Debt collection in Sweden

The debt collection procedure in Sweden begins with an assessment of the debtor’s solvency, his field of activity, the history of the company, the availability of documentary evidence of the debt, current court cases and enforcement procedures, as well as the possibility of challenging the debt. This assessment determines the strategy that will be used on behalf of the client during the collection process.

If the debtor does not have current court cases or outstanding court decisions on debt collection, and he is actively engaged in commercial activities, then it is advisable to use the stage of out-of-court debt collection.

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

Interaction with the debtor begins immediately after sending the notification by mail, email, telephone or instant messengers. This process involves intensive communication with the debtor in order to apply constant pressure. The main task is to establish contact with key decision makers to achieve speedy debt repayment.

The average time for unofficial out-of-court collection is up to 60 days (except in cases where an installment plan for debt repayment has been agreed upon). If this stage does not bring the expected results, or after an initial analysis it becomes clear that it is not applicable, you should proceed to recovery through the court.

Before initiating legal action, you should pay attention to the statute of limitations. The general statute of limitations for debt collection is 10 years. If the demand for payment of a debt concerns a product, service or other utility that the trader, in his professional activity, provided to the consumer primarily for individual use, then the statute of limitations is 3 years. The law prohibits the parties from changing the above limitation periods in their agreement. If the specified period expires, the creditor loses the right to collect his claim. The running of the limitation period is considered interrupted if the debtor partially pays the debt, interest or acknowledges the claim in another way. Also, the period may be interrupted if the debtor receives a written demand or a written reminder from the creditor. After performing one of the specified actions, the statute of limitations is interrupted and begins to count again.

Swedish legislation provides for the following options for judicial debt collection:

General court proceedings are carried out by filing an application for a summons, after which the court decides to initiate a case and conducts preparations for the case. 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, the court makes a default judgment. Moreover, if the defendant is absent from the meeting during preparation, and his attendance was recognized as mandatory, then a decision in absentia is made in favor of the plaintiff, if the plaintiff requests it. If the defendant provides an answer, the case will proceed to the main hearing.

The main hearing must be conducted without interruption. Unless the main hearing requires more than three days, it will be held within one week. In other cases, hearings must last at least three days a week. As a result of consideration of the case in the main hearing, the court makes a decision, which becomes final after the expiration of the period for appealing it.

*A decision in absentia cannot be appealed. If the parties during the trial agreed orally or in writing not to appeal the decision made in connection with the dispute, then a subsequent appeal is not allowed.

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 three weeks from the date of the decision of the court of first instance. In order to exercise the right of appeal, the interested party must declare an intention to appeal. The consideration of the case in the court of appeal, as a rule, takes place in the main hearing with the summoning of the parties. 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 Sweden within four weeks from the date of announcement of the decision of the court of appeal. Consideration of a case in the Supreme Court, as a rule, takes place in the main hearing with the summons of the parties. 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.

The legislation provides for the possibility of using the European Payment Order procedure, which is applicable to cases of undisputed monetary claims between parties from the countries of the European Union (with the exception of Denmark). To obtain a European payment order, you must fill out a standard application form and submit it to the court. The court accepts the payment order in closed session and sends it to the debtor, after which the debtor has 30 days to file its objections with the court. If the debtor files an objection, the court summons the plaintiff to hear his position on the case and, if it considers the objection to be justified, cancels the payment order. In this case, the case is subject to consideration in civil proceedings. If the debtor does not submit any objections to the court, the payment order acquires the force of a final decision. The European Payment Order is recognized in all EU member states (except Denmark).

After receiving the final judgment, you must present it to the bailiff for enforcement. Foreclosure of the debtor’s assets can only take place if the amount that can be calculated for the proceeds from the sale of assets, after deducting costs, produces a surplus. 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, management of collateral, seizure and allocation of a share in joint property.

If the debtor has signs of insolvency (when the debtor cannot legally pay his debts, and this inability is not only temporary), the option of bankruptcy proceedings for the debtor should be considered. To implement this procedure, the creditor must first send the debtor a request for payment of the debt with warning of the initiation of bankruptcy proceedings. As part of the bankruptcy procedure, the court has the right to prohibit the debtor from traveling abroad, and this right also applies to the management of the debtor and persons who resigned a year before the start of the bankruptcy procedure. If, during bankruptcy proceedings, the bankruptcy trustee determines that there are reasonable grounds to believe that the controlling persons of the debtor have made an illegal distribution of profits or other illegal payment, or caused losses to the debtor company, then the court may obligate such persons to return the profits, payments or damages to the debtor . If the debtor’s assets are not sufficient to fully repay the debt to the creditor, then this provision allows increasing the chances of collecting a larger amount of debt by returning the specified payments and compensating damages from the controlling persons of the debtor.

As an alternative to debt collection, the possibility of bringing the debtor or the debtor’s controlling persons to criminal liability for committing crimes against creditors should be considered. The Swedish Criminal Code contains a whole section of such crimes, among which it is necessary to highlight: the sale, donation or destruction of the debtor’s property in the presence of a clear danger of insolvency in order to avoid payments to the creditor through the forced sale of such property (unfair behavior towards the creditor); infringement of the rights of one creditor when the debtor pays a debt to another creditor, the repayment period of which has not come; intentional or negligent performance of accounting obligations.

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

# DEBT COLLECTION AGENCY SWEDEN

08.07.2024

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