Debt Collection Guide - Euler Hermes · 1 Euler Hermes is the world’s largest credit insurance company with offices in 50 countries. Globally, we oversee more than 40 million …

Debt Collection Guide

About Euler Hermes ........................... 1

Good advice in connection with selling at home and abroad ................................ 2

Denmark ............................................. 3Collection procedure ......................................... 3Euler Hermes ..................................................... 3Judicial recovery of debts .................................. 3Bankruptcy .......................................................... 5

Finland ................................................ 6Collection procedure ......................................... 6Euler Hermes ..................................................... 6Judicial recovery of debts .................................. 6

France ................................................. 8Collection procedure ......................................... 8Euler Hermes ..................................................... 8Judicial recovery of debts .................................. 8

Germany ........................................... 10Collection procedure ....................................... 10Euler Hermes ................................................... 10Judicial recovery of debts ................................ 10

Great Britain...................................... 11Collection procedure ....................................... 11Euler Hermes ................................................... 11Judicial recovery of debts ................................ 11Judicial steps ..................................................... 12

Norway ............................................. 13Collection procedure ....................................... 13Euler Hermes ................................................... 13Judicial recovery of debts ................................ 13Euler Hermes’ experience ............................... 14

Norway (continued) ........................................14

Poland ............................................... 15Collection procedure ....................................... 15Euler Hermes ................................................... 15Judicial recovery of debts ................................ 15

Sweden ............................................. 16Collection procedure ....................................... 16Euler Hermes ................................................... 16

Sweden (continued) .......................................17

Judicial recovery of debts ................................ 17Euler Hermes’ experience ............................... 17

Contents

Liability etc.The debt collection guide has been copyrighted by and belongs to Euler Hermes Danmark, branch of Euler Hermes Europe S.A., Belgien (“Euler Hermes”) and any company of the Euler Hermes group. The guide cannot be reproduced in any other form or be distributed in any way. Euler Hermes cannot guarantee or be held liable for the correctness of the guide relative to the reader’s use or requested use thereof. Reservations are made that the information contained in the guide may be incorrect as a result of changed practice or legislation.

1

Euler Hermes is the world’s largest credit insurance company

with offices in 50 countries. Globally, we oversee more than

40 million businesses and protect 52,000 clients against

losses.

We are among the largest players globally in the foreign

debt collection market, and we offer professional trade debt

collection services worldwide. With Euler Hermes you are

therefore given the possibility of recovering a debt irrespective of

where in the world the debtor is located.

The guide provides you with an insight into how debt

collection is carried through in Denmark and in our most

important neighbouring markets – that is Sweden, Norway,

Finland, Germany, Great Britain, France and Poland.

The guide describes briefly how a debt collection procedure

normally takes place as well as the interest terms and fees

which apply locally, unless otherwise agreed between the

parties.

Under each country headline you can read more about the

local procedures in connection with collecting debts, including

the pre-action procedure and the judicial recovery of debts

as well as what documentation you should or must procure

as a minimum. In addition, we state which fees you will

have to expect to pay as creditor in connection with the

judicial recovery of debts.

The guide will be updated and extended with more countries on

an ongoing basis. The most recent version can be down-

loaded on www.eulerhermes.dk.

About Euler Hermes

Euler Hermes is part of the Allianz group – one of the world’s largest financial groups.

Debt collection through Euler Hermes’ collaborator Debt collection through Euler Hermes

2

Discover fraud in timeFraud may have considerable impact on your business.

Perhaps the firm which the buyer represents does not exist

at all or perhaps it is a firm of many names which is difficult

to trace when payment is not made. To many businesses it

may seem impossible to get an overall view of whether a

new customer is serious or not. If you are a client with Euler

Hermes Danmark, we will assess whether your customer is

creditworthy and genuine. Nevertheless, there are numer-

ous things you may also do yourself. Below you will find a

list of typical danger signals to be observed.

Get the correct information from the beginningIn addition to paying attention to the small danger signals,

you can also protect yourself and your business by demand-

ing that the placing of an order is made in writing and in-

cludes specification of either central business registration

(CVR) number (or the equivalent thereof abroad) in case

your customer is a business or civil registration number in

case your customer is a private individual. Furthermore,

your customer should state his name and telephone num-

ber in block capitals on the order. If your buyer places his

order over the cell phone, you should be careful and as a

minimum check the number and call him back.

If you suspect fraudIf you experience any kind of suspicious behaviour of

Danish debtors, contact the police in your police district

for a discussion of the need for taking any measures on the

part of the police. If you are a client with Euler Hermes and

experience danger signals in relation to a Danish or foreign

debtor, contact Euler Hermes to discuss the further process

of the matter.

