite collection, but possible in exceptional cases