„Debt collection as a management strategy for non-performing loans„ investigates key aspects of the banking sector related to credit risk management and collection of non-performing loans. The introduction emphasizes the importance of the topic in modern banking, where banks are exposed to numerous challenges and risks. The first part analyzes the definition and role of banks in the modern banking environment. Given the rapid changes in the financial system, banks play a crucial role in the business world, and their strategy and approach to credit risk management become crucial for maintaining the stability and competitiveness of banks. Furthermore, the work shows risks that banks face when granting loans to clients. Special attention is paid to non performing loans as a potential danger to the bank financial stability. Approaches to managing non-performing loans are analyzed and strategies and procedures used by banks to identify, assess and manage credit risk are studied. This includes analyzing the credit approval process, monitoring the loan portfolio and developing strategies to minimize risk. The most significant part of the work is devoted to the process of collecting non-performing loans. Through examples of real situations and strategies applied by banks in practice, it is investigated how efficient collection of receivables affects the financial stability of banks and reduces the risk of non-performing loans. Through all the mentioned parts, the purpose of this paper is to offer an insight to a deeper understanding and analysis of the key aspects of managing non-performing loans in the banking system. Through a theoretical framework and practical examples, the paper explores strategies and approaches that help banks reduce credit risk and preserve financial stability.