Help, a debt collection letter!

When someone, for whatever reason, does not pay their bills, the owed party will ultimately take steps to collect the debt. In The Netherlands, usually, the creditor would first send a payment reminder followed by reminders to the debtor. When the debtor still does not pay, the collection of the debt is transferred to a third party. Often this is a collection agency. 

Are you or do you know someone who has received a debt collection letter? Then, it is important to know what the consequences could be. Aeslupa helps people with solving their debt issues. In this article, we will explain what you should know and do when you are dealing with creditors.

Prevent collection 

The best way to deal with outstanding payment is, of course, to pay these before a collection agency is approached by the creditor. This prevents worries and expenses: the use of a collection agency costs money, and the debtor will have to pay these expenses on top of the original invoice. These costs can be significant and in addition to the collection costs you may also have to pay interest on the outstanding payment. When you receive a reminder, it is important to pay within the payment period (usually 14 days). Only when the payment period has expired, the creditor may approach a collection agency. A reminder, therefore, is a last chance to prevent collection costs. Unfortunately, it is not always possible to pay in time, in that case you will receive a debt collection letter. 

What should you do when you receive a debt collection letter?

1. Is the collection justified?

When you, or someone you know, receives a debt collection letter, it is important to check first whether the collection is justified. Has the payment not been fulfilled? Have you really ordered the described items or services? It is possible that the collection letter and your payment intersected, or that your payment has not been processed correctly by the creditor. Make sure to immediately notify the collection agency about this. The best way to do this is by calling them and following that up with an email. Include a print screen of the payment. Usually this will solve the issue.
However, malicious ‘debt collection agencies’ try to scare people with fake and often threatening collection letters. Do not be fooled by these and always check whether the collection letter is legitimate. When you google the characteristics of the letter you can quickly determine whether it is a scam or not. 

2. Are the extra expenses correct? 

When the collection letter is indeed correct regarding an unpaid debt, you can check whether the collection expenses and interest are not higher than the legally set maximum rate (see table below). Do you want to know exactly what the maximum collection expenses and interest are for the unpaid debt? The Dutch organization Consuwijzer has developed an online tool* with which you can calculate your collection expenses and interest. 

Source: Consumentenbond.nl

3.     Fulfill payment?

When the unpaid amount, collection expenses and the interest are all correct, and you have the means to pay, it is advisable to pay the collection as soon as possible. This way, you can prevent any further steps (see below). When you do not have enough money to pay, make sure to contact the collection agency as soon as possible. Explain that it is not possible for you to pay (all) the expenses. You can then make arrangements to pay in feasible payment periods. You can also send a letter with a payment proposition. You can find example letters that you can adapt and use here (In Dutch). 

Pay attention: Even when you do not see a way out, it is always important to take action when you receive a collection letter. The collection agency will listen to you. You can also contact a professional that can support you with problematic debts. Aeslupa can offer help when you are stuck. Ignoring a debt collection letter only makes matters worse. 

Ignoring a debt collection letter

When you ignore a collection letter, the creditor will approach a bailiff. A bailiff, unlike a debt collector, does have a legal status. This means that he can seize your belongings and income. Then, in addition to your collection expenses, there will also be other expenses for you. The expenses, problems and worries can be significant when a bailiff is knocking at your door. 

It is important to realize -when facing a bailiff- that he or she will want to come to a reasonable and feasible solution as much as you do. It is also important to know that there are legal arrangements in The Netherlands to protect debtors. For example, when a bailiff seizes your possessions or income, you are still entitled to a subsistence minimum, so you can pay for your livelihood; the seizure-free basis. 

Additionally, there are various instances and experts to help people with problematic debt. People with debts can, for example, be entitled to debt restructuring, or they can be appointed or request a legal administrator to (temporarily) help control the financial (debt) administration and reduce the accompanying stress. Aeslupa is at your service to think with you toward solutions that help lighten the load of your debt issues. 

Questions 

Please do not hesitate to ask questions, especially when it comes to financial worries. Do not wait and contact Aeslupa to ask your questions or share your concerns. 

Would you like to know more?

The Nibud will help you to manage your debt yourself on this website. Also, the websites consuwijzer.nl and consumentenbond.nl (both in Dutch) will give you advice when dealing with a collection agency. Aeslupa wrote several articles about people facing financial worries to help inform them about possible solutions. You can read more about the seizure-free basis here and the how, who and what of material guardianship and more information for people who know someone with financial problems. 

With budget management, advice and legal administration, Aeslupa helps people with their finances and financial affairs. Aeslupa takes away financial worries in a human way where necessary and supports independence where possible.

*Need help with navigating Dutch websites? Contact us!