Cash flow to businesses, companies and governments is also the main thrust of their lives. Overdue and irregular accounts quickly turn into distressed or bad debts and express one of the most important constraints that the company loses its focus on its core business. In a study conducted by the American Society of Collectors (ACA) shows that the risk of collecting 90 days’ arrears is up to 72%, but after six months the likelihood of collecting falls to 56% and continues to fall to 28% if one year has elapsed since the debt maturity.
Debt collection is known as:
Financial collection is the process of pursuing payments of debts owed by individuals or companies. An organization specializing in debt collection is known as a collecting agency or debt collector. It is the debt collection agencies or companies that purchase the debt from the creditor and strive to recover the debt in their own way or policy.
Most collection agencies act as creditors’ agents and collect debt for a fee or percentage of the total amount owed.
Methods of debt collection are either amicable methods and reconciliation called amicable settlement, or legal and judicial methods called judicial settlement.
Amicable settlement: a contract between the debtor in discontinuance of payment and its creditors, which involves the waiver of a portion of the debt or the granting of deadlines for the debtor’s performance or both.
Judicial settlement is a procedure aimed at ending and resolving the parties’ dispute by resorting to a judiciary.
Funds that cannot be withheld to collect debts:
1/The debtor’s home or legitimate dependents.
2/Means of transport and legitimate dependents of the debtor.
3/Half of the total salary in alimony cases.
4/What the debtor needs to pursue a profession or trade itself.
5/Gross salary for other debts.
6/Debtor’s personal supplies.
When does the bank or finance company have the right to withdraw the car terminated by ownership upon default to collect the debt?
The original company is not entitled to withdraw the car on the basis of the circulars whatever the reason and whatever the period of the defaulted payment. However, there is one case where the company is entitled to withdraw the car, namely, if a judgement has been handed down and the enforcement court has issued its decision to withdraw the vehicle and the withdrawal from the execution court is by companies supervised by the court, and the finance company has no income in the withdrawal-car.
When is the bank entitled to sell the mortgaged property to collect the debt?
As stipulated in article XVIII of the Mortgage Scheme (the mortgage is entitled to sell the encumbered property if the debt is settled and not performed by the debtor).
In case of death)
In accordance with the provisions of the collection controls and procedures, the financing contracts concluded from 1/10/2018 are exempt from the outstanding instalments in two cases: Death or total disability, not later than 30 days from the date of receipt of the relevant documents by the financier. In this case, the financier is obliged to return all amounts collected from the date of the death or total incapacity. The heirs must notify the financier and bring a full cause-of-death report until pardon.
Debt collection procedures for financiers:
In the event of a failure to pay the debts, the financier is entitled to take regular action before the judicial authorities. But before commencing the proceedings, the customer must be notified of this when they have failed to pay through email, registered mail, national address, text messages or telephone calls for instalments payable for three consecutive months; or five months apart during the period of financing, and when a court ruling is issued against the struggling client, the financier must abide by the decision rendered unless otherwise agreed by the parties, such as preparing a schedule of indebtedness, When implementing the decision, the financier must take into account the customer’s distressed circumstances and commit itself to providing the option of rescheduling indebtedness with the possibility of changing the time without additional fees.
At Abdul Ellah Al Humaidi office, We provide Debt Collection Service by communicating :
Number: 0504328584 Or e-mail: Info@lah.sa