Debt recovery in Denmark is not an easy task. A significant number of creditors who are affected by this problem wonder where to seek support to recover their money. The process becomes even more complicated when dealing with international debts. Although debt collection in Denmark is based on common principles, there are specific regulations and procedures in the country. Danish legislation and business culture are different from other countries, which can make the debt recovery process more difficult. Denmark, being a member of the European Union, follows common legal norms, but local laws and debt collection practices have their own unique characteristics. If you are having difficulty recovering debts in Denmark, it is advisable to seek professional help. We offer specialized debt collection services throughout Denmark.
The debt recovery process in Denmark involves two main phases:
I. Pre-court phase - we aim to resolve the case without court intervention,
II. Judicial phase - the need for court involvement.
We prefer to avoid involving the legal system, as this usually involves additional expenses. Our goal is that every new debt collection case can start with a settlement, which is our priority.
Amicable action
In Denmark, as in other countries, the debt collection process begins with amicable actions, referred to as “soft” debt collection. Negotiation is a key element of this process, aimed at convincing the debtor to repay his debt. The first step the creditor should take in this case is to send a letter to the debtor reminding him of his obligation to settle the debt. The letter should specify the date by which the debtor should pay the debt, but no less than 10 days from the date of receipt of the letter. This document must be of an official nature so that it can later be used as evidence in court. If the debtor does not pay his obligation after receiving the reminder, the next step is to issue a summons for payment. The summons must state that legal action will be taken if the debt is not settled.
Call for payment
For debts of less than DKK 100,000, there is a simplified procedure known as “betalingspåkrav,” or summons for payment. This is usually a quick way of resolving the case, where debt collectors can begin collection upon receipt of such a summons. This path is usually chosen for small debts, when there is certainty that the debtor will not dispute his obligation before the bailiff. The documents are filed with the relevant district court, where the case will be heard by the bailiff court.
Legal action
If amicable debt collection in Denmark fails, legal action is required. The creditor must prove the debtor's guilt so that the court can issue an enforcement order to recover the debt from the debtor's assets. Civil debt cases should be referred to the appropriate district court. Depending on the severity of the case and the amount of the debt, the case may be referred directly to the Supreme Court, although such cases are rare.
You should consider filing for debt collection in situations where the employer fails to pay last month's salary or outstanding vacation benefits after an employee has been laid off. In Denmark, leave is unpaid, so employees who take leave receive a portion of their annual salary. It also happens that an employee does not receive his or her due salary despite having worked for several months. In such cases, it is important to take immediate action.
Even if you have limited experience with Danish law or are unfamiliar with local regulations, this is not a problem. Our goal is to prevent fraud and exploitation of others. We will help you recover all outstanding payments, taking all possible measures to ensure that debtors pay their debts.
The value of debt recovery in Denmark depends on several significant aspects:
- The amount of the debt.
- Court costs, which vary annually.
- Whether the collection will be extrajudicial or judicial.
- Whether enforcement will be carried out by a bailiff.
- The ability to persuade the debtor to repay voluntarily by sending a formal letter informing him of the possibility of collection action.
It is important that the debtor always bears the court costs, not the creditor.
Among small and medium-sized enterprises, the main concerns about starting foreign debt collection usually stem from communication difficulties and language barriers. Additional factors are uncertainty about costs and unfamiliarity with foreign legal systems and regulations. In terms of the sequence of actions, international debt collection is similar to domestic debt collection, where diplomatic methods are tried first, before taking court action if earlier ones are unsuccessful.
If you don't feel sufficiently prepared, using the services of a debt collection company to conduct debt collection abroad may be the best solution. With the right tools and support from professionals, you can focus on running your business without the added stress of dealing with dishonest debtors.
The duration of debt collection abroad is variable and difficult to predict. The process can be prolonged, especially when courts and bailiffs are involved in the collection of claims. The debtor's attitude and willingness to cooperate, relationships with foreign partners, the debtor's financial situation, local legal procedures and the amount of debt to be recovered are crucial. In addition, the overall context of the situation is important.
The effectiveness of debt collection depends on the effectiveness of the legal and judicial system of the country where the process takes place, especially the courts. In the case of debtors from European Union countries, the European Order for Payment (ENZ) may have added value, however it is not valid in Denmark. Time is also an important aspect of foreign debt collection. The longer a debt remains unpaid, the more difficult it is to recover.
A debt collection company is obliged to inform you when a debtor may declare bankruptcy, undergo restructuring, or simply have no assets that can be enforced.
If you decide to pursue debt collection abroad on your own, you may encounter ineffective communication with the debtor, a lack of knowledge of applicable laws abroad and complicated procedures. In such situations, a debt collection company or a specialized law firm dealing with foreign debt enforcement can help.