Extrajudicial Collection: 5 fundamental benefits you need to know today

by Sara B. Writer | Blogger | Content Creator

The extrajudicial collection is a way to recover the amount of delinquent customers amicably. This is even a way of trying to avoid the judicial procedures that are so long and tiring for everyone involved.

In a scenario where more than 60 million people are in debt or with arrears in their accounts, the default rate of the Brazilian people has reached record levels.

Given this, many companies find themselves in the difficult situation of having to charge their customers. For the procedure to be as agile and friendly as possible, extrajudicial collection is usually used. It is less complex, although it formalizes the debt collection lawsuit settlement agreement safely for both parties.

This type of collection is gaining more and more strength since the release of the new Civil Procedure Code. Whether small or even medium and large companies, many are already enjoying this model to solve their portfolio of defaulters. 

In today's post, the 4 main benefits of joining the extrajudicial collection method will be presented.

Benefits of extrajudicial collection that you should take advantage of

First, if you are still unsure about what extrajudicial collection is, read our article what is Judicial and Extrajudicial Collection? Understand the differences and when they can be applied. Today we’re just going to focus on the benefits, okay? So come on.

a) Speed ​​in credit recovery

As everyone knows, a court case can take a long time to complete. In cases of default, depending on the origin of the debt, the process can be up to 4 years only in the first instance. In certain situations, when there is no contract, for example, this period can double in size.

 

In addition, if we stop to think about all the possibilities of appeals, other instances and which courts will be involved, we start to consider the duration of the process on the scale of decades. Discouraging, isn't it?

On the other hand, when the procedures are carried out via amicable collection, the agreement can be signed in a matter of hours. Of course, payment terms can vary, but the important thing is that the first step, negotiation, is much more agile. 

b) Savings on legal expenses

Opting for extrajudicial collection also results in less expenses. There is no need for a lawyer, which implies a reduction in the payment of fees. For these and others, this modality becomes more economical.

Its viability is also a determining factor, especially in cases of smaller debts or in those involving small and medium-sized companies. Otherwise, the costs for filing the lawsuit may be greater than the return that the pending payment will result. And that doesn't make any sense.

c) Less wear and more assertiveness

The implications of a judicial process, whether for the time, money or friction generated, are practically eliminated with extrajudicial collection. Credit recovery takes place in a peaceful way and with greater chances of assertiveness.

Especially because the legislation encourages a good relationship with the customer, which is supported by the Consumer Protection Code. So, in order to avoid wear and tear while leveraging the success of the negotiation, friendly collection is the best way. 

d) Improvement in customer relationship practices

Not every debtor is indebted to the places where he does his shopping due to a bad character. In the political and economic context of Brazil today, several people are forced to choose the most important accounts to settle first. Thus, the remaining accounts are left for later negotiation.

When we choose the non-judicial route, the business relationship between the company and the client tends to be maintained. This relationship is complicated to win and retain in such a competitive market. 

The individual who must, upon realizing that he is being respected and that there is a willingness on the part of the creditor to make payment more flexible, may return to buy more often in the near future. The relationship between the two is not usually compromised.

Sponsor Ads

• Ad Space Available - Rent it Now!

Created on Feb 22nd 2021 01:17. Viewed 78 times.

Comments