Many people wonder what exactly is the difference between a collection agency and the bailiff. TV programs such as "The bailiffs: pay or empty" can cause confusion. In addition, many people also have no idea what happens the moment a collection agency or bailiffs are called in. So what are the actual differences? How do both parties operate and what powers do they actually have?
What is and does a collection agency do?
A collection agency tries to collect outstanding debts from the debtor on behalf of a client. Many collection agencies contact debtors both by telephone and in writing.
Before a collection agency can be called in, the debtor must be sent a written formal notice (or WIK letter in the case of a consumer). This is because in this formal notice you announce that collection costs will be charged if the debtor defaults.
In the case of companies/organizations, sending a WIK letter is not mandatory. You can, of course, send the letter as a reminder when your customer has let the agreed payment period expire.
Read more about the WIK and collection costs here.
Powers of a debt-collection agency
A collection agency has no legal status or legal authority, which means it may only engage in collection work in the amicable stage. A collection agency attempts to collect the outstanding invoice and thereby avoid going to court (and associated costs).
A collection agency is not allowed to foreclose on its own and always needs a judgment and bailiff to do so. However, collection agencies are allowed to conduct court proceedings and issue summonses. The bailiff is then called in to issue a summons.
What is and what does a bailiff do?
A bailiff is a civil servant who collects debts from debtors by order of a creditor. The bailiff is sworn in by the court and is therefore the only authorized person in the Netherlands who may and can actually collect debts, for example by means of seizure.
Bailiff's powers
The bailiff has the status and authority to carry out the entire collection process.
A bailiff's office engages in the same out-of-court collection activities as a collection agency, but can and may also apply in the foreclosure process all measures made available to it by law, such as:
- Serving judgments;
- Making garnishments, for example wage garnishments;
- Evicting homes.
In what else do collection agencies and bailiffs differ?
1. Access to government records.
An important difference between a bailiff's office and a collection agency is that employees of a bailiff's office, because of their public duty, have access to government registers. For example, registers of the UWV (Uitvoeringsinstituut Werknemersverzekeringen), the RDW (Rijksdienst voor het Wegverkeer), the GBA (Gemeentelijke Basis Administratie) and the Beslagregister. Employees of a collection agency do not have access to these legal registers.
2. Legal complaint regulation
Despite the fact that debt collection agencies must comply with the complaint scheme according to the NVI guidelines, bailiffs are subject to so-called 'disciplinary law'. If, for example, the debtor is of the opinion that collection costs have been wrongly charged and disagrees with the procedure, the debtor can take disciplinary action against the bailiff. This results in the bailiff having to answer to the disciplinary chamber.
In a nutshell
A collection agency tries to collect overdue payments without the intervention of the (cantonal) court. Unlike a bailiff, a collection agency has no enforcement powers at its disposal. A bailiff does have these powers and can be assigned tasks such as levying attachments and serving judgments.