Have you made any agreement on exclusive choice of law and jurisdiction?It is important that you inform Euler Hermes whether your

business terms include exclusive choice of law and jurisdiction

in the creditor’s own country. In case thereof, proceedings

typically cannot be commenced in the debtor’s country. On

the other hand, they must be commenced in the jurisdiction

agreed (most frequently in the creditor’s country). Where in

spite of the above-mentioned clauses, the creditor chooses

to institute proceedings in the debtor’s country, the debtor

can claim that the creditor is suing him in the wrong coun-

try and is using the incorrect choice of law. A consequence

thereof may be that the case is stopped, the claim rejected

and the legal costs will be imposed on the creditor.

Remember to save your receiptWhen you send the goods off to your customers, they sign

for the goods. The shipping agent, who delivers the goods,

gets a receipt signed by your customer. If you do not get this

receipt automatically then make a permanent agreement

with your agent to send you your receipt when the goods

are delivered. Should there later occur a collection case

with your customer, it may be needed to obtain proof that

the goods are received. With a receipt we can later help you

to conduct a potential case.

Good advice in connection with selling at home and abroad


Danger signals - The debtor presses often and at short intervals for delivery of the goods.

- Set-up of an account for large purchases within a relatively short period of time.

- The order is out of proportion to the business volume of the customer.

- The firm does not try to negotiate the price but accepts the price specified without any hesitation.

- The official address of the firm is a PO Box address.

- The purchaser places his order by cell phone.

- The address and the PO Box address of the firm are not located in the same area.

- Frequent changes of the firm name.

- The purchaser requests to collect the goods at your premises.

- The delivery address is not the same as the official address of the firm.

3

DenmarkDebt Collection Guide

Collection procedure

Letters requesting paymentNormally maximum three letters requesting payment will

be sent to the debtor.

Placing a debt for collectionIn order to place a debt for collection, the last letter requesting

payment – the Letter Before Action – must include a time for

payment of 10 days as well as a warning of debt collection.

Standard interest rate for debt collection in DenmarkThe standard interest rate is calculated based on a stand-

ard interest rate fixed by Denmarks Nationalbank + 7% p.a.

FeesA fee of DKK 100 can be charged each letter requesting

payment and in connection with the Letter Before Action.

This fee can be charged for a maximum of three times

of which the last one will be the fee for the Letter Before

Action.

Euler Hermes

Pre-action procedure• A collection letter including a debt statement is sent to

the debtor. The debtor can make a proposal for a possible

instalment agreement in the debt statement.

• The debtor is contacted by phone and is informed that

the matter may become the subject of judicial procedure

in case of non-payment.

Documents required for the pre-action procedureThe following information must be sent to Euler Hermes:

• Copies of invoices

• Copy of statement of account

• Copies of letters requesting payment (in regard to

Danish debtors, it is paramount to send a Letter Before

Action including a warning of debt collection and stating

a time for payment of 10 days)

• Correspondence between the parties.

Judicial recovery of debts

Documents required for the judicial recovery of debtsThe documents required for the judicial recovery of debts

are the same as those required for the pre-action procedure.

Judicial steps

Summons A Summons (British civil law term: Claim Form) must

include among other things:

• Names and addresses of the parties in Denmark

• Name of the court where the proceedings are instituted

• The Plaintiff’s (present British civil law term: Claimant)

claim

• Details of the claim, including the facts and judicial

circumstances

• List of documents and other evidence which you request

to produce during the proceedings.

• You have the possibility of using a Summons form. The

Summons form must be signed and in connection with

filing a Summons form, you will typically have to pay a

court fee.

Time horizon for legal proceedingsIt is difficult to predict – but typically six months.

Fees for the judicial recovery of debtsA court fee is a fee which the courts charge on behalf of the

Danish state, and as a main rule, it must be paid in connection

with all civil proceedings. If you have been granted free legal

aid to conduct the litigation, you will not have to pay the

court fee.

Calculation of the court feeThe size of the court fee payable by you depends on the na-

ture of the civil proceedings. When you have calculated the

court fee, the amount must be rounded up to the nearest

amount in Danish ’kroner’ dividable by 10.

>>

4

>>

Denmark (continued)


For claims which relate to amounts or which can be

assessed as amounts, the following applies:

• A basic amount of DKK 500 must be paid.

• If the value of the claim exceeds DKK 50,000, an additional

amount of DKK 250 must be paid + 1.2 per cent of that

part of the value which exceeds DKK 50,000. The value

of the claim is determined according to the claim of the

Summons (interest and costs are not part of the calcula-

tion of the value of the claim).

• The total court fees (including the basic amount of DKK

500) cannot exceed DKK 75,000.

• When the pre-trial work of the court has ended and the

claim is to be listed for trial (or written consideration

which shall then replace the trial), an additional court

fee (the pre-trial fee) must be paid insofar as the value

of the claim exceeds DKK 50,000. The value of the claim

is determined according to the claim at the time when

the fee is to be paid. The pre-trial fee is calculated in the

same way as the court fee which is paid when the pro-

ceedings are instituted (cf. above). In this way the pre-

trial fee in the example mentioned below amounts to

DKK 1,050. The pre-trial fee is subject to the same maxi-

mum amount stipulations as those which apply to the

court fee.

