Debt Collections In Norway

1.1 Amicable Phase

1.1.1 General

Collection Agency Service Norway pursues the collection process with a professional team and demeanor from start to finish. Our operation in Norway is based entirely in-house, with local collection experts and seasoned professionals who are determined to reasonably and amicably settle any outstanding debt on behalf of our clients. During this process, we will contact debtors via telephone contact and written correspondence to their primary business address or place of residence. It is the policy of Collection Agency Service Norway to strictly adhere to Norway’s state and federal laws governing collection, legal proceedings, enforcement, and execution.

In the event that a debtor disputes the accuracy of the debt that we have been asked to collect, Collection Agency Service Norway will examine all contractual documents between the parties, as well as documents like invoices, order confirmations, account statements, and payments, to determine the best course of action. Even during a dispute, it is the goal of our professional collection team to remain in the amicable phase of collections.

Should we need to investigate a debtor’s financial situation further, we will rely on our in-house legal team to perform such investigations. We will then use the results of those investigations to inform our clients about the best possible course of action.

1.1.2 Local agent

Collection Agency Service Norway does not currently have its own in-house operation that can perform field visits to the debtor’s main business office or private residence. Because we prefer to keep all of our operations in-house to ensure quality and control, we simply do not offer field visits as a service to our clients in Norway. Should this change, however, we will gladly inform our clients and discuss whether or not a field visit should be conducted to ensure the debt’s collection.

While we do not currently offer visits to a debtor’s location, we do encourage any debtor we contact to visit us at our headquarters. While we are rarely taken up on such an offer, it is the policy of Collection Agency Service Norway to use any meeting with the debtor to learn more about the debtor’s assets, financial situation, business transactions, and their ability to pay the debt in full.

1.1.3 Interest

Collection Agency Service Norway maintains a policy of always charging interest on an outstanding debt. This rate is generally applied in a standard way, using a base rate set by the Norwegian National Bank plus a 10 percent surcharge. Any interest charge to a debtor will be charged on a daily basis.

In some cases, a different interest rate may be enforced against a debtor. If the debtor and creditor are under a contract that stipulates a different interest rate for past due payments, then it is the policy of Collection Agency Service Norway to enforce that rate instead. Otherwise, we will charge the maximum interest rate as permitted by the Norwegian regulations that govern debt collection.

Norwegian debtors are used to paying interest on their debts, and typically do not view any such fee as a point of negotiation. For this reason, it is highly unlikely that Collection Agency Service Norway would lower the interest rate below the maximum levels allowed by federal law or the existing contract between the parties.

1.1.4 Debt collection costs

Norway does permit any costs associated with debt collection to be included as part of the debt’s overall balance. These costs will vary based on the overall size of the debt, as well as how old the debt is and the urgency with which it must be collected. Debtors in Norway are used to paying all collection fees associated with an outstanding debt, and this amount will likely never be negotiated or reduced in order to obtain full payment of the balance owed by the debtor.

1.2 Legal Procedures

1.2.1 General

Debtors must be notified by the creditor if legal action may be taken against them in an effort to recover the debt. This notice will be presented in court as a way of proving the debtor was notified and, to be considered valid, it must contain the following key pieces of information:

– A notice of 14 days to satisfy the debt
– A notice that legal action will commence after 14 days
– The full name of the creditor
– A description of the debt’s full amount and charges associated with the debt
– Warning that non-payment will lead to court costs and other expenses to be paid by the debtor
– A determination as to whether or not the debt is enforceable

If the debtor satisfies the debt after receiving a notice of legal action, then Collection Agency Service Norway can suspend any pending legal proceedings as well as any other collection procedures. If the debtor does not pay or respond to the notice, or if they file a dispute of the debt after receiving the notice, then the traditional lawsuit procedure will commence as described in the original notice. In this case, a judgment is typically granted by a judge against the debtor for the full amount of the debt, plus any costs claimed by the creditor during the filing for the judgment. If the judgment is not paid by the debtor within a reasonable period of time, the file will be passed on to the Norwegian Bailiff’s Court for full execution.

