Debt Collection Procedure

DEBT COLLECTION PROCEDURE

This Debt Collection Procedure forms part of the Terms and Conditions for Use of the Crowdfunding Platform of Crowdfunding Service Provider (Crowdestor OÜ (a company registered in the Republic of Estonia with registry code 14388462, located at Roosikrantsi tn 2, Tallinn city, Harju county, 10119, Estonia)). Capitalized terms used in this Debt Collection Procedure, have the same meaning as defined in the Terms and Conditions for Use of the Crowdfunding Platform.

DESCRIPTION OF THE PROCEDURE

If the Borrower is late with any of the scheduled monthly payment the Crowdfunding Service Provider shall initiate a debt collection procedure as described below. By concluding the Loan Agreement with the Investor and a cooperation agreement with the Crowdfunding Service Provider, the Borrower is informed about this procedure, communication channels and the fact that Investors will be timely informed about payment delays and will decide how to proceed with overdue Loan payments.

The Borrower is notified about upcoming payment two days before the scheduled payment day and on the payment day itself. If the Borrower delays any payment, the Crowdfunding Service Provider`s debt collection officer will initiate the extrajudicial debt recovery process. The debt collection officer will send reminder text messages and e-mail messages to the Borrower about the term and amount of overdue payment.

If the Borrower delays payment for 35 days, the debt collection officer will formally request the Borrower to explain the reason for delinquency in a written form (either as a letter or e-mail message). Based on this explanation, verification of the circumstances, and meetings with the Borrower (if such are deemed necessary by the Crowdfunding Service Provider), Crowdfunding Service Provider will make a decision (or suggest to Investors) on further debt recovery strategy.

If the Borrower still delays payment for 50 days, the debt collection officer shall send the Borrower a notice of debt submission to the extrajudicial debt recovery company or a notice that the agreement will be terminated.

After 60 days of delay, the Crowdfunding Service Provider will send information to the public debt databases. This is done to include the Borrower’s data in the debt databases (this will considerably affect credit score and creditworthiness of the Borrower).

If the Borrower delays payment for 91 days, the debt collection officer will send a notice on agreement termination (alternatively the Crowdfunding Service provider will suggest to Investors to terminate their Loan Agreements). The Borrower will have a ten-day term to repay the debt voluntarily. If the debt is still due on 91st delinquency day, the Crowdfunding Service Provider will unilaterally terminate the agreement and will make a decision on collecting the collateral, submitting a claim to the court, filing an insolvency application against the Borrower or use any other legal means available to the Crowdfunding Service Provider and its affiliated companies to collect the debt.

In parallel to any collection activities undertaken, Crowdfunding Service Provider daily monitors status of the Borrowers. Depending on any changes in the Borrower’s structure, legal status, or ability to repay the owed amount, Crowdfunding Service Provider will immediately react to these changes and adopt appropriate steps to ensure effective collection of the owed amount.

At any moment during the debt recovery process and in response to any developments during the process, Crowdfunding Service Provider may make a decision to proceed with any of the following scenarios:

  • Restructuring.
  • Prolongation of the payment term.
  • Selling the debt (most likely to a collection agency).

Irrespective of the scenarios and collection steps mentioned below, Crowdfunding Service Provider has rights to undertake any collection activities required for recovery of the owed amounts, including, but not limited to physical inspections of the Borrower’s property and other on-site debt collection activities, informing third party service providers (for example, debt collection agencies and credit rating agencies) about the owed amounts, and raising claims in the court to the extent allowed by the applicable law.

THE PROCEDURE

Delinquency Days

Action

Throughout the whole debt collection process

Monitoring of the Borrower’s status and considering possibility to restructure the Loan, prolong the payment term of the overdue amount, or to sell the debt.

2 Days before payment Day

SMS reminder

Payment day

SMS + email reminder

Delinquency Days: 3

SMS + email reminder

Delinquency Days: 7

SMS + email reminder

Delinquency Days: 14

SMS + email reminder, phone call

Delinquency Days: 21

SMS + email reminder, phone call, request to Project owner for situation explanation in a written form in a 10 day term. Analyze the situation as soon as explanation is received.

Delinquency Days: 30

SMS + email reminder, phone call

Delinquency Days: 35

Crowdfunding Service Provider will analyze the explanation and develop a debt recovery strategy.

Delinquency Days: 40

Email reminder, phone call

Delinquency Days: 50

SMS + email reminder, phone call, warning letter about following scenarios:

First scenario:

Debt submission to extrajudicial debt recovery company.

Second scenario:

Warning letter, that agreement will be terminated.

Delinquency Days: 60

SMS+ phone call with an information, that papers have been prepared to submit them to extrajudicial debt recovery company (debt collection agency) or that a claim will be raised in the court. The Borrower is informed about publication of debt information in the credit information databases.

Delinquency Days: 90

First scenario:

Unilateral termination of the agreement. If the Borrower does not repay the debt, on the 91st delinquency day, a claim about debt recovery will be raised to the court.

Second scenario:

Unilateral termination of the agreement. If the Borrower does not repay the debt, on the 91st delinquency day, the debt is submitted to an extrajudicial debt recovery company.