For claims where the legal proceedings are instituted based

on a claim for payment, special rules apply.

The rules for simplified debt collection procedure was ad-

justed on 1 October 2011 and apply to outstanding debts

below DKK 100,000 (“small claims procedure”).

Pursuant to this Act, the creditor can send his claim directly

to the enforcement court in the form of a special claim for

payment which the enforcement court will then serve to

the debtor.

If the debtor does not file a defence to the claim within the time

stated, the claim for payment functions both as judgment and

as basis for enforcement. In relation to most claims, this is

expected to reduce the processing time of the court’s han-

dling of the claim to 1-2 months compared to the previous

approximate duration of 6 months. If, on the other hand, the

debtor files a defence, the claim will proceed as a normal

legal action.

Payment of the court feeIf you have calculated the court fee yourself, you must pay

it when you file your Summons with the court. If you do not

pay the court fee at the same time as you file the Summons

(or claim for payment), the court will calculate the court fee

and state a time for payment thereof. If you do not observe

the time limit for payment of the court fee, the court may

dismiss the case.

The court fee is calculated in this way:DKK 500 + DKK 250 + ((value of the claim - 50,000) x 0.012) = the court fee

Example: The value of the claim is DKK 75,000. The court fee amounts to DKK 500 + DKK 250 and 1.2 percent of DKK

25,000 totalling DKK 1,050.

5

Denmark (continued)


The pre-trial fee need not be paid until the court has fixed a

time for the trial (or written consideration which shall then

replace the trial) – however not earlier than three months

prior to the trial.

Further informationThe court fee is part of the legal costs.

Fees for judicial recovery of debts where the debtor files a defenceThe claim must be processed via an attorney who typically

charges legal fees of DKK 1,250 per hour + VAT.

Bankruptcy

Who can file a petition for bankruptcy?Any creditor who has an outstanding account against a

debtor can file a petition for bankruptcy. It is a condition

that the cause of non-payment is lack of available funds

and not lack of will to pay, for instance in connection with

dissatisfaction with work performed. Where this is the case,

legal action must be brought before the ordinary courts.

The same thing applies if a dispute is involved.

A person or a company in insolvency can file a petition for

bankruptcy against him/itself.

In general, it is recommended that one contacts an attor-

ney before filing a petition for bankruptcy.

How much does it cost to file a petition for bankruptcy?The court fee for filing a petition for bankruptcy is DKK

750.

The party filing a petition for bankruptcy must normally

provide security for payment of the costs of the bankruptcy

proceedings. The amount of the security is fixed by the

bankruptcy court and must be provided before the bank-

ruptcy court will make a decision on bankruptcy. The costs

in connection with the bankruptcy proceedings are always

covered first by the funds in the estate in bankruptcy.

If sufficient funds are not found in connection with the

administration of the estate, the party who filed the petition

for bankruptcy shall pay the costs.

Where to file a petition for bankruptcy?If the debtor owns a business, the petition for bankruptcy

must be filed with the bankruptcy court in the judicial

district where the business is located. If the debtor does not

own a business, the petition for bankruptcy must be filed

with the bankruptcy court in the judicial district where the

debtor lives. If such location is Greater Copenhagen, the

petition must be filed with the Copenhagen Maritime and

Commercial Court.

The petition for bankruptcy must be in writing.

What must be included in the petition?The petition for bankruptcy must state the name and address

of the debtor as well as any central business registration

number. Moreover, the petition must include information

on the claim and the debt as well as contact information on

the party filing the petition for bankruptcy.

If a debtor files a petition for bankruptcy against himself, he

must enclose a statement of his assets and liabilities as well

a list of his creditors.

6


Letters requesting paymentWe recommend that you send maximum two letters

requesting payment. After this, the debt collection proce-

dure can be commenced. It is a good idea to send requests

for payment by e-mail or fax because it is faster than by

ordinary mail.

Placing a debt for collectionThe debt should be placed for collection not later than 60

days after the time for payment was exceeded. The sooner

a debt is placed for collection the more likely a successful

recovery of the debt is.

Standard interest rate for debt collection in FinlandUnless otherwise agreed between the parties in writing,

the standard interest rate is the European Central Bank’s

lending rate + 7% p.a. pursuant to the Finnish Interest Act.

FeesFees are normally not charged in connection with requests

for payment in business relations; but the creditor can

charge a reasonable fee for the costs thereof. However,

there is no guarantee that the fee will be paid.

Euler Hermes

Pre-action procedure• The first letter requesting payment is sent to the debtor

and shall state a time for payment of 7 days.

• The debtor is then contacted by phone

• Another letter requesting payment is sent to the debtor

and includes a warning that the debtor will be registered in

a public register unless the debt is paid within 10 days.

The effect of this letter is extremely positive in Finland.

