Read a lawyer’s tips to reduce defaults on invoices

Businesses are paying invoices more slowly and being liquidated more. Credit risks have grown. Moderation is not the most important thing when recovering a debt. In debt recovery, the magic word is speed.

Many business owners say that clients do not pay their invoices on time. A delay in payments could be a sign that the company is in payment difficulties or unwilling to pay.

Your business’s invoice is unlikely to be the only one your client has failed to pay by the due date. It is in your client’s interests to pay the invoices in the order that suits it best. This behaviour slows down how fast you receive your money, and if your client becomes insolvent, you may not receive it at all.

We have a cure for a client’s unwillingness or inability to pay.

The cure is recovering the debt directly in a district court. Believe it or not, the advantages of this route are speed and cost.

Legal collection

Legal collection is a more effective way of recovering the debt than using traditional debt collection agencies.

In one case, the debt collection fees added onto the invoice were €420, nor had the debtor paid the invoice in spite of the agency’s threats. Wouldn’t it be reasonable if the debtor were to pay their debt directly to the creditor instead of paying debt collection fees? Procedures like corporate debt collection (“tratta”) and publishing them in the newspapers do not make debtors’ lives easier.

Collection agencies have their place, and they do quality debt collection. However, if a client cannot pay, the agency cannot do anything other than threaten them, and the case will have to be brought to court no matter what. Why not do that in the first place? Remember that in debt recovery, the magic word is speed. The more time passes, the less certain you are to recover what is owed to you.

In court, you can get a unilateral judgment, that is, a decision that allows the debt to be recovered at source, in a matter of weeks! It costs €65. After the court’s ruling, we can start having your money forcibly removed at source, unless you have already received it.

Recovery at source

Recovering the debt at source costs the creditor less. This means the creditor has more money to pay the debt instead of spending it on a collection agency’s fees.

When debt is recovered at source from a debtor, the money is distributed in the order defined by law.

Effective and fast

The law about recovery of debt at source enables effective recovery of debt from a business’s income. The main rule is for all of a business’s income to be subject to recovery at source.

The National Enforcement Authority recovering the debt at source has broad rights to receive information about the debtor’s financial situation and the means to find it out.

The law requires a bailiff to take certain actions to establish the debtor’s financial situation. The creditor also has the right to ask the National Enforcement Authority about the progress of recovery at source.

A bailiff must conduct an investigation of recovery at source, in which the debtor is obliged to tell the truth about their financial situation. A recovery at source protocol is drawn up on this investigation. It is accessible to the parties concerned. The creditor has the right to receive a copy of the protocol, so, in practice, information about the debtor’s situation.

Can we help you? Contact us and ask more!

Markus Talvio

CEO, Jurinet legal firm

direct line +358 50 2590

markus.talvio@jurinet.fi

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