What is Bondora’s 4-step Collection & Recovery Process?
While we do everything we can to ensure all borrowers will make their repayments, they may, unfortunately, fall behind with their monthly commitments from time to time. This can be for many reasons, like losing their job or a significant change in their circumstances.
When this happens, we have a precise 4-step collection and recovery process where the bottom line is to secure the maximum amount of cash possible owed to an investor. We aim to reach step 4 as soon as possible because the Bailiff has the right to freeze the debtor’s assets and accounts to cover the payments owed.
Below, we break it down for you step by step:
Step 1: Internal Collections
Bondora contacts the customer as soon as a payment is missed, long before the loan is officially defaulted, using email, SMS, post, or phone to offer support, explore repayment options, and help them stay on track.
This early intervention is critical: in up to 97% of cases, Bondora helps customers avoid immediate default, which increases the chance of long-term recovery outcomes.
Step 2: Debt Collection Agency (DCA)
If the loan reaches 90 days overdue and the contract is terminated, it moves into default. At this stage, Bondora transfers the case to a trusted Debt Collection Agency.
This reputable third-party partner then reestablishes contact with the customer, using local expertise and market presence to encourage repayment.
The goal remains to resolve the situation through open communication and a realistic, manageable payment plan.
Step 3: Court
If other resolution attempts don’t succeed, Bondora may proceed with court filings as a last resort, always considering the borrower’s rights and the legal framework in each country.
The timeline varies by country, but on average, a court decision is reached in 2–6 months.
Step 4: Bailiff
Once a court ruling is received, Bondora hands the case over to a local bailiff. They operate within strict legal guidelines and help manage repayments in a structured, regulated way that considers the borrower’s income and personal circumstances.
Recovery efforts focus on the customer’s available income and assets, always respecting legal guidelines and protections.
How does this process vary by country?
While the four main stages apply across all markets, each country’s legal system influences how the recovery process unfolds. Here’s a closer look:
🇪🇪 Estonia
Once a loan defaults, cases are quickly taken to court. Most recoveries are then handled by bailiffs, who operate under a structured legal framework. Thanks to the efficiency and authority of the bailiff system, over 80% of recoveries in Estonia happen at this stage.
🇫🇮 Finland
Cases move swiftly through the recovery process. Loans are sent to a DCA a few days after default. To maintain momentum in the recovery process, cases typically move forward within a few weeks if no agreement is reached, though Bondora always aims to resolve issues amicably first. This fast pace helps keep recovery active and efficient.
🇱🇻 Latvia
After default, loans are first handled by DCAs. If no resolution is found, the case goes to court (typically within two months) and then on to enforcement if necessary. While newer, the Latvian process is aligning with those in other mature markets.
🇳🇱 Netherlands
Most cases are currently managed by DCAs. Over 70% of defaulted loans are under active DCA management. At the same time, Bondora is refining its strategy to move more cases into legal recovery as systems mature.