Solicitor-assisted debt recovery

Collect the money you are owed by obtaining a judgement against your debtor and seizing the debtor’s assets

If you want to collect the money you are owed, the services of a debt collection agency or out-of-court debt recovery services are not necessarily the only recourse. It is up to you to decide whether you want to collect the debt on an out-of-court basis through a collection agency or with the assistance of a legal institution/bailiff. Continue reading to find out why we strongly recommend the latter option.

OUT-OF-COURT DEBT RECOVERY THROUGH A DEBT COLLECTION AGENCY

If you decide to recover your debt through a debt collection agency, this actually means that you will be seeking a recovery of outstanding debts by circumventing the court or the services of a bailiff, i. e. without interference from state institutions. This method of debt collection is usually a long, slow and at times fruitless process because debt collection agencies do not have any exclusive power to enforce your right to receive payment without the intervention of a court or the assistance of a bailiff. If you opt to use this method, the process would unfold as follows:

The payment of an invoice is due on a specific date.

If 14 days have passed since the due date, you send a reminder notice (Norw. purring) to your debtor, extending the payment date by 14 days and additionally claiming a statutory charge in the amount of NOK 70.

If the debtor is 28 days past the payment date, you send a warning letter that you will seek debt recovery through a debt collection agency (Norw. inkassovarsel), indicating a new payment date extended by a further 14 days and claiming an additional statutory charge of NOK 70.

If the debtor is 42 days past the payment date, you send a warning letter demanding the payment of the overdue invoice (Norw. betalingsoppfordring) with a time limit of another 14 days and add a statutory charge in the amount of NOK 210.

If you have not received your payment 56 days past the due date, your debt collection agency may start the debt recovery process (Norw. lett inkasso) – a more expensive option for the debtor. This process may be initiated if at least 28 days have passed since the due date indicated in the warning letter for the payment of the overdue invoice (Norw. betalingsoppfordring). In this case, the extra charge can now be increased to, for example, NOK 700; however, in general, this amount depends on the size of the outstanding debt.

If the debtor is 84 days past the payment date and if more than 28 days have passed since the due date indicated in the warning letter for the payment of the debt (Norw. betalingsoppfordring), the debt collection agency may start the debt recovery process (Norw. tung inkasso) – an even more expensive option for the debtor. The extra charge can now be increased to a reference amount of NOK 1,400; however, in general, this amount depends on the size of the outstanding debt.

If 6 months have passed since the day the warning letter for the payment of the overdue invoice was sent (Norw. betalingsoppfordring), you may no longer initiate the debt recovery process through the court or with the assistance of a bailiff. If you want to do this, you must send a new warning (Norw. betalingsoppfordring) for the payment of the overdue invoice and wait until a payment period of 14 days elapses.

Debt collection through court proceedings or with bailiff assistance

If you decide to seek debt recovery through court or with bailiff assistance, you will have to submit your claim for the overdue payment to a court/dispute committee or directly to a bailiff’s office in order to obtain grounds for enforcement. You can usually bring your debt collection claim to the court or dispute committee just 15–16 days after the due date stated on the initial invoice. Compared to debt recovery through debt collection agencies, the proceedings would unfold as follows:

The payment of an invoice is due on a specific date.

A day after the due date indicated on the invoice, you send the following warning letter to the debtor: “WARNING NOTICE BEFORE THE INITIATION OF LEGAL DEBT RECOVERY INCLUDING SEIZURE OF ASSETS PURSUANT TO ARTICLES 4–18 AND ARTICLES 4–19 OF THE ENFORCEMENT ACT” (a sample letter is available in the section entitled “Have an unpaid invoice?”). The time limit for the payment must be at least 14 days.

After 15–16 days have passed since the due date, this request may be submitted to a court, a dispute committee or a bailiff’s office.

Why is debt recovery through a debt collection agency not the best option?

Most people seek to recover overdue payments by entrusting this task to a debt collection agency. On behalf of their clients as creditors, these agencies administer the claim. But does this method really pay off? If the amount owed to you is substantial, then the answer to this question is NO!

Firstly, this debt collection process produces no legal implications for the debtor. This means that the debtor’s finances will not be subjected to any restrictions and, as a result, the debtor will be in no rush to pay you.

Secondly, this collection process delays the resolution of the claim. What matters to you most is being able to collect the money that is owed to you. But while this process is unfolding, you will not have access to this money or any claim security.

More time has passed, and you still have not received your payment. All this waiting may cost you a lot of money. If the debtor’s assets are not seized, you might end up (e. g. if the debtor goes bankrupt) at the bottom of a list of creditors trying to recover their debts. After a period of 3 years, simple court claims that have not led to a court judgement or the seizure of the debtor’s assets are statute-barred, and you are no longer allowed to collect this debt.

Aside from the above, many people believe that debt collection agencies have the right, e. g., to seize debtors’ vehicles or other property. Unfortunately, this is not the case. Debt recovery does not entitle debt collection agencies to seize any property or enforce your rights to receive payment.

Need a money-back guarantee? Start a legal debt recovery and obtain a seizure of the debtor’s assets

If your debtor is unable to pay an invoice, this usually means that they have several creditors seeking debt recovery or, even worse, they are going bankrupt. For this reason, you might have very little time on your hands!

The earlier you seek legal debt recovery and ensure seizure of the debtor’s assets, the easier it is for you to recover the money you are owed. A seizure of assets (blocking the debtor from selling or transferring assets) prevents the debtor from using these assets until they pay the money they owe you.

Contrary to popular belief, there is no requirement that says debt recovery must first be addressed on an out-of-court basis or through a debt collection agency before a claim is submitted to the court, a dispute committee or an enforcement agency, i. e., the bailiff’s office, and in cases where a money claim is disputed, there is no point whatsoever in seeking debt recovery with the assistance of a debt collection agency because the case must first be submitted to a dispute committee or a court of first instance either way.