Enforcement of the debt can happen in a number of ways, but the hardest to pursue is the garnishment of wages. This process will see the debtor’s employer withholding all, or a portion of, the debtor’s wages. Those wages will then be sent to the creditor as payment toward the debt until the judgment has been fully satisfied.

1.2.2 Required documents

To begin the legal process against a debtor, Collection Agency Service Norway must be in possession of quite a few documents. These documents will serve as the first proof in the case, and are essential to being granted a hearing and further action against the debtor. Creditors should be prepared to provide the following series of documents:

– Copies of the contract between the creditor and the debtor
– Copies of invoices
– Copies of account statements, including payments or credits against the debt’s balance

If the case proceeds beyond the pre-legal written notice, and must continue as a traditional lawsuit, creditors will be required to provide a more extensive set of documents to Collection Agency Service Norway. Those documents include the following:

– Copies of the complete contractual documentation between both parties
– Copies of orders, confirmations, and delivery notices
– Copies of all invoices generated for the debtor
– Extensive documentation of the business relationship between both parties
– Documentation of any payment arrangements
– Documentation of any oral agreements or negotiations
– A list of experts or witnesses in case of oral agreements or a heavily defended dispute
– Copies of all letters or emails that may help the case succeed
– Documentation of any in-person visits to the creditor

1.2.3 Lawsuit

A lawsuit against the debtor can be pursued for a number of reasons. The most common reason for a lawsuit against the debtor is the simple failure of the amicable collection process pursued by the professional team at Collection Agency Service Norway. A lawsuit can also be launched if a debtor files a dispute against a debt, or if the debtor has appealed the legal dunning procedure and inherently disputed the debt’s amount or the creditor’s right to payment.

A written pre-procedure document is typically issued before the trial gets officially started. After the lawsuit has begun, the creditor and debtor will be required to exchange evidence and opinions with the court via postal mail until the judge has seen enough documentation to make an informed decision in the case. When the judge feels a ruling can be made, a hearing will be called at the court. This hearing is considered a required meeting for both the creditor and the debtor, and they must be present for the process to continue. After the hearing has concluded, the judge will set a date for his or her decision to be published to both parties. The decision will be sent to both the creditor and the debtor via postal mail, delivered from the court on official letterhead.

1.2.4 Costs

Costs incurred during the legal process depend heavily on the size of the debt being pursued by Collection Agency Service Norway. There are different fee schedules that apply to debts of various sizes, and cases of various levels of complexity. This makes it very hard to predict just how much any lawsuit will cost a creditor. Furthermore, the use of any experts or witnesses will greatly increase the amount of court costs paid during the lawsuit.

Because it can be very hard to estimate these costs universally, Collection Agency Service Norway maintains a policy of estimating court costs only on a case-by-case basis. Our clients can then use that information to decide whether or not they should proceed with the legal collection process or resume amicable efforts.

1.2.5 Expected timeframe

The legal process against a debtor is typically quite long in Norway, which makes it undesirable for a large number of creditors. Generally speaking, the shortest and most efficient lawsuits against creditors in the country take about 12 months. The duration of the case will be extended as it gets more complex, or if the judges and lawyers involved in the case have limited availability. As a case gets longer, it also gets more expensive, which is something all creditor should keep in mind.

1.2.6 Interest and costs in the legal phase

When a lawsuit is filed against the debtor, the creditor has the right to attach interest and collection fees that were incurred outside of the legal process itself. This is combined into the full outstanding balance of the debt, and judges rarely dispute these costs or eliminate them during the hearing process. Normally, the party who has lost the lawsuit is responsible for covering the full costs of the lawsuit if it proceeds to trial. This includes attorneys’ fees, document fees, and basic costs associated with using the court’s time and facilities.

