Execution base

An enforcement basis is legally also called a foundation. An enforcement basis can be a judgment or a domestic settlement that, for example, establishes an amount that a debtor owes a creditor.

The foundation forms the basis for recovery - for example through the bailiff's court.

How do you get an execution base?

There are several ways you can achieve an execution foundation.

The enforcement basis, or foundation, typically comes from a judgment in the bailiff court or from a signed debt declaration where the debtor acknowledges his debt in writing to one or more creditors.

Legally, a judgment is considered the same as an admission of debt. Therefore, having a signed document in which the debtor acknowledges the debt can be extremely valuable to a creditor or lender.

Many people mistakenly believe that an invoice can form the basis for an enforcement basis in a debt collection case. However, this is not legally correct. The invoice is simply documentation of what was sold.

Why is an enforcement basis important to me as a creditor?

"Does it matter if I have an invoice, judgment or debtor statement for my receivable?" is a question we often get asked - and the answer is no.

When we talk about debt collection and debt, we also talk about limitation. The vast majority of debts and defaulted debts are time-barred in Denmark, with a few exceptions.

An invoice claim becomes statute-barred after 3 years. After that, the creditor can no longer make a claim, and the creditor cannot, for example, transfer the case to a debt collection agency, a lawyer or a bailiff.

On the other hand, debts with an enforcement basis become statute-barred after 10 years. In other words, you as a creditor have a significantly longer period to pursue your claim. This means that you as a creditor, debt collection company or lawyer can work on your debt collection cases for a much longer period.

How important is it to go from 3 to 10 years?

With an enforcement basis on your debt collection cases, you go from a statute of limitations of 3 years to 10 years.

This means you can pursue your claim for a much longer period of time. But what does it really mean?

In practice, whether you can pursue your claim for another 7 years makes a huge difference. Often a debtor's financial situation will change over time, increasing the likelihood that the debtor will eventually be able to pay off or pay the full claim to you as a creditor.

Interruption of the statute of limitations

All invoice claims are time-barred after 3 years - unless you have an enforcement basis such as a judgment, a signed contract or similar. In that case, your claim will only expire after 10 years.

Should you as a creditor find that your invoice claim against a debtor is, for example, 2.5 years old, you will have 6 months left to pursue the claim before it expires.

Fortunately, as a creditor, you have the option to extend the statute of limitations. This is legally called an 'interruption of the statute of limitations'.

Interrupting the statute of limitations can be done by obtaining a basis for enforcement - for example, by bringing the case to the bailiff's court or by asking the debtor for a debt declaration.

As a debt collection company, we would always advise you to do this.