Every entrepreneur has happened or will cooperate with a contractor who does not pay on time. The issue of debt enforcement can be dealt with in a classic way, i.e. with a bailiff. On the other hand, the debt exchange is a faster option to recover money. What is the online debt exchange?
Learn a quick way to recover money from an unreliable contractor. What is the debt exchange and is it profitable?
What is the debt exchange?
The online debt exchange is a special platform (register) on which the creditor can place an offer of sale of his debt, and private persons or companies interested in purchasing such debt can buy it back from the creditor.
The legal basis for the operation of the debt exchange is the provisions (Article 509 et seq. Of the Civil Code), which allow the transfer of a claim to a third party by means of assignment (assignment). Under the law, the debtor does not have to agree to transfer the claim.
However, he should be informed about it so that he knows who he must pay the debt to. The assignment cannot be made if the parties to the commitment expressly state this in the contract. If your debtor is an entrepreneur and you would like to sell the debt on the debt exchange, you do not need to have a final court judgment or order for payment.
It is enough to prove that you owe your debt. You can prove this with e.g. an invoice, a work contract, a mandate contract, a loan contract, an order for payment, a court order, a lease contract or promissory note.
Who uses the online debt exchange?
The debt exchange brings together several groups of entities. The first of them are creditors issuing ads about the desire to sell debts. They are both natural persons as well as entrepreneurs and legal persons. On the other side of the transaction, the most frequent debt collectors are debt collection companies that professionally deal with debt collection.
Other entrepreneurs also use debt exchange. Imagine that you are an entrepreneur who, running a business, concludes numerous service contracts with other entities.
Perhaps browsing the list of debtors placed on the debt exchange, you found your current contractor there, which you were about to pay for the service rendered. You can now buy his debt from the debt exchange and pay him for the service not with money but with the purchased debt. It will be a so-called deduction.
The debt exchange is also an excellent information base on future contractors with whom you would like to cooperate – you can easily check if they are financially fit. These registers are used by, among other banks and lessors to evaluate the reliability of natural and legal persons who are potential customers.
Why is it sometimes worth selling debt?
An increasing number of creditors are deciding to sell their debt claims. Why? The answer is simple: because of time and money.
The debt sale price achieved on the debt exchange is usually lower than its nominal value. In return, the creditor receives the money properly, without waiting for the dubious finale of the usually lengthy enforcement proceedings conducted by the bailiff.
Quick recovery of even the frozen part in the form of cash debt will certainly help you maintain financial liquidity, and at the same time will save many stress-related to contact with the debtor. Individually attempted debt recovery is very engaging.
How high the buyer offers for your debt depends on several factors. The most important of these is the probability of the debtor’s solvency. The buyer will also check whether the debt is undisputed, whether there are other creditors who have already begun enforcement, whether the debtor has recognized the debt in writing and for how long the debt is due, and hence whether it is time-barred.
What other benefits does the online debt market have?
In addition to the basic function of presenting offers and communicating with the buyer the debt with the buyer, the debt exchange has one more important function. Some debtors are motivated by the fact that their data, as a debtor, will be made public on the debt exchange.
It happens that earlier requests for payment are ineffective, and the effect is only achieved by informing about the intention to publish the debtor’s data on the Internet and issue the debt for sale. This is due to the fact that debtors want the information adversely affecting their image not to appear at all or to disappear as soon as possible.