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Thursday, 02 February 2017 10:24

I received a letter from a vulture fund: What do I do?

After a hard day of work, Manolo arrives home; Check your mail, and find a letter from a company with a complicated name. He explains that, as a result of a contract, his lifelong bank has sold his debt to another company. And they give you a deadline to pay.

What does this letter mean?

Manolo has received a notice of assignment of debt; That is, your creditor (the bank that gave you a loan) informs you that you have sold your credit right (that is, the right of the bank to claim the debt) to a third party (usually a company dedicated to this type of business , Sometimes called - according to its characteristics - vulture funds) - the name is quite descriptive of its activity, principles and objectives).

That is to say, as of that date, Manolo no longer has a debt with his bank of all life, but with a company that normally is domiciled in a tax haven and whose activity is only and exclusively to claim debts and to collect them (that is to say, Is dedicated to make of vulture).

Is it legal?

Yes. Any person can assign their right to credit (ie, the right to collect a debt) to a third party. The debtor can not comment or oppose such assignment.

Can the debtor do anything?

There is in some cases a possibility called the right of withdrawal. The right of withdrawal - which can be used under certain conditions - allows the debtor to pay off the debt if he pays the buyer of the debt (ie the vulture fund) the price at which he purchased the debt.

In numbers, and to be able to explain them more simply, this means: Manolo owed 1,000 Euros to Bank A, although Manolo never agreed that he owed that money. Bank A sold its credit right to Fondo Buitre for 10 Euros. If Manolo exercises his right of withdrawal and pays 10 Euros to the Vulture Fund, he will not owe anything to the Vulture Fund or to Bank A (ie, paying 10 Euros, he will have canceled the debt of 1,000 Euros).

Do not hesitate to consult whenever you receive a letter of assignment of the right of credit to a lawyer, but do it quickly; There are only nine days (yes, 9 days) to exercise the right of withdrawal. Your lawyer will inform you if you can apply the right of withdrawal and how to do it in each specific case.

What if I do not exercise (because I do not want to or because I do not) the right of withdrawal?

If the right of withdrawal is not exercised, we must pay the debt to the buyer of the debt (the vulture fund). However, if Manolo is harassed by the vulture fund (a situation that unfortunately happens sometimes) he must denounce this situation to obtain the protection of the courts and tribunals of our country.

Writings SF Lawyers