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The debt collection process

When an invoice is not paid by the due date, a formal process to recover the amount owing may be initiated. However, before a case is sent for debt collection, the customer will receive a request for payment. If the amount is not paid within two weeks, a “late payment” remark may be recorded against their name. Such a remark could affect the person’s ability to get a loan, mobile phone subscription, insurance, etc. The “late payment” remark will be deleted when payment is received.

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Debt collection – step by step

If for any reason you should experience payment problems, it is important that you contact those you have bought or borrowed something from when the deadline for payment approaches. Once the case has been sent to Kredinor for follow-up and collection, you should contact us. If the case goes to debt collection, costs for late payment will be added. Here you can see how much it costs if a case is sent for debt collection. Below you will find a general overview of what happens when in the debt collection process. Exceptions can be made in each individual case.

1. Invoice

An invoice is a document that confirms a sale on credit between two parties, and contains an explanation of what has been purchased, the price to be paid and other payment terms. The invoice due date is the deadline for when the invoice amount must be paid.

2. Reminder

If you do not pay the invoice by the specified due date, you may receive a reminder. If you have sold something, you are not required to send a reminder under the Debt Collection Act. However, if a reminder is sent, it must have at least a 14-day payment deadline. A reminder fee cannot be charged until at least 14 days after the due date on the original invoice.

3. Debt collection notice

A debt collection notice is a warning that is sent before the invoice is transferred to debt collection, and will have at least a 14-day payment deadline. If the seller does not send a reminder, the debt collection notice may be the only reminder issued after the due date on the original invoice. Payment after due date on the debt collection notice may lead to costs, such as debt collection fees and late payment fees, being added to the claim.

4. Payment request

If a debt collection notice is not paid, the case is transferred to debt collection at Kredinor. A payment request is sent in writing via a secure digital channel or by mail with a 14-day payment deadline. The payment request letter provides information on the basis for the claim and informs about appeal possibilities and further proceedings. Payment after the due date may lead to additional collection costs being added to the claim.

5. Legal action

Legal action is initiated in the event of continued non-payment, and may result in the case being brought to court for legal collection by the bailiff or to the conciliation board. This will lead to additional costs in addition to the original amount, because this process requires a lot of resources.

6. Payment remark on your financial record

A payment remark is a serious action. For a person, a payment remark can be registered 30 days after legal action was initiated. For a business, it can be registered faster, only 30 days after the invoice was transferred to debt collection.  This means that the non-paying individual or business will be listed in an official database compiled by a company providing credit information. It can affect one’s ability to get a loan, buy a mobile subscription, insurance, etc. It may cause job applications to be rejected too. The payment remark will be deleted as soon as payment is received by the debt collection agency.

7. Conciliation Board decision

In the event of disagreement about the claim, the case may be sent to the Conciliation Board as a complaint. The Conciliation Board is the lowest civil court in Norway, and their task is to help resolve disputes in a quick and cost-effective way. The party who either does not attend the conciliation meeting or loses the case must cover the costs incurred on the day of conciliation. The result is final and therefore legally binding.

8. Enforcement by the bailiff

Following a final decision by the Conciliation Board, Kredinor may turn to the bailiff to get the amount due paid. The bailiff has the authority to initiate actions such as forced deductions from salary or social security benefits, or obtaining money through a mortgage on real estate or other assets. If the bailiff is required to enforce the Conciliation Board’s decision, additional costs will be incurred. These costs will be added to the original claim.

9. Forced sale

If the claim remains unpaid, Kredinor may demand the money be obtained through the forced sale of, for example, real estate. This means that a mortgage on property or chattels is released and forcibly redeemed to cover the paid claim. A forced sale leads to significant costs, which is why the parties most often agree on a solution to avoid such a drastic step.