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General Premises

General premises in Sweden

Information about the swedish premises will come soon

Debt Collection in Sweden

Swedish Debt Collection

In Norway the collection of overdue pecuniary claims is regulated by the Debt Collection Act of 13th May 1988. The Act defines its scope as the collection of overdue pecuniary claims. Legal assistance in the case of disputed pecuniary claims is not regarded as collection. The Act also yields to provisions in or pursuant to other special legislation.

The Act came into force on 1st October 1989. The Act is divided into eight charters. The Act also has regulations.

Chapter 1 deals with scope, definitions and non-mandatory elements.

Chapter 2 conditions for conducting collection activities.

Chapter 3 contains a general clause on good debt collection practice, the so-called judicial standard.

Chapter 4 deals with the relationship between collector and debtor.

Chapter 5 regulates the relationship between collector and creditor.

Chapter 6 lays down rules on the debtor's liability in damages in connection with default.

Chapter 7 lays down rules on confidentiality, security, supervisory authority and sanctions, while Chapter 8 is a concluding charter which deals with transitional provisions and amendments to other acts.

Introduction

In Norway there are a number of debt collection agencies which deal with several hundred thousand debt collection assignments or overdue pecuniary claims annually. The conduct of the debt collection protagonists is supervised by the Credit Inspectorate. The Credit Inspectorate ensures that the collection process is in accordance with the provisions of the Act.

Collection out of court

A debtor must receive a collection notice before further collection measures are initiated. In the collection notice the debtor must be informed that collection will be initiated if the claim is not paid within a time limit of at least 14 days. The time limit is calculated from the date on which the notice is gent, and it must have expired before further collection measures can be initiated. The creditor may not, therefore, send his claim to a collection agency before the time limit in the collection notice has been disregarded. This means that there is an obligation to send a collection notice. The basis for this obligation is that the debtor should be given an opportunity to prevent the debt being sent for collection with all the costs and inconvenience that would entail. The obligation to send a collection notice might also lead to the debtor raising possible objections, resulting in unnecessary collection proceedings at the creditor's expense being avoided.

If the collection notice is sent no earlier than 14 days after the due date, the creditor can charge compensation in the form of a fee for sending it pursuant to the provisions of the Debt Collection Act. The compensation amount is equal to 1/10 R. In 2006 one R is equal to NOK 550.00. The creditor can therefore charge a compensation fee of NOK 55.00.

Demand for payment

Pursuant to Section 10 of the Debt Collection Act the debt collection agency may send a demand for payment to the debtor once the 14-day time limit in the collection notice has expired. The demand for payment must give the debtor a new time limit for payment of at least 14 days, at the same time as the debtor is asked to put forward any objections he may have to the claim. The demand for payment or letter of claim from the debt collection agency must specify the following:

1. The creditor's name
2. What the claim concerns.
3. The size of the claim with itemization of the principal claim, additional claims, default interest and collection costs.
4. The date from which interest is charged.
5. A warning that failure to pay may lead to collection through the courts and further costs for the debtor.

When the demand for payment is sent out, the debt collection fee is in accordance with a scale of charges and dependent on the size of the debt to be collected. In addition to sending a letter of claim, the collection process also includes telephone contact, personal visits and holding meetings with the debtor.

Once the out-or-court process has been pursued by means of a collection notice, demand for payment and other out-or-court measures, the next step is to initiate the judicial process.

The course of collection proceedings

The collection proceedings start at the out-or-court stage with the sending of a collection notice and demand for payment, after which the judicial process is started. The first step of the judicial process is to file a conciliation complaint with the Court of Conciliation, which has lay judges. If the court finds itself unable to deliver a judgment in a case and the parties request that it be referred for further hearing, the case is transferred to a Municipal or District Court, where professional judges decide the outcome of the case.

Default interest

Default interest in Norway is 9,75% for both businesses and consumers. Default interest higher than 9,75% can be agreed between the parties for businesses. Higher interest cannot be agreed for consumers.

Limitation

An ordinary pecuniary claim, an invoice, lapses three years after the due date. The judicial process must be initiated before the three-year time limit expires, or there must at least be an admission of debt by the debtor. Such an admission of debt also stops the period of limitation. If what is known as a basis for enforcement exists, i.e. a judgment or instrument of debt, the period of limitation for the pecuniary claim is 10 years.

Debt recovery proceedings

A case which is referred to the higher court by the Court of Conciliation will commence with a summons to appear before the Municipal or District Court. The summons will be served on the debtor with an order to give the court notice of intention to defend. The case is largely argued before the court by lawyers. A debtor can, however, argue his own case if he so wishes. The position is not such that cases have to be argued before the court by lawyers.

The case will go before a court in the place where the debtor has his legal venue unless otherwise agreed between the parties. A legal venue other than that of the debtor can therefore be agreed. The progression of the judicial apparatus is then as follows:

First court -Court of Conciliation
Second court- Municipal or District Court
Third court -High Court
Fourth court –Supreme Court

Execution

Execution can be requested when a final judgment has been made or there is another enforceable basis for execution, such as a settlement in court, legally enforceable instrument of debt, etc., this is done by requesting attachment of any assets which the debtor may possess. The procedure for execution is that the motion is sent to the Execution and Enforcement Commissioner, who notifies the debtor of the execution proceedings being listed for hearing. The attachment proceedings are held and a decision taken regarding want is to be attached. Personal effects, tools, money, rood and essential supplies cannot be attached. The debtor's par and other assets he may have, such as a car, house, apartment, holiday cottage, etc., can be attached. A deduction from par can be ordered for two years at a time, and a new deduction from par may be requested if the claim has not been paid by the deduction from par over the period of two years.

Where a creditor holds a chattel mortgage on goods gold to the debtor, return of the goods can be demanded in the event of default. This is practical in the case of large capital items such as cars, small boats, computers, etc.

Bankruptcy proceedings

Bankruptcy proceedings are an alternative to ordinary execution in cases where a party is seeking to force payment from a debtor by forced realization of his assets. Bankruptcy proceedings against commercial debtors are initiated by filing a bankruptcy notice, which is served on the debtor. A petition in bankruptcy is then filed. This is dealt with by the Bankruptcy Court. When a petition in bankruptcy is filed, a fee in the order of NOK 43.000,- has to be paid to the Bankruptcy Court by the petitioner as security for casts.

Bankruptcy proceedings often lead to a debtor paying the amount owed. Bankruptcy proceedings are not very practical in the case of private debtors. Bankruptcy proceedings are regulated by the Bankruptcy Act and execution is regulated in the Enforcement of Claims Act.

Summary

The debt collection process in Norway can be summarized as follows:

1. Out-or-court process:
Collection notice, demand for payment, telephone contact and other out-of-court measures.


2. Judicial process to obtain a basis for enforcement:
Filing of conciliation complaint, summons, obtaining instrument of debt.

3. Execution
Motion for attachment, motion for enforced sale. Alternatively bankruptcy proceedings can be instigated.

The debt collection process and execution are regulated by the Debt Collection Act and the Enforcement of Claims Act.
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