In the world of debt collection, there are two main approaches to obtaining payment of a claimed debt: extrajudicial debt collection and judicial debt collection. Understanding the differences between these two methods is critical to choosing the strategy that best suits your credit needs.

Extrajudicial debt collection

Extrajudicial debt collection consists of all those actions aimed at recovering the debt claimed, without resorting to the intervention of a Judge. This method is generally the first attempt used by debt collection agencies (and others) to resolve the situation quickly, amicably and economically.

Advantages of Extrajudicial Debt Collection

  • Faster turnaround time: By not requiring court intervention, debt recovery time can be significantly shorter.
  • Reduced costs: By avoiding legal fees, out-of-court recovery is less expensive than the judicial route.
  • Maintaining business relations: A less formal and more conciliatory approach can help preserve the relationship with the debtor.

Tools and Techniques

  • Solicitation letters: Payment reminders, formal communications sent to the debtor to remind him of his obligation to pay within the agreed terms.
  • Recovery phone calls: Direct phone contacts to discuss payment arrangements and timing.
  • Mediation: Attempt to reach an agreement between creditor and debtor through direct negotiations or mediation by a third party.

Judicial Debt Collection

When out-of-court debt collection does not yield the desired results, judicial debt collection, or the initiation of legal proceedings to obtain payment of the debt through the court system, can be used.

It is worth recalling how it is always and in any case advisable not to proceed with judicial debt collection blindly, without having first requested debt collection information aimed at determining whether or not the debtor is solvent, as well as insolvent. In this way, you will avoid unnecessary expenses in all cases where the debtor should be null and void.

Advantages of Judicial Debt Collection

  • Enforceable force: Judgments issued by the court have legal force and can be enforced.
  • Possibility of garnishment: If successful, the debtor’s assets can be attached to satisfy the claim asserted.
  • Legal clarity: A court judgment clearly and definitively defines the creditor’s rights.

Procedure and Costs

  • Preliminary stage: Collection of necessary documentation and legal analysis of the situation.
  • Filing of appeal: Initiation of the case by filing the appeal with the appropriate court.
  • Hearing and Judgment: Discussion of the case before the judge and issuance of the judgment.

When to Use One or the Other Method?

The choice between extrajudicial and judicial recovery depends on several factors:

  • Size of debt: For small debts, extrajudicial recovery may be preferable due to lower costs.
  • Willingness of the debtor: If the debtor shows some openness to negotiation, the out-of-court method can be effective.
  • Urgency: In situations that require quick resolution, extrajudicial recovery is usually faster.
  • Relationship status: If you want to maintain a good relationship with the debtor, it is advisable to first attempt out-of-court recovery, the so-called win-win solution.

Both extrajudicial and judicial debt collection have their strengths and are suitable for different contexts. Carefully assessing the specific situation and characteristics of the debtor is essential to choosing the most effective strategy. Investigative agencies specializing in debt collection information can provide advice and assistance in navigating these complex and delicate situations, ensuring a professional and focused approach.

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