Debt recovery methods aim to create pressure to reach a payment agreement. When the debtor continues to default, the debt is transferred to an external legal firm. In these cases, creditors, including banking institutions, can take various actions to recover the owed assets.
Generally, there are two mechanisms for debt recovery: judicial and extrajudicial. When a lawsuit is initiated, precautionary measures are commonly requested to secure the outcome of the trial, which may lead to seizures of assets or freezing of bank accounts. This allows the creditor institution to collect the owed amount in the event of an unfavorable ruling.
According to Burad, upon entering the judicial phase, the debtor must hire legal representation, which involves additional costs and considerable loss of time. In cases of seizure, the State may authorize creditors to collect from the debtor's assets. The external firm files a lawsuit before a jurisdictional body, and after the trial, a ruling is issued that obliges the debtor to fulfill the corresponding debt, turning the process into a judicial one.
The consequences of reaching this stage go beyond a mark on the credit history. During an account freeze, funds may continue to be received but cannot be used until the trial is resolved and the debt is paid. These restrictions remain in effect during the judicial process and until its conclusion, although accounts are unfrozen between 15 and 20 days after the trial resolution and debt payment.
It is advisable to initiate negotiations with the financial institution or creditor when in a complicated financial situation. This process can be conducted with those in charge of extrajudicial collections, who have direct contact with the affected party, making it easier than involving lawyers.
Extrajudicial debt recovery is carried out through collection agencies, which utilize constant phone calls, home visits, and other strategies to encourage payment. At all times, it is advisable to seek advice from qualified and experienced individuals in these matters. Managing debts is part of everyday life for many people.
