Debt recovery

A receivable is a right to receive a claim or payment from a debtor, customer or borrower. A receivable can arise in many ways, but will typically arise from a trade between two parties (typically an invoice), a loan receivable or a tax receivable.

The typical receivables in Danish companies will therefore arise when a company(creditor) has sold a product or service to a customer (debtor) - and thus sends an invoice for its work or product. In other words, the invoice is the basis for the receivable.

Receivables typically consist of a financial claim, but can in principle also consist of other claims - although not as often as financial claims. A synonym for claim is "to demand" something or to be owed something.

A synonym for debt recovery would typically be debt collection - or the word debt recovery. For example, you may also come across the Debt Collection Act.

How can you collect a debt?

There are many good ways to collect a debt - and in Denmark there are basically three different ways of debt collection: self-collection, where the company itself is responsible for all or part of the process; debt collection with the help of a debt collection company / debt collection lawyer; or with the help of the bailiff.

Whether you choose to handle debt collection yourself or let a debt collection company/lawyer handle the process, the methods will often be the same - but the lawyer or debt collection company will often have far better processes, systems and weight in their work - and this often has a great effect on the debtor.

In Denmark, the collection of a debt, such as an invoice claim, is often done by sending out a reminder letter. The reminder letter may be subject to a reminder fee - and may be sent a maximum of three times, with a reminder fee of DKK 100 each time.

If the debtor does not respond to the creditor or their lawyer or debt collection company, it is possible to start a collection process: debt collection.

The debt collection process must start with a debt collection notice, where the debtor is notified of an upcoming collection process if payment is not made. The debtor has 10 days to pay after receiving the debt collection notice.

If the debtor does not respond after the 10-day payment deadline, the debt collection process can be started - by the creditor, the creditor's collection company or the creditor's lawyer.

Who can handle debt collection in Denmark?

In Denmark, the area of debt collection is regulated by, among other things, the Danish Debt Collection Act - and Danish legislation restricts who can be responsible for collecting debts.

Not just anyone is allowed to handle debt collection in Denmark - which is why it is limited to authorized debt collection companies, lawyers and creditors themselves.