Debt collection in Finland

The debt collection procedure in Finland starts with an assessment of the debtor’s solvency, its field of activity, company history, availability of documentary evidence of the debt, current court cases and enforcement proceedings, as well as the possibility of disputing the debt. This assessment determines the strategy to be used on behalf of the client in the collection process.

If the debtor has no current court cases or outstanding court judgments for debt collection and is actively engaged in commercial activities, it is advisable to use the out-of-court debt recovery stage.

This stage involves active negotiations with the debtor to reach an agreement on payment of the creditor’s claims or other possible settlement options (e.g., return of goods, transfer of debt to a third party, exchange of services or goods). 

Engagement with the debtor begins immediately after the notice is sent by mail, email, telephone or messenger. This process involves intensive communication with the debtor in order to apply constant pressure. The main objective is to contact key decision makers to achieve the earliest possible recovery of the debt.

The average time for informal out-of-court recovery is up to 60 days (unless installment repayment is agreed). If this stage does not yield the expected results, or after initial analysis it becomes clear that it is not applicable, it is necessary to proceed to judicial recovery.

Before initiating legal action, you should pay attention to the statute of limitations. The general statute of limitations for debt collection is 3 years. A monetary debt based on an agreement by an individual expires no later than 20 years from the date of maturity of the debt. If the creditor is an individual, the statute of limitations is 25 years (The limitation periods specified in the previous two sentences cannot be interrupted.) The legislation does not provide for the possibility of changing the specified limitation periods by agreement of the parties. If the specified period expires, the creditor loses the right to claim and the debt is considered expired. The running of the statute of limitations is considered interrupted if the debtor commits actions indicating recognition of the debt, for example, partial payment of the debt or other recognition of the debt, or the parties sign an agreement on changes to the terms and conditions of payment of the debt. After performing one of the specified actions, the statute of limitations is interrupted and begins to count again.

Finnish legislation provides for judicial collection of debt in the form of general legal proceedings.

General court proceedings are carried out by filing an application for summons, after which the court decides to initiate a case and prepares for the main court hearing. Having accepted the claim for consideration, the court immediately sends a summons to the defendant and sets a deadline for the defendant to respond to the claim. If the defendant does not provide an answer within the allotted time, or his answer does not contain a substantiated objection, then the court makes a unilateral decision without the need to continue preparation for the trial. If the defendant provides an answer, the case is subject to consideration in a preparatory or main hearing. The preparatory hearing may be held by telephone or using a technical method of communication in which the participants in the process have voice communication with each other, if the court deems this appropriate.

During the main hearing, the case must be heard continuously. If the main hearing cannot be held within one day, the hearing may be suspended. The review continues on consecutive days. If this is not possible, the case must be processed at least two working days per week. In an extensive or complex case, the main hearing may be suspended for a maximum of three business days to allow the parties involved to prepare to present an oral closing statement. As a result of consideration of the case at the main hearing, the court makes a decision, which becomes final after the expiration of the period for appealing it.

An interested party who is not satisfied with the decision of the court of first instance has the right to appeal it on appeal within 30 days from the date of the decision of the court of first instance. In order to exercise the right of appeal, the interested party must, within seven days from the announcement of the court decision, declare its intention to appeal. The consideration of the case in the court of appeal, as a rule, takes place in writing. The main meeting is held at the request of the interested party or on the court’s own initiative. After considering the case at the main hearing, the appellate court makes a decision, which comes into effect from the moment it is announced.

The decision of the court of appeal can be appealed, but to do this it is necessary to request permission to appeal from the Supreme Court of Finland within 60 days from the date of announcement of the decision of the court of appeal. Leave to appeal can only be granted if, from the point of view of the application of the law in other similar cases or due to the uniformity of judicial practice, it is important for the case to be referred to the Supreme Court for decision, or if there is a special reason for doing so because of an admission in the case judicial or other error on the basis of which the decision should be reversed. Under certain circumstances, the Supreme Court may order that execution of the appellate court’s decision be stayed pending the outcome of the Supreme Court’s review of the case.

The case is considered on the basis of written materials from the court proceedings, unless the case provides for an oral hearing. If necessary, the Supreme Court will hold an oral hearing at which the parties, witnesses and experts may be heard and other explanations may be received. Oral proceedings may be limited to part of the issue on appeal. An oral hearing takes place with the parties summoned under the threat of a fine if they fail to appear. As a result of consideration of the case, the Supreme Court makes a decision that is not subject to further appeal and comes into force from the moment of its announcement.

After receiving the final judgment, you must present it to the bailiff for enforcement. A court decision may be brought for execution within five years from the date of entry into legal force. As part of the enforcement of a court decision, the creditor’s claims can be satisfied through the seizure and write-off of funds from the debtor’s accounts, seizure of the debtor’s movable and immovable property with their subsequent sale, seizure of shares and shares in companies, seizure of income from business activities, seizure and allocation of shares in joint property.

If the debtor has signs of insolvency (when the debtor is not temporarily unable to pay his debts when they fall due), the option of bankruptcy proceedings for the debtor should be considered. The creditor can use this procedure if his claims are based on a court decision that has entered into legal force or on the basis of an obligation signed by the debtor, which the debtor does not dispute or such obligation cannot be questioned. In this case, the creditor can file a bankruptcy petition (if it is impossible to enforce the court decision) within six months before filing the bankruptcy petition in enforcement proceedings, it turns out that the debtor does not have the funds to fully repay the claim. Before going to court, the creditor is obliged to send the debtor a payment notice of the intention to go to court regarding the debtor’s bankruptcy. If the debtor does not pay the payment notice within the required period, the creditor has the right to go to court. After the commencement of bankruptcy proceedings, the court may ban the debtor from leaving the country. As part of the bankruptcy procedure, the debtor is obliged to provide the bankruptcy manager with information about his assets, receivables, and transfer access to the debtor’s property and premises, information systems. If the debtor fails to fulfill this obligation, he must compensate the creditor for the damage caused. As part of the bankruptcy procedure, the debtor’s assets/receipts from the sale of these assets will be distributed among creditors in accordance with the rules of the insolvency process.

If you have any questions or need support for international debt collection in the Republic of Finland, our company is ready to provide its expert assistance to effectively resolve your financial issue. Please contact us to receive additional information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY FINLAND

01.07.2024

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