As the debtor does not wish to have poor creditworthiness,

the debtor will usually pay subsequent to this letter .

• If the claim has not been paid and the debtor has not

filed a defence, the debtor will be entered in the official

register. This will naturally affect the debtor’s credit-

worthiness.

• Based on an assessment of the debtor’s financial situation,

the creditor can choose to close the case or to consider the

risk involved in taking judicial steps.



If further documents are required, such as order and delivery

documents, Euler Hermes will contact you.


Documents required for the judicial recovery of debtsThe following information must be sent to Euler Hermes:


• Copy of settlement where such has been agreed between

the parties

• Order and delivery documents

• Correspondence and other supporting documents

• Euler Hermes will send the creditor a power of attorney

which must be signed and returned by the creditor.

Judicial stepsApplication of Summons will be sent to the court within 1-2

business days after Euler Hermes has received the information

requested.

Time horizon for legal proceedingsThe processing time of the court depends on the district

court. Normally it takes 2-4 months to get a court order. In

large district courts, the processing time is usually longer

than in the smaller district courts.

When an order has been issued, the case will be sent to the

bailiff who will then enforce the order. Where a debtor cannot

pay immediately, the bailiff will try to make an instalment

agreement with the debtor or look into the debtor’s income

or assets.

How long time it takes before the creditor can receive the

amount recovered varies from case to case. It may take 1-2

years if an instalment agreement has been made or if it is

difficult to find other assets. Where other assets cannot be

found, the case is lost.

The bailiff charges a commission of 0.5% of the amount

recovered.

FinlandDebt Collection Guide

>>

7

Finland (continued)


Fees for the judicial recovery of debtsThe fees payable in connection with undisputed judicial

steps are approximately EUR 150.

Fees for the judicial recovery of debts when the debtor files a defenceWhere the debtor files a defence, the case must be turned

over to an attorney. In such cases, the costs start at EUR

4,000-5,000. It is not possible to estimate the final costs

because they depend on the extent of the procedure. It is

naturally possible to obtain quotations for this.

BankruptcyBefore taking judicial steps, it is possible to threaten the

debtor with a petition for bankruptcy. This can also be

made before the petition is sent to the enforcement court.

This threat can be made against the debtor if he has not

filed a defence to the claim. The debtor then has 8 days to

pay his debt. The threat of petitioning bankruptcy does not

necessarily mean that the creditor will file a petition for

bankruptcy – it is merely an effective way to try to recover

payment.

As the threat of petitioning bankruptcy is not effective in

all cases, it must be considered carefully in each individual

case. The threat should be made in large cases where the

debtor has not filed a defence – in addition the financial

background of the debtor should be considered.

The fee for threatening to petition bankruptcy is EUR 150.

A business may risk to be adjudicated bankrupt if it cannot

pay its debt to the creditor.

The procedure commences with a petition for bankruptcy

from the creditor or debtor and ends with a liquidation of

the debtor’s business as well as sale of assets at the best

possible price. After this, the creditors will be paid in

accordance with the order of priority.

Note that where a creditor files a petition for bankruptcy,

the creditor shall be liable for the costs connected with the

administration of the bankruptcy if the debtor has no assets

which can cover such costs. The administration costs can

amount to several thousand euros, and consequently careful

consideration is required before a petition for bankruptcy

is filed against a debtor.

8

FranceDebt Collection Guide


Letters requesting paymentNo general rules apply in relation to letters requesting payment.

It is possible to commence the debt collection procedure

even though the creditor has not sent one or more letters

requesting payment. The letter requesting payment is however

needed to add interests to the claim.

Placing a debt for collectionThe debt should be placed for collection as soon as possible.

This increases the possibility of recovering the debt.

Standard interest rate for debt collection in FranceThe interest rate changes every year. For 2007 the standard

interest rate is 2.95%. However, if a case is processed without

problems, French debtors generally do not pay interests

but ask for their annullment.

FeesLetters requesting payment are not subject to collection of

fees.

Euler Hermes

Pre-action procedure• As soon as the case is handed over to debt collection, a

dunning letter is sent.

• The debtor may be contacted by phone 7 days after the

first letter requesting payment

• The debtor is contacted personally at his private address

if it was not possible to contact him by phone

• If a payments agreement or other agreement is not pos-

sible (the debtor has gone, is not possible to reach or has

filed a defence), judicial steps may be taken depend-

ing on debtor’s solvency.



• Statement of account

• Power of attorney signed by the creditor’s legal

representative.




• Statements of account

• Power of attorney signed by the creditor’s legal repre-

sentative

• Order and delivery confirmation.

If the debtor has filed a defence, additional documents are

required:

• Terms of sale and delivery

• All relevant correspondence between the parties

• All information needed to make the dispute easier to

understand

Judicial stepsBasically, there are two kinds of legal proceedings:

• Recovery procedures for uncontested claims so that an

enforceable title can be obtained relatively quickly

• Recovery procedures in the event of disputed claims.

