While every step is taken to ensure all borrowers will make their repayments, from time to time they may unfortunately fall behind with their monthly commitments. This can be for a number of reasons, like losing their job or a significant change in their personal circumstances.
When this happens, we have a clear 3-step collection and recovery process where the bottom line is to secure the maximum amount of cash possible that is owed to an investor. We aim to reach step 3 as soon as possible, because the bailiff has the rights to freeze the debtor’s assets and accounts to cover the payments owed.
Below, we break it down for you step by step:
Please note that all timelines referenced below can vary significantly between different borrowers, country and amount of debt outstanding and should only be used as estimates.
Regular reminders and information passed to debt registries.
Throughout this stage, the borrower receives reminders through email, text, postal letters and automated calls requesting they take immediate action. Meanwhile, we pass their information on to debt registries who also try to make contact with the borrower.
Details passed to court, case automatically filed via payment order or civil claim.
When more than 74 days have passed with no payment received and if the amount overdue is larger than 2 monthly payments, then the loan is classed as in default*. Most commonly the case is filed via a payment order, however, if this is unsuccessful then we will file a civil case. In the best case scenario, the process takes a minimum of 4 months until a verdict is reached.
*If the overdue amount is less than 2 monthly payments, the loan is classed as in default after the payment schedule ends.
The Bailiff aims to retrieve payments owed from the borrower’s income and assets.
The case is handed over to a local bailiff after the court makes a favorable decision and the subsequent speed of recovery depends on the income and assets of the borrower. Bondora receives a quarterly update on the status of the collection.