If the parties agree to reach a settlement, and therefore drop the lawsuits altogether, it is standard procedure for both parties to pay for their own legal fees and court costs. This is typically non-negotiable.

1.3 Insolvency Proceedings

1.3.1 General

Insolvency proceedings in Norway are heavily tilted toward full liquidation of the debtor’s assets, largely in an effort to offer an equal dividend payment to the debtor’s creditors. There are procedures in place that deal with the discharge of debts, as well as the restructuring of the company’s debts in an effort to avoid liquidation, but these procedures are rarely used. Instead, many debtors proceed straight to liquidation via insolvency proceedings. Creditors should be aware of this, as it is their responsibility to be aware of such proceedings and file a claim to the dividend when appropriate.

In many cases, insolvency proceedings require the debtor to not only liquidate their assets, but also turn over some portion of enforceable income in order to boost the amount of the dividend paid out to the creditors who have filed a claim. This is also the case for those debtors who file for bankruptcy, and are declared to be fully bankrupt by the court.

Insolvency procedures in Norway are broken down into three different processes, including:

– Enforced Dissolution / liquidation of assets
– Reconstruction / restructuring
– Bankruptcy / full discharge

1.3.2 Proceedings

Either the debtor or the debtor’s creditor can file for the debtor’s insolvency. When this occurs, the court will appoint a preliminary liquidator. The job of this preliminary liquidator is to assess the debtor’s assets, capital, and other sources of income, in order to determine whether or not they’ll be able to sufficient cover the cost of the insolvency process itself. Those costs include not only the court costs associated with any legal proceeding, but also the costs of paying the appointed liquidator during the process.

If the appointed preliminary liquidator determines that the debtor’s assets are sufficient enough to cover court costs and liquidators’ fees, the insolvency proceeding will officially begin. If this process is not followed, however, the court reserves the right to reject the declaration of bankruptcy due to the debtor having insufficient assets to cover the costs of the legal process.

Once the insolvency process has begun in earnest, creditors are permitted to take back any of their goods that have not been fully paid for. Such actions are governed under Norway’s Retention of Title regulations. The creditors are also able to file claims against the debtor so that they can receive a portion of the dividend paid out at the conclusion of the process. The appointed liquidator can also choose whether goods should be returned to creditors via Retention of Title, or whether to pay creditors back for the value of the goods themselves. The court will set a deadline for all of these actions, typically no longer than 30 days in most cases.

It is the job of the appointed liquidator to review all claims filed by creditors and either accept or reject those claims. If a claim is rejected or disputed, the creditor has the right to review and re-file that claim with more extensive documentation that will help prove their case. If this resubmission does not convince the liquidator that the debt is valid, the creditor may submit the claim in court with even more extensive documentation. The judge overseeing the insolvency case will then either choose to accept the claim or reject it a final time. The creditor cannot file for a third review of their claim.

After the insolvency process has finished, those creditors whose claims were accepted by the appointed liquidator will receive a dividend of the liquidated assets and movable goods, so long as there are sufficient funds. In Norway, however, it is extremely rare to be paid any dividend after insolvency proceedings have concluded. In fact, most creditors never see any dividend at all.

1.3.3 Required documents when filing a claim

Insolvency laws in Norway are rather loose when it comes to proving the validity of the debt. Creditors will only need to submit a copy of all past due invoices in order to prove their right to a portion of the dividend. It will then be up to the appointed liquidator to determine whether the invoice is valid, or whether additional documentation should be submitted in order to verify the debt and substantiate the claim.

1.3.4 Expected timeframe and outcome

Insolvency proceedings in Norway are actually very quick, especially when compared with other European countries. The average insolvency case in the country can be as short as one year, though most cases last up to three years. In the case of insolvency estate cases, most creditors walk away from the proceedings without having received a dividend at all. For other cases, the long wait during proceedings does often result in at least a small dividend.