In particular, people who are running a debt collection process often need a loan – if only to pay the outstanding bills. At first glance, many people find it difficult to obtain a loan. After all, the potential lender knew immediately that in the past they had not been able to service financial claims. It is by no means impossible to obtain a loan despite the collection procedure – you just need to know what arguments and guarantees you need to put in the field. This text would like to help you with this.
Credit despite debt collection procedure: debt collection is not bankruptcy
But let’s start with the question of what a debt collection procedure actually is, since it is often wrongly equated with an insolvency procedure. In the latter, you indicate your general insolvency and apply for protection from creditors, the first is that you have not paid an invoice.
An extreme example: You buy a mug set for 10 dollars in an online shop, but you don’t pay for it. The online retailer is now transferring its claim against you to a debt collection company that wants to collect the money from you. A collection procedure has been opened. However, the amount in dispute is so small that it has no influence on whether you get a loan or not.
However, something else is happening now: if you cannot pay bills, this raises considerable doubts about your credit repayment ability – and this is exactly the point you have to deal with. You must provide the bank (or other lender) with evidence of your sufficiently high credit rating.
Incidentally, a debt collection procedure does not necessarily lead to a negative entry in the protection association for general credit protection (Credit Bureau). Credit Bureau is only informed of a problem by its partners – and only very late. For example, two warnings do not cause any problems with the protection community.
Credit despite debt collection: How to prove your creditworthiness
The easiest proof of creditworthiness is regular income receipts. Expect that the bank will also ask you for a very detailed breakdown of your income and expenses. In the end, you have to withhold a monthly excess of your earnings that is very easily enough to pay the loan installments.
In addition, the bank will want to make sure that the collection process is a one-time problem: In addition, it will also request the bank statements of all of your accounts from the past six to twelve months to verify that there were no chargebacks from your bank details.
You should also expect your last three to six salary statements, your employment contract and, in extreme cases, your tax returns from the past two years to be requested.
Credit despite debt collection
Now it is not unlikely that you will have problems with the appropriate proof of creditworthiness and / or be self-employed. In such cases, only a guarantee can help you. It goes without saying that the guarantor (s) should have a credit repayment capacity that is beyond any doubt.