Uncontested claims

• Request for order to pay is sent to the court. The court

hears the request and makes its decision within 2-8

weeks. The decision is sent to the bailiff who will then

notify the debtor. The debtor is given one month to raise

a defence

• If the debtor raises a defence, the action must be sub-

mitted by an attorney

• If the debtor does not raise a defence, the decision will be

sent to the bailiff for enforcement, and monitored by the

local collections department

Disputed claims

The case should be handed over to an attorney.

>>

9

France (continued)


Time horizon for legal proceedingsThe time horizon depends on the court; but in connection

with issue of an order to pay, the time horizon is normally

3-5 months for an undisputed claim.

If the assistance of an attorney is required, for instance if

a defence is raised or in connection with a complicated

cases, the time horizon may be 6-12 months, dependent on

the court and on the nature of the disagreement between

the parties.

Fees for the judicial recovery of debtsThe estimated cost for a court ruling is approximately EUR

200 for an order to pay in case of an uncontested claim and

if no defence has been raised. Add to this the costs of the

debt collection case, which depends on the individual case

and its complexity, but typically totals EUR 150.

These costs are charged by the bailiff who also charges a fee

of 10% of the recovered amount.

Fees for the judicial recovery of debts where the debtor files a defenceIn the court of first instance, the estimated costs are

approximately EUR 1,500.

The Summons delivered by the bailiff:

• Approximately EUR 60

• VAT: EUR 8.84

• Attorney: EUR 1,400 inclusive of taxes (average).

Taking it by and large, the costs for simple cases are the

same irrespective of the size of the debt and must be paid

irrespective of whether the debt is recovered or not. The

costs may be higher in more complicated cases.

If the judicial recovery of debts is successful, the creditor

has the right to collect the fees payable to the bailiff and

VAT, but not legal fees. However, the decision entitles to

some compensation, but this is never big enough to cover

the legal fees. The decision may entitle the creditor to

compensation for damage incurred.

BankruptcyThe court fee for filing a petition for bankruptcy against a

debtor is approx. EUR 1,000.

Actions regarding retention of title can be monitored by

Euler Hermes Debt Collections Services. The costs depend

on the complexity of the case.

10


Letters requesting paymentOne letter requesting payment is sent to ensure that the

debtor does not file a defence to the claim.

Placing a debt for collectionThe sooner the debt is placed for collection the better.

Standard interest rate for debt collection in Germany Where an interest rate has not been agreed between the

parties, German legislation makes it possible to charge

a standard interest rate fixed by the Deutsche Bundesbank

+ 8% p.a.

FeesForeign creditors cannot charge any fees from German

debtors based on letters requesting payment.

Euler Hermes

Pre-action procedure• Confirmation of receipt of the claim is sent to the

creditor

• One letter requesting payment is sent to the debtor

– the letter may include a proposal for a payments agree-

ment

• The debtor is contacted by telephone within 5 business

days

• A list of the outstanding debts is sent to the debtor.

• How the matter proceeds from here depends on the

individual case. The following are possible steps:

• Where the debtor does not react, Euler Hermes will try to

contact the debtor at his home address

• Contact by phone with the debtor

• Sending more letters requesting payment

• Receipt of proposal for a settlement

• “Mahnbescheid” (the German payment order) is com-

menced via Euler Hermes. “Mahnbescheid” is the first

judicial step in a judicial recovery of debts

• Where the debtor files a defence to the claim, the credi-

tor will be contacted.


• Debt collection orders (agreement between Euler

Hermes and the creditor concerning recovery of the debt

on behalf of the creditor)

• Copies of invoices.


Documents required for the judicial recovery of debtsInquiries will be made in each individual case. But normally

the following documents are necessary and must be sent to

Euler Hermes:

• Invoices

• Power of attorney

• Order confirmation

• Delivery confirmation.

Judicial stepsThe judicial step is Mahnbescheid (cf. previously).

Time horizon for legal proceedingsThe time horizon depends on the circumstances (the court,

the area, the debt, etc.).

Fees for the judicial recovery of debts – irrespective of whether the debtor files a defence or notThe fees are governed by the law and depend on the cir-

cumstances (the court, the area, the debt, etc.).

BankruptcyNormally a creditor does not petition bankruptcy as it

rarely results in any recovery. Petitions for bankruptcy are

subject to payment of legal fees and a court fee laid down in

the legislation.

GermanyDebt Collection Guide

11

Great BritainDebt Collection Guide


Letters requesting paymentIt is recommended that two letters requesting payment be

sent after which a letter with the warning of legal action

– the Letter Before Action – should be sent. The Letter Before

Action gives the debtor 48 hours or 7 days to pay before judi-

cial steps are taken. Normally, the notice given is 48 hours;

but the creditor can decide what time frame to use.

Placing a debt for collectionThe debt should be placed for collection not later than 4

weeks after the time for payment was exceeded. The sooner

a debt is placed for collection the more likely a successful

recovery of the debt is.

