What is the Debt Collection Process?
The Debt Collection process stands for recovering the unpaid amount by the customers of BFIs, NBFCs, and MFIs. In the financial sector, the transaction takes place between borrowers and the lender. The borrower is a person or persons who take a loan for personal or business needs. Sometimes the borrower may delay the payment due to some personal issues or may be due to the intention of absconding with the loan amount. So, BFIs use to take services from an agency or agencies to recover the unpaid amount, called the debt collection agency. According to the law, debt collection can be done with a legal and ethical process. Initially, the internal staff of the banks or financial institutes try to recover the payment. Still, once it is confirmed that they are unable to recover it, then BFIs take the help of some external agencies called third-party debt collectors. The whole recovery process overhanded to them. The professionals of third-party collection agencies try to recover the loan or debt or payment until it is received. Still, suppose they also failed to do so. In that case, they there will be legal proceedings by banks according to the law of India in which to recover the loan, the bank has right to freeze the bank accounts, seize the property if any, and also sometimes they auction the belongings such property, the personal vehicle by adhering to the laws to recover the payment or debt.
- 28AKOLv 52 months ago
That's only the case when you have federal debt, state debt, or owe the bank. They'll repossess your car, boat or whatever it was they financed for you. Your bank account isn't going to be frozen unless you in some type of illegal stuff and owe the bank which your money in. More than likely a lien would be put against your properties and at times taking to pay what u owe. Physician, credit card, utility bills, or hospital type stuff gets sent to collection and some will sue u to get money u owe
- Anonymous2 months ago
I've had some experience in collections way back when. I have no earthly idea what BFIs, NBFCs, and MFIs are.