Debt Collection Agency Finland
Amicable Debt Collections Finland
1. General information
Cosmopolite Collections follow a collection process that is professional at all times with the objective of retaining the relationships between our clients and their debtors whenever possible.
Our staff of collection professionals carry out the first collection tier in-house. We relentlessly pursue debtors verbally and in writing within the bounds of federal and state laws.
1.2. Local agents
At the present time, we cannot offer a field service for visiting debtors in Finland. However, if the debtors wish to visit our office, we will gladly meet them to discuss a solution for their case face-to-face.
Cosmopolite Collections always charge interest to debtors calculated from the base rate set by the Finnish National Bank, plus 7.5% per year.
There are two alternatives:
- To calculate the interest rate as agreed between the creditor and the debtor
- To calculate the interest rate according to Finnish regulations based on the reference rate fixed by the National Bank of Finland (plus 7.5% per year).
This rate is fixed twice a year on 1st January and 1st July. The second alternative will always occur if the interest rate is not agreed between the creditor and the debtor.
From a cultural point of view, Finnish debtors are used to paying late payment interest.
1.4. Debt Collection Costs in Finland
In Finland, debt collection costs are chargeable to debtors, representing the creditor’s claim for late payment.
2. Legal collections Finland
2.1. General information
Entering into legal proceedings is only possible with an eight-day notice warning the debtor, including:
- Name of the creditor
- The specifics of the debt (e.g. interest rate, date, amount, etc.)
- A warning that non-payment will lead to legal action and further costs.
The debt needs to be determined to be enforceable. If the debt is undisputed, the bailiff will issue a payment order; this equals a judgment. If the debtor disputes the debt, no matter the reason or the seriousness of the dispute, the file is assigned for trial handling. If a judgment is obtained and the debtor does not pay accordingly, the file will be handed over to the bailiff’s court for execution.
2.2. Required documents
In order to apply the legal proceedings, Cosmopolite Collections need copies of the contract, invoices and a clear statement of account indicating payments and credit notes that have been booked regarding the outstanding invoices.
In the case of a regular lawsuit procedure, copies of the complete contractual documentation should be available, starting with the contract, orders, order confirmations, delivery notes and invoices. Basically, every step of the trading relationship should be provable by documentation.
In case of dispute, proof of the conversations between the creditor and the debtor should also be kept and provided to our lawyers.
In case of oral negotiations, we require the visit or negotiation reports and the names of the witnesses.
The regular lawsuit procedure is either initiated directly after the amicable collection has failed due to a dispute by the debtor or directly following the legal proceedings after the debtor appeals.
Usually a written pre-procedure is issued. Both the plaintiff and the defendant exchange opinions and proofs by letter until the judge has the impression of Finland having all relevant information needed in order to judge.
In this case, a hearing is scheduled, during which both parties must be present. After the oral hearing, the judge sets a date to publish the final judgments.
The parties will be informed about the outcome in writing by the responsible court.
2.4. Debt collection costs Finland
There are different fees that can apply during legal proceedings, making it difficult to predict the total cost.
In addition to this, costs of witnesses and/or experts might also arise. A cost estimation will be provided case by case should legal action becomes necessary.
2.5. Expected time frame
The average duration of a legal process is up to 18 months or longer, depending on the complexity of the case and the availability of the judge and lawyers on all sides.
2.6. Interest and costs in the legal phase
Extrajudicial interest and costs can be claimed as part of the outstanding amount during the legal proceedings. Normally the losing party has to bear the costs of the legal proceedings if the file goes to trial. In the case of a legal settlement, the parties normally bear their own costs for court fees and lawyers’ fees.
3. Insolvency proceedings
3.1. General information
The aim of the insolvency proceedings is to pay out all creditors with the same quota by liquidating the assets of the debtor company or collecting the enforceable income of the individual who is declared bankrupt.
There are two insolvency proceedings in Finland:
After the debtor or a creditor files for insolvency of the debtor, a preliminary liquidator is appointed to check if sufficient assets are available to cover the cost of the proceedings (court costs and costs of the liquidator).
If these costs are deemed to be covered, the insolvency proceedings start and a liquidator will be appointed; usually this is the preliminary liquidator. Otherwise, the court will reject the declaration of bankruptcy due to insufficient assets.
The creditors can then lodge their claims and take back any goods delivered under retention of title. After the proceedings start, lodging claims is possible within a given deadline.
The liquidator can either accept a lodged debt or dispute it. If the claim is disputed, the creditor may only file a claim in court to prove the justification of their claim when further documentation does not convince the liquidator to confirm the debt.
At the end of the proceedings, all creditors with confirmed debts will receive a dividend if enough assets are in the estate. Often the insolvency estate is closed with a very small or no dividend at all.
3.3. Required documents
In order to lodge a claim on a client’s behalf in undisputed claims, Cosmopolite Collections need copies of the outstanding invoices and an original signed power of attorney.
3.4. Expected time frame and outcome
The expected time frame for insolvency proceedings in Finland is one to five years.