Standard interest rate for debt collection in Great BritainWhere the creditor has not stipulated anything regarding

interest on late payment in his business terms, the rules of

the Late Payment Act 2002 will be applied. This provides

the creditor with the compulsory right to charge the Bank

of England’s standard interest rate + 8% p.a.

FeesGenerally fees are not charged in connection with letters

requesting payment as such letters are part of the general

collection procedure.

Euler Hermes

Pre-action procedure• The first letter requesting payment is sent to the debtor.

The letter states that payment must be effected within

two days

• Attempts are made at contacting the debtor by phone,

and within two days another call is made again

• The second letter requesting payment is sent to the

debtor

• The debtor is contacted for the third time by phone

• The Letter Before Action is sent to the debtor. This gives

the debtor 48 hours to effect payment – if he fails to do

so, the judicial recovery of the debt will be commenced.

Where the debtor files a defence, Euler Hermes will request

a written statement from the debtor. The creditor must re-

spond to the debtor’s defence – also where it has not been

possible to obtain a written statement from the debtor.

To be able to take judicial steps in the case, Euler Hermes

must have been in contact with the debtor by phone; this is

in particular the case where a limited company is involved.

A limited company is a company with limited liability. In

Denmark such companies are among other things desig-

nated “aktieselskaber” or “anpartsselskaber”. Where Euler

Hermes has not succeeded in contacting the debtor by

phone, the case will be turned over to a trace agent at a fee

of GBP 65 + VAT. In connection with relatively more com-

plicated cases, an investigation agent is employed, and the

fee collected for this is GBP 90 + VAT.


• All contact information on the debtor



• Debtor’s corporate form: Limited company, sole trader

or partnership (full names), PLC.



• All contact information on the debtor

• Documentary proof (business terms, documents relat-

ing to the opening of an account, invoices, statement of

account, proof of delivery, e-mails, letters). Produce and

send as much information as possible

• Any information on car, cell phone, bank account and

key customers

• Information on payments as soon as they have become

available – keep copies of cheques

• Alternative income

Moreover, it is a good idea to ensure that witnesses, if any,

are available.

>>

12

Great Britain (continued)


Judicial steps

Two possible judicial steps exist: Through the court or

through corporate or personal insolvency. In Great Britain,

a terminological distinction is made between bankruptcy,

which is used when the debtor is a person, and liquidation

(winding-up), which is used when the debtor is a company

or a partnership. In case of bankruptcy or liquidation, the

outstanding amount must as a minimum be GBP 750.

The proceedings are instituted at different courts dependent on the size of the debt• Debts for up to GBP 5,000 – “small claims track” – are

handled by the Bailiff’s Court. The proceedings normally

commence within 8-10 weeks

• Debts for GBP 5,000-15,000 – “fast track procedure” –

are handled by the county courts. The proceedings com-

mence within 30 weeks

• Debts for more than GBP 15,000 – “multi track” – are

handled by the High Court. The proceedings commence

within 30 weeks.

Time horizon for legal proceedings-Day 1: The case is turned over to Euler Hermes’ internal

legal department. They will check whether the

documentary proof is sufficient and in order

Day 2: The case is turned over to an attorney – a Letter

Before Action is sent to the debtor

Day 9: One of the following events has occurred:

• The debtor has paid

• A payments agreement has been reached

• The debtor files a defence to the claim. The credtor

is contacted and asked to respond to the defence

of the debtor

• The Letter Before Action is returned and tracing

of the debtor is commenced

• The judicial recovery of debts is commenced.

Day 10: The claim form is sent to the court

Day 11: The claim form is issued by the court and sent to

the debtor

Day 18: The court considers that service of the claim has

been made

Day 32: The debtor is expected to have returned his accept-

ance of the service. If this is not the case, a deci-

sion will be made on the non-payment. Where the

debtor admits the claim, the decision will be made

in accordance with the admittance

Day 46: The debtor must have returned his acceptance of

the service to the court

Day 47: Application for a decision based on failure of

defence

Day 54: Judgment is delivered by the court. The debtor is

requested in writing to pay

Day 61: If payment is not made, a High Court enforcement

officer is contacted with a view to recovering the

debt.

Fees for the judicial recovery of debtsThe standard fee is GBP 460 + VAT.

Fees for the judicial recovery of debts where the debtor files a defenceIt is not possible to specify a general fee as it will depend on

the specific case. Therefore payment is made on an hourly

basis to an attorney. It is naturally possible to obtain quota-

tions.

BankruptcyThe costs of filing a petition for bankruptcy or liquidation

against a debtor are GBP 1,700.

13


Letters requesting paymentAfter having sent the invoice, it is only necessary to send

one letter requesting payment – Letter Before Action –

containing a warning of debt collection.

Placing a debt for collectionIn order to place a debt for collection, the Letter Before

Action must state a time for payment of 14 days.

