What does a debt collection process in Finland look like?

The creditor can send the first payment reminder after 14 days from the bill’s due date at the earliest. The second payment reminder is allowed to send after 14 days from the sending of the previous reminder.

If the debtor hasn`t paid the bill after the creditor’s payment reminders, the creditor has right to transfer the collection to a professional collection body such as a collection agency that continues the collection process by sending a payment demand.

Some bills, such as tax bills and certain insurance bills, are directly enforceable. The creditor can request enforcement without a court’s decision on the matter.

If the debt is not directly enforceable and the debt still remains unpaid after a payment demand has been issued and there is no agreement on the payment plan, the creditor or the collection agency may apply for a decision or a ruling from the District Court. This is done by filing an application for a summons with the District Court. The District Court will establish the creditor’s right to collect the debt and order the debtor to pay it.

If the debtor fails to abide the District Court’s decision voluntarily, the decision can be executed through enforcement. The creditor must submit an application for reinforcement to the enforcement authorities.

In debt enforcement, the amount of income and property seized will be such that it will cover the debt payment. The general rule is that movable assets are seized before immovable assets. In most cases, it is the debtor’s earnings, pension or business income that will be seized. Customary household effects are never seized.

Are there options to “freeze” or secure debtor’s redress objects?

Precautionary measures can be enforced if it is probable that the creditor has a distrainable debt due from the debtor or a prior right to given property and there is a danger that the debtor will act in such a way as to jeopardize the debt owed to the creditor or the creditor’s right.

If precautionary measures prove to have been unfounded, the creditor is liable for damage caused to the debtor as a result of the measures. That is why the creditor must lodge security with the bailiff before precautionary measures can be enforced. The debtor can prevent precautionary measure by lodging from being enforced by lodging security.

Property of all kinds can be the subject of precautionary measures. The seizure of property is subject to the same rules and has the same legal consequences as distraint. Handling property which is the subject of a seizure order is a criminal offence.

Do you need to be assisted by an attorney at law in Finland?

To be assisted by an attorney at law is not mandatory, but debt collection through an attorney at law is usually more effective. The attorney at law can also ensure that good collection practice and law are obeyed during the process.

What are the costs of the procedure and are they eligible for reimbursement?

A summary procedure or dispute which has been decided by a default judgment, for which the information has been sent directly to the district court’s information system, the court charges EUR 65 court fee.

If the debtor challenges the debt for its grounds or its amount, moves the case into a normal trial. In the normal trial the court fee is EUR 260.

A higher cost than the court fees for a person who takes his or her case to court is usually the fee of a legal counsel. If the creditor is represented in the proceedings by a legal counsel, the creditor has the right to reimbursement of costs directly incurred to enforce the claim. These costs are also covered by the debtor.

Following lists the maximum rates for representing legal counsel in cases where the debtor is a consumer:

-for a debt below EUR 300, the basic rate is EUR 50 and the high rate is EUR 80

-for a debt between EUR 300 and EUR 1 000, the basic rate is EUR 80 and the high rate is EUR 120

-for a debt over EUR 1 000 or if it is a question of eviction, the basic rate is EUR 110 and the high rate is EUR 160.

When the debtor is not a consumer, the legal counsel’s fees can be reimbursed in a diminished amount in case the court finds that the fees actually paid by the creditor are excessive.

In the enforcement phase, the bailiffs collect different kind of fees. The scheduled fee is levied for each payment accumulated on the debtor’s debts. The amount of the fee depends on the amount of the payment. For example, if the collected receivable is up to EUR 14, scheduled fee is EUR 2,50. If collected receivable is over EUR 8400, scheduled fee is EUR 210.

If the debt cannot be collected from the debtor because of lack of means or some other reason, or if the creditor withdraws their application, a processing fee is EUR 10 in a regular enforcement matter and EUR 5 in a limited enforcement matter.

The creditor is liable to pay a disbursement fee for each sum disbursed to them. The fee amounts to 1.45 per cent of the disbursed amount, but no more than EUR 5000 per disbursement.

What is the term of the procedure?

Execution proceedings might take from several weeks to several years depending on the debtor’s amount of assets and salary and other factors such as is legal proceeding needed in the case.