Debt Collection in Latvia
The debt collection agencies and law firms in Latvia are more often requested now than in the past, mostly because of the economic crisis the country is facing. The unpaid duties can also be recovered by specific Latvian law firms with experience in the field.
Because of the economic crisis, many entrepreneurs face themselves with the impossibility of paying their claims. The creditors are also facing the impossibility of paying their own suppliers because of the lack of funds resulted by the unpaid debts.
In order to avoid all the above, the claims are usually requested no later than one month from the due time.
In the first instance, the creditors are trying to reach a settlement with the indebted. This settlement consists in agreements made with the debtor related to the way of paying the claims, such as equal installments or paying in full just a part of the due amount.
Litigation for debt recovery
If this procedure is not successful, the creditor can contact a debt collection agency or a Latvian law firm which will try to get the payment of the debt in an amicable way or if necessary, through litigation.
In the amicable phase, the used methods consist in sending the debtor several notifications through e-mail, regular mail, telephone and fax. However, these methods are excluding the home visits.
If this procedure is not successful, the legal procedure can be initiated, but it is not a common procedure mostly because of the involved costs and conditions. It is advisable not to reach this point as the procedure is very difficult and expansive to follow.
In most cases, because of the fact that the Latvian judicial system is overloaded, sometimes it can take more a year before the court firstly hear the case. In case of the litigation, there are usually two hearings.
The court procedure is also much expensive for the debtor, but also for the creditor as the debtor needs to cover all the court fees, while the legal fees are paid by the initiator of the claim.
Enforcement of the judgment
The enforcement of the judgment is made by the regional court’s bailiff. The procedure usually consists in a seizure from an employer or seizing the movable and immovable property of the debtor.
The bailiff is an independent individual which obeys only the law. In case the debtor doesn’t have any immovable or movable property or the possibility of paying the outstanding amount, the procedure of insolvency can be initiated and the entrepreneur is not allowed to perform any activity which may lead to gaining profits.
The advantage of using a debt collection agency is that in most of the cases the payment is made only if the debt is collected and consists in a percentage of this amount.
For more details, contact our Latvian lawyers who offer you legal assistance for a debt recovery.