Standard interest rate for debt collection in NorwayThe standard interest rate is calculated based on a standard

interest rate fixed by Norges Bank + 7% p.a.

FeesDebitor may be charged a fee of NOK 59 per letter requesting

payment or in connection with the Letter Before Action. It

is only possible to charge debtor in connection with either

two letters requesting payment or one letter requesting

payment and a Letter Before Action.

Euler Hermes

Pre-action procedure• A letter requesting payment is sent to the debtor

• A warning of ”double fee” is sent to the debtor

• A warning that judicial steps may be taken is sent to the

debtor.


• Name of the debtor

• Size of the debt

• Date of issue of the invoice

• Due date of the invoices (Copies of the invoices are preferred

but not necessary).



• invoice copies

• agreement (if it is made between the parties)

• order and delivery documents

• correspondence and other supporting documentation

• Power of Attorney (which we will send from here to be

signed by creditor)

Non-disputed claimsNon-disputed claims may be sent straight to enforcement.

The authorities will summon the debtor to investigate if

the debtor has any assets to collect. If there is no money

to collect, debitors properties may be pawned. The credi-

tor may later file a petition to sell these items to cover the

claim. If there is nothing to collect, the case will be returned.

The cost is 1591 NOK (approx 200 Euro) if there is nothing

to collect.

Disputed claimsIf the debtor disputes the claim the the otion is to either try

the case at a settlement court or file a lawsuit:

Settlement court

The settlement court consists of 3 non-legal judges, who

will try to reach a settlement between the involved parties.

If settlement is not possible the court will pass verdict. If

the case is too complicated it may be transferred to a higher

court. The creditor has to meet before court or use a

representative. The meeting will take place in the city

where the debtor is located. The cost for the proceedings

is 100 Euro. The court ruling should be appealed within 30

days to avoid enforcement.

NorwayDebt Collection Guide

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14

Lawsuit

A lawsuit will be handled by an external lawyer. The total

costs may be 15,000 Euro depending on the hours spent

by the lawyer. The loosing party will often have to cover all

costs.

Judicial stepsIt is possible to have the claim enforced (sale of assets,

house etc.) and to apply for bankruptcy proceedings to be

instituted against the debtor.

Time horizon for legal proceedingsLegal proceedings take 1-7 months.

Fees for the judicial recovery of debtsThe fee is NOK 860.

Fees for the judicial recovery of debts when the debtor files a defence to the claimIf you appear before the court yourself, only the above-

mentioned fee of NOK 860 will be charged. If, on the other

hand, you wish to be represented by an attorney, you will

have to expect legal fees of NOK 1,250 per hour or fraction

of an hour.

BankruptcyThe costs of applying for bankruptcy proceedings to be in-

stituted against a debtor are NOK 42,500. The NOK 42,500

rank as number one in the order of priority when the funds

in the estate in bankruptcy are paid.

Euler Hermes’ experience

Good advice to be considered when selling to NorwayIf the debtor has filed a defence to a claim, we recommend

(dependent on the size of the amount) a settlement due to

the very high legal fees.

Norway (continued)


15

PolandDebt Collection Guide


Letters requesting paymentThe creditor may send letters requesting payment. However

he is not obliged to do so.

Placing a debt for collectionThe debt should be placed for collection as soon as possible,

preferably on the day after the debt is due – and within 30

days after the due date.

Standard interest rate for debt collection in PolandUnless otherwise agreed between the parties, the interest

will be calculated in accordance with the Polish legislation.

FeesAs a rule, fees are not charged for letters requesting pay-

ment; however it is possible to impose the actual costs re-

lating to the debt collection case on the debtor.

Euler Hermes

Pre-action procedure• The debtor is contacted by phone within 24 hours

• The debtor is contacted for the second time by phone

within 7 days

• The debtor is contacted personally at his private address

within 14 days

• A report is made after 28 days

• The legal adviser forwards a claim for payment after 30 days

• Proposal for enforcement proceedings is made after 45 days

• Legal proceedings are instituted after 57 days.

Documents required for the pre-action procedure• The following information must be sent to Euler

Hermes:

• Contact information on the debtor

• Debtor’s corporate form



• Confirmation of delivery

• Documentation of the debtor’s defence

• General business terms

• Correspondence between the debtor and creditor of

relevance to the case

• Pertinent agreements with a third party (factoring, debt

acquisition etc.).


The judicial recovery of debts necessitates the same docu-

ments as those necessary for the pre-action procedure and

a signed power of attorney from the creditor.

Judicial stepsIt is possible to recover the debt by way of a Summons issued

by the court if the debtor has not raised a defence. If the

debtor has raised a defence, the next stage will be general

legal proceedings (with the possibility to appeal) which may

produce an enforceable basis for enforcement proceedings.

Time horizon for legal proceedingsNormally, the matter will have become the subject of

enforcement proceedings after 2-3 months; and after

that, the case will have been finally processed within 8-12

months.

