THE BILL AGAINST THE DEBT INDUSTRY ACTUALLY CALLS FOR DEBT COLLECTION

Many politicians are happy to use the expression “debt industry” (see for example our article on the bill amending the law of 20 December 2002 on amicable collection of consumer debts, in order to fight abuses). After all, it is popular to oppose the debt collection industry, thus profile oneself as a poverty fighter. Likewise, the multiplication of (recycled) bills is good for the statistics of the politician in question. However, many bills do not actually protect people living in poverty and only shift the problem instead of tackling the roots. Too many legislative proposals are not rooted in the reality nor tested in practice. They are in fact not useful.

 

Compulsory court conciliation notice to combat the debt industry

 

On 09/16/2019, John Crombez and Melissa Depraetere presented the “Bill to amend the Judicial Code with regard to the obligation to summon in preliminary conciliation in order to fight against the debt industry”. I quote: “This law proposal makes an attempt at prior conciliation compulsory in the event of the recovery of monetary debts and thus aims to fight against the debt industry.” It’s a whole program in one sentence! And that should spark some controversy because, like other ideas, this one will most likely reappear in a new form in a new bill.

 

Concretely, this bill wishes to extend the compulsory conciliation procedure, which already exists in certain cases (eg: farm lease), to rent arrears, public services, hospital fees and school fees.

 

Since when do bailiffs and judges actually act out of court?

 

Do you remember how Hilde Crevits wanted to “protect” the debtors of school invoices by transferring the amicable collection procedure to MyTrustO, an association of bailiffs? Quite surprising when one knows that this company, subsidized by the State, taxes the debtor through an opening file fee of not less than 150 euros … and where the same service is also available free of charge from other public instances? In her proposal, Ms. Crevits forgot that the amicable debt recovery, by companies like TCM, does not entail any costs for a defaulting debtor.  Besides, serious reservations should be made on the possibility for bailiffs to practice amicable recovery.

 

John Crombez also surprisingly ignores that debt collection companies do essentially work out of court. In fact, 99% of our debts are managed out of court. In any case, the two politicians are proposing “solutions” via bailiffs and courts.  This is exactly what the recovery sector avoids for the parties involved and what creditors and debtors favour.

 

Brussels, the palace of justice

 

 

Call for amicable intervention

The idea that it is better to start with amicable (out of courts) attempts first is not new. It is precisely the role and success of the collection agency: to generate cost-effective solutions for all parties to a payment default issue.

The bill says:

The advantages of conciliation are as follows:

  • the creditor does not need to advance a payment for legal costs;

  • the debtor does not incur additional legal costs: the net amount is transferred in full to the creditor;

  • the trust relationship (between tenant, client, subscriber, patient, parent, etc.) remains intact thanks to the mutual respect expressed.

Mr. Crombez seems to have been directly inspired by a debt collections’ sales manager! His proposal lists the benefits enjoyed by both creditors and debtors when a debt collection company is at work.

 

But, then I quote:

Unfortunately, we see voluntary conciliation being disused. In order to block the debt industry, it is recommended, in the recovery of several types of monetary debts, to compel the plaintiff to summon the defendant in conciliation.

 

Are you still with us? Because there was a short circuit: do we read that, according to Mr Crombez, calling on a collection agency would not be an amicable attempt. So, a judge should get involved in the case! If the answer is ‘yes’, then we are back to the justice track when time actually is saved, and courts actually are uncluttered every day thanks to hundreds of genuine amicable debt collection procedures.

 

If this proposal became law is that this path labelled “amicably”, the novelty would be a loss of time and money. The creditor would be obliged to summon the debtor “amicably” but in court (a contradiction). However, the debtor would not be required to appear in that court. Where the amicable summons is nowadays already compulsory, many debtors’ absences are noted in practice. The result of this method is therefore often a waste of time.

 

Conclusion

 

Mr Crombez retired from politics a few weeks ago, but that will obviously not prevent other politicians from recycling this proposal in another form. It is easy to transfer the responsibility from the government to the creditors. The time may have come to shut down the “debt collection law proposal industry”. Why not spend some time crafting bills that really tackle debt, poverty, and their roots.

 

Questions?  Contact us!

