Blog » DEBT COLLECTION IN HUNGARY -3 REASONS TO HIRE A LAW FIRM INSTEAD OF COLLECTION AGENCIES
DEBT COLLECTION IN HUNGARY -3 REASONS TO HIRE A LAW FIRM INSTEAD OF COLLECTION AGENCIES
24 July 2019
One of the annoying things in business is when your invoices are not paid by your business partners. After getting bored of their excuses, there comes a time when you have to put pressure on your debtor. At that point, you either entrust a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. Are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why hire rather a law firm in Hungary instead collection agencies.
1. Agencies cannot represent you in legal procedures
The main problem with such agencies is that they cannot represent you in legal procedures, thus their service has minimal added value.
Basically, they can do the same as you: sending a notice letter. If we consider Hungarian legal procedures, you will need a legal representative in all cases. In liquidations, or litigations with higher value legal representation is compulsory by law. In the rest of the cases, legal expertise and technical background is also needed, so in the end, the case will definitely land on a lawyer’s desk. With this in mind, let’s jump to the next point.
2.Why would you need an unnecessary middleman?
As said, it is very likely that a debt collection agency will hand over your case to a lawyer after an unsuccessful notice letter. If so, why would you insert a middleman who takes a cut from the fee without adding any value? Shouldn’t you rather invest the share of the agency in professional legal services?
Not to mention, that it is much more favourable for you if you can communicate with the same person throughout the procedure, who understands your case from the beginning.
3.Legal expertise throughout the process
If the recovery of the debt is important for you, why would you wait months until the agency hands over your case to a lawyer to start the legal work? In fact, your case should be assessed by a lawyer at the beginning, so you can make your decision based on the advice of a legal expert, not based on frivolous promises such as “our agency has 90% recovery rate”.
Finally, we would like to recall an instructive story from our experience: a person entrusted an agency to recover a debt. Although the agency managed to recover a part, but it came with a price: the agency concluded an agreement containing that “the creditor waives all future claims and considers the accounts settled”.
When the person later started litigation against the debtor on the same grounds, unluckily for him, his claim was dismissed because of the unfavourable agreement the collection agency concluded on his behalf. We don't think any law firm would waive your rights just to close the case as soon as possible.
In conclusion, you should carefully consider choosing an agency, because once legal work is needed, the case will be taken over by a lawyer anyway. If so, we think it is better investing the agency’s fee in professional services from the beginning and having your case handled by a legal expert during the entire process.
ONLINE CONSUMER CONTRACTS – IS YOUR BUSINESS CONCERNED?
Black Friday is once again around us: the time when online shops and the consumer protection authority cash in some extra income every year. We guess you’ve already read about the extreme discounts and the record-breaking fines by the authorities, so in our article, we will explain, that without your knowledge, your own business can easily step into the field of consumer protection, in which case, your contracts are subject to special rules. In our article, we show you how you can recognize these situations and, of course, summarize the obligations.Read more »
HOW TO TRANSFER PERSONAL DATA TO NON-EEA COUNTRIES? - NEW EDPB RECOMMENDATION
Since in the middle of summer 2020, the Court of Justice of the EU (CJEU) invalidated the Privacy Shield and put into question the applicability of the standard contractual clauses, we were wating for guidance from the European Data Protection Board (EDPR) how to transfer personal data to non-EEA countries in a GDPR-compliant way. Finally, the EDPB broke the silence and provided a 6-step guide which we summarize in this short article.Read more »
THE SUPREME COURT RULED – FLEXIBLE WORKING TIME CAN ONLY BE ORDERED IN WRITING IN HUNGARY
It is often the case that the employer does not clearly regulate the employment relationship of the employees, which later leads to an employment lawsuit. This happened in the case before the Hungarian Supreme Court, where a legal dispute arose in connection with the employee's work schedule, the stake is the payment of several million forints of overtime work compensation to the employee. In our short article, we analyze the Supreme Court’s decision and draw conclusions on how the employer can avoid similar situations.Read more »