Voluntary Debt Collection

Voluntary debt collection includes collection of debts without the involvement of public authorities. In practice, voluntary debt collection includes the use of all methods, which are lawful and in accordance with good business practice, and which can be used to apply pressure on the debtor to pay the outstanding amounts. These methods include, for example, collection by telephone and by letter.

Debt collection agencies are often used to achieve greater efficiency. Debtors are aware that debt collection agencies have specific procedures for collecting debts from debtors. Therefore, collection is quicker and more efficient. Bad debts, i.e. debts which after a number of collection attempts still remain unpaid, may be sold to specialized debt collection agencies.

A method of collection of debts from corporate customers that is occasionally used for outstanding business payments is an unaccepted bill of exchange or “tratta”, i.e. a demand for payment subject to threat of publication. This means that a written demand for payment is sent by post to a debtor that has not disputed the debt, stating that a failure to pay the debt may result in the unaccepted bill of exchange becoming “protested”, i.e. notification to credit information agencies and possible publication of the failure.