What consequences of debt must consumers expect if they are permanently insolvent?
Everyone has experienced this situation before: they forget to pay an invoice and some time later a reminder flutters into the house. This is not a big deal if you settle your bill in a timely manner. In the worst case you have to pay a small reminder fee. In trouble a debtor gets only when he can not always meet its financial obligations.
If he can no longer pay due claims, he is deemed insolvent . If the debtor’s assets do not cover the existing liabilities, then the debtor is even considered to be over-indebted . At least now it’s time to act so as not to end up in a vicious circle and not push the debt further up.
Creditors have various options to enforce their claims . These are sometimes very expensive. And most of the time, these costs are borne by the debtor, whose indebtedness continues to rise.
Collection agency incurs debt? Cost-intensive consequences threaten!
Particularly notorious and feared are debt collection companies, which instead of the creditor collect the debts . Often the writing of such an office indicates that the debt is already too high . Also in this case, a professional debt counseling is urgently recommended to avert the associated consequences of debt.
A particular danger lies in the high costs that the activity of a debt collection agency causes . The debtor’s incoming payments do not immediately cancel the outstanding claim. These are charged first with the collection fees and the interest and only then with the actual claim .
Judicial consequences of debt: dunning and enforcement proceedings
If the debtor does not comply with payment dates , the creditor can assert his claims in a judicial dunning procedure and obtain a dunning notice . Even if the debtor ignores written requests for payment , the creditor can choose this route.
For this reason, it is very risky to leave mail and reminders unopened . In the worst case, you do not learn that such a case is being brought against them and you miss the deadline to act against it.
The debtor can z. B. object to the order for payment . If he does not do so, the creditor has free reign to obtain an enforcement order and thus an enforceable title . With this he can initiate seizure measures, z. B. a salary or account stocking . Previously, the debtor may be required to provide asset information if the bailiff accepts a request from the creditor.
Use a debt counseling service to avoid further consequences of debt
Indebted people can take advantage of a wide variety of help offers . Firstly, the state or public debt counseling offers free help, which unfortunately often involves long waiting times .
On the other hand, deprived persons can use an advisory assistance certificate from the competent district court to appoint a lawyer . This offers professional support and often bankruptcy advice if necessary.
Overview of the most important consequences of debt
- Reminders of the creditor cause dunning fees .
- When debt is high, creditors often hire a collection agency .
- If the debtor does not pay in time and causes damage as a result, he must also compensate for this delay damage.
- A negative entry with the Schufa further reduces the own creditworthiness.
- If you fail to meet your payment obligations or a corresponding request from the creditor, the latter can enforce a dunning notice against you in a judicial dunning procedure .
- If the debtor does not object to the order for payment , the creditor can obtain an enforcement order in the next step.