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Debt Collection Services in Croatia

When a company is having financial problems, its providers are the most affected because unpaid claims start to accumulate. In most cases the provider cannot pay its suppliers because of this situation, becoming indebted in his return. A company that cannot make the payments as agreed by an established contract in this sense may be requested to pay its debts through official notifications and letters. This process is time and money consuming which is why the creditors prefer to hire a debt collection agency formed usually by attorneys who will use the law regulations in order to settle these cases. Our team of lawyers in Croatia is at your disposal with legal support when commencing the debt collection procedure.

What is the Croatian Debt Collection Agency?

The authorized professional association of debt collection agencies in Croatia is called the Croatian Debt Collection Agency Association, situated in Zagreb, member of the Federation of European National Collection Associations (FENCA). The main FENCA regulations are that the collection agencies must follow the laws of the country where the activity is conducted and the European rules on data protection. Also, it must make sure that all the agencies subscribed have a license to perform such activities and that the confidentiality of the parties involved in the process is assured.

What is the meaning of debt?

Companies or individuals who face financial struggles and cannot make payments to creditors are subject to debts. In most cases, when a credit is made, a contract is signed in this sense which comprises complete information about the debtors and the creditors, plus the payment obligations as agreed by both parts.

How is the amicable procedure of collecting debts in Croatia?

Instead of lawsuits and related procedures, debt collectors will commence the amicable procedure of recovering the money. The following steps are part of the debt collection process in Croatia:

• the process starts with a notification sent to the debtors in Croatia;
• a phone call from the debt collection agency is then made;
• both parts will constantly communicate, in order to settle a new date for money recovery;
• if all the terms are accepted, the creditors and the debtors can sign a new contract in this sense.
It is good to know that the notification stipulates the debts, the way of paying them and a deadline for doing it. In case the creditors agree, additional agreements for paying the debts in installments might be signed.

How a debt collection agency start the recovery procedure?

The process of debt collection by an agency starts by sending an official notification to the debtor. Also, delayed payments are possible if the parties agree on this. This process is part of the extrajudicial phase. The collection agency must collaborate closely with the creditor and must check what assets the debtor has. In case no settlement is concluded, the Croatian attorneys of the collection agency may file a petition to the court and collect this way the debts. This is called judicial procedure, but it’s not so often used since the debtors are choosing to pay the debts before getting to court.

Type of debts in Croatia

Debts in Croatia are usually connected to leasing payments, bank loans, utility bills or other financial commitments which are not respected in time. We remind that our Croatian lawyers can help you recover the money for your company, in compliance with the legislation in this sense.

The advantages of using a debt collection agency

There are many advantages in using the services of a specialized agency in Croatia, such as the acceptable costs of process, the fact that the client is updated periodically regarding the process, the employees of the claimant are not involved in the process, the tracking of the debtor, an estimation of collection dates, legal advice that is appropriate in the faced situations. Usually, most agencies in Croatia are based on the system no-win no-fee: if the claims are not settled in a satisfactory time frame, the agencies don’t receive any fee. The payment consists of a percentage of the collected sum, instead of a fixed sum. This is another advantage of hiring a debt collection agency in Croatia.

If you need more details about the debt collection procedure in Croatia, you may contact our law firm in Croatia.