Fees for the judicial recovery of debtsThe fee depends on the size of the debt.

• Debts for EUR 400-1500: EUR 300

• Debts for EUR 1500-2500: EUR 600

• Debts for EUR 2,500-12,500: EUR 1,200

• Debts for EUR 12,500-50,000: EUR 1,800

• Debts for EUR 50,000 -100.000: EUR 3,600

• Debts for EUR 100.000 - 150.000 EUR 5,200

• Debts for EUR150.000 - 200.000 EUR 7,000

Plus a court fee of 8% and a translation fee of EUR 20 + VAT

per page.

Fees for the judicial recovery of debts where the debtor files a defenceThe debt collection fee is the same in case the debtor files

a defence.

BankruptcyThe fee for filing a petition for bankruptcy against a debtor

depends on the size of the debt.

• Debts for up to EUR 10,000: EUR 450

• Debts for EUR 10,000-50,000: EUR 1,000

• Debts for more than EUR 50,000: EUR 1,800

16


Letters requesting paymentAccording to custom in debt collection, maximum two let-

ters requesting payment (reminder letter) and one Letter

Before Action (dunning letter)-including the warning of legal

action - should be sent to the debtor before taking legal

actions.

The first letter requesting payment can be sent the next day

after the due date, and the dunning letter within 7-10 days

after the time for payment set out in the first letter.

Placing a debt for collectionThe debt collection case can be commenced on the day after

the debt has fallen due.

Interest rateInterest can be charged according to what is agreed between

the parties or in accordance with the Swedish Interest Rate

Act (Räntelagen).

The interest is calculated according to a reference rate set

by the Swedish Riksbank every six months plus 8 %.

FeesThere are several fees that according to Swedish law can be

charged from the debtor:

• Reminder fee: In order for a creditor to be able to charge

a fee of SEK 50 per letter requesting payment, the gen-

eral rule is that the creditor needs to have made a prior

agreement with the debtor to this extent.

• Payment plan fee: a fee of SEK 150 for establishing pay-

ment plan.

• Demand letter fee: of SEK 160 for sending a demand

letter.

Euler Hermes

Pre-action procedure• A collection letter giving the debtor 7 days to pay is sent

to the debtor.

• An application of injunction of payment is made to the

Swedish Enforcement Administration (SEA) 12 days

after the collection letter was sent, if no payment is

made. The cost of the application is SEK 300. An application

to the Swedish Enforcement Administration will give the

debtor a remark in all official registers that the debtor

has a payment due. This procedure can therefore give

the debtor problems getting new credits.

• The Swedish Enforcement Authority will then issue an

order stating that the debtor must respond.

• If the claim for payment is not disputed, the Swedish

Enforcement Authority will issue an order to pay (the

purpose thereof is to determine whether the debtor

holds assets on which execution can be levied). If the

debt is not paid or disputed after this action, the Swedish

Enforcement Authority will issue a judgement, which

can be enforced. The execution cost is SEK 600.

• If a debtor opposes an order to pay, the creditor normal-

ly has 10 days to file a request for the case to be heard by

the court.



• Business registration number of the debtor.

SwedenDebt Collection Guide

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17


Documents required for the judicial recovery of debts:The following information must be sent to Euler Hermes:


• Business registration number of the debtor

• Order confirmation

• Contracts

• Correspondence between the parties

• Written defence

• Power of attorney

Judicial stepsThree possible judicial steps exist:

• Injunction of payment

• Institution of legal proceedings (lawsuit)

• Application for insolvency.

• Note that issue of an order to pay only applies to undis-

puted debts.

Time horizon for the judicial measuresThe issue of an order to pay takes 2-12 months. It takes 4-36

months to conduct legal proceedings. The application for

insolvency takes 4-12 months.

Fees for the judicial recovery of debts• Basically, the costs of an issue of an order to pay are SEK

300. In addition SEK 600 will be charged for the execu-

tion thereof.

• The standard fee for instituting legal proceedings is SEK

450.

• The application for insolvency is subject to a court fee

of SEK 500.

• Fees for the judicial recovery of debts if the debtor files

a defence is SEK 450 for the court fee of + lawyers fees.

In cases where the debt is small, the legal costs are to be

born by each party.

BankruptcyWhen filing a petition for bankruptcy against a Swedish

debtor, you must pay an application fee of SEK 500. You can

request assistance from an attorney in connection with the

petition for bankruptcy.

Euler Hermes’ experience

Good advice to be considered when selling to Swedish businessesWe recommend that the Swedish Enforcement Authority

(Kronofogdemyndigheten) is used as this solution is easy

and inexpensive.

Further information can be obtained at http://www.krono-

fogden.se/. Information is available in both Swedish and

English.

Sweden (continued)


01.1

3

Euler Hermes DanmarkAmerika Plads 19DK-2100 København Ø

Tel: +45 88 33 33 88Fax: +45 88 33 35 35

e-mail: [email protected]