Everything you need to know about debt collection and successful debt repayment

How does debt collection work?
Debt collection is the process applied when a financial obligation has not been fulfilled within the agreed timeframe. Although the term often causes discomfort, in practice it usually involves informing the debtor, establishing contact, and seeking solutions to resolve the debt. Debt collection is a regulated procedure governed by various laws such as the Obligations act, Consumer credit act, Credit institutions act, Enforcement act, Civil procedure act, Consumer protection act, data protection regulations, and other related legislation.

What is the role of a debt collection agency?
A debt collection agency takes over overdue obligations and contacts debtors to inform them about their outstanding debt and available repayment options. The agency’s operations are regulated by the Act on the manner, conditions and procedure for the servicing and sale of claims. It is registered in the Register of authorized credit servicing providers and supervised by the Croatian National Bank (HNB).
The agency’s role throughout the process is to provide information, maintain communication, and assist in finding solutions whenever possible. The standard business practice is to resolve financial obligations in a fair and transparent manner.

How does the collection process start?
In most cases, the process begins out of court, typically by sending a written notice or making a phone call. The purpose of this initial step is to inform the debtor about the obligation, verify information, and open the door for dialogue.

Many cases are resolved quickly and easily at this stage. A large number of debtors settle their obligations immediately, often because the debt stems from a forgotten invoice, missed payment, or a misunderstanding that can be easily clarified.

Agreements as a common solution

Some debtors choose to contact the agency to find a solution that better suits their current situation. During the conversation, the debtor’s circumstances are reviewed, and when possible, a repayment agreement is made to settle the debt within a reasonable timeframe.

Such agreements allow for gradual repayment with clearly defined terms and a repayment plan. This approach helps many people resolve their debt without additional stress and with better control over their obligations.

What does acting in accordance with the law mean?
Acting in accordance with the law means conducting the entire process under the applicable regulations of the Republic of Croatia and the European Union. This includes respecting the rights of all parties, protecting personal data, ensuring clear communication, and using legally permitted procedures. Debt collection is regulated by the Obligations act, Consumer credit act, Credit institutions act, Enforcement act, Civil procedure act, Consumer protection act, data protection laws, and other relevant legislation.

The work of debt collection agencies is governed by the Act on the manner, conditions and procedure for the servicing and sale of claims. Agencies are registered as authorized credit servicing providers and are supervised by the Croatian National Bank. If the obligation cannot be resolved through agreement or voluntary payments, further steps are taken exclusively within the framework of legally prescribed enforcement procedures.

Why is communication important?

Open and timely communication often simplifies the entire process. Asking questions and clarifying uncertainties allows for a better understanding of the situation and available options. The purpose of communication is to inform and try to find solutions.     
Debt collection is not a personal measure but a regulated and lawful process aimed at resolving financial obligations fairly and transparently. The debt collection agency’s role is to provide information, facilitate communication, and assist in finding solutions whenever possible.