THE BILL AGAINST THE DEBT INDUSTRY ACTUALLY CALLS FOR DEBT COLLECTION

Many politicians are happy to use the expression “debt industry” (see for example our article on the bill amending the law of 20 December 2002 on amicable collection of consumer debts, in order to fight abuses). After all, it is popular to oppose the debt collection industry, thus profile oneself as a poverty fighter. Likewise, the multiplication of (recycled) bills is good for the statistics of the politician in question. However, many bills do not actually protect people living in poverty and only shift the problem instead of tackling the roots. Too many legislative proposals are not rooted in the reality nor tested in practice. They are in fact not useful.

 

Compulsory court conciliation notice to combat the debt industry

 

On 09/16/2019, John Crombez and Melissa Depraetere presented the “Bill to amend the Judicial Code with regard to the obligation to summon in preliminary conciliation in order to fight against the debt industry”. I quote: “This law proposal makes an attempt at prior conciliation compulsory in the event of the recovery of monetary debts and thus aims to fight against the debt industry.” It’s a whole program in one sentence! And that should spark some controversy because, like other ideas, this one will most likely reappear in a new form in a new bill.

 

Concretely, this bill wishes to extend the compulsory conciliation procedure, which already exists in certain cases (eg: farm lease), to rent arrears, public services, hospital fees and school fees.

 

Since when do bailiffs and judges actually act out of court?

 

Do you remember how Hilde Crevits wanted to “protect” the debtors of school invoices by transferring the amicable collection procedure to MyTrustO, an association of bailiffs? Quite surprising when one knows that this company, subsidized by the State, taxes the debtor through an opening file fee of not less than 150 euros … and where the same service is also available free of charge from other public instances? In her proposal, Ms. Crevits forgot that the amicable debt recovery, by companies like TCM, does not entail any costs for a defaulting debtor.  Besides, serious reservations should be made on the possibility for bailiffs to practice amicable recovery.

 

John Crombez also surprisingly ignores that debt collection companies do essentially work out of court. In fact, 99% of our debts are managed out of court. In any case, the two politicians are proposing “solutions” via bailiffs and courts.  This is exactly what the recovery sector avoids for the parties involved and what creditors and debtors favour.

 

Brussels, the palace of justice

 

 

Call for amicable intervention

The idea that it is better to start with amicable (out of courts) attempts first is not new. It is precisely the role and success of the collection agency: to generate cost-effective solutions for all parties to a payment default issue.

The bill says:

The advantages of conciliation are as follows:

  • the creditor does not need to advance a payment for legal costs;

  • the debtor does not incur additional legal costs: the net amount is transferred in full to the creditor;

  • the trust relationship (between tenant, client, subscriber, patient, parent, etc.) remains intact thanks to the mutual respect expressed.

Mr. Crombez seems to have been directly inspired by a debt collections’ sales manager! His proposal lists the benefits enjoyed by both creditors and debtors when a debt collection company is at work.

 

But, then I quote:

Unfortunately, we see voluntary conciliation being disused. In order to block the debt industry, it is recommended, in the recovery of several types of monetary debts, to compel the plaintiff to summon the defendant in conciliation.

 

Are you still with us? Because there was a short circuit: do we read that, according to Mr Crombez, calling on a collection agency would not be an amicable attempt. So, a judge should get involved in the case! If the answer is ‘yes’, then we are back to the justice track when time actually is saved, and courts actually are uncluttered every day thanks to hundreds of genuine amicable debt collection procedures.

 

If this proposal became law is that this path labelled “amicably”, the novelty would be a loss of time and money. The creditor would be obliged to summon the debtor “amicably” but in court (a contradiction). However, the debtor would not be required to appear in that court. Where the amicable summons is nowadays already compulsory, many debtors’ absences are noted in practice. The result of this method is therefore often a waste of time.

 

Conclusion

 

Mr Crombez retired from politics a few weeks ago, but that will obviously not prevent other politicians from recycling this proposal in another form. It is easy to transfer the responsibility from the government to the creditors. The time may have come to shut down the “debt collection law proposal industry”. Why not spend some time crafting bills that really tackle debt, poverty, and their roots.

 

Questions?  Contact us!

Don’t wait another second – collect your money

Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.

Don’t wait another second – collect your money

Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.