Debt collection process

After a request for suspension, the creditor may collect the receivable in court or apply for enforcement.

The creditor is not obliged to transfer the receivable to court or enforcement, but a request for suspension limits the creditor’s right to charge costs for collection letters sent after the request.

After a request for suspension, the creditor may no longer send you collection letters subject to a fee, except for notices that the creditor must send, for example, in order to:

• report a payment default entry
• suspend the limitation period of the debt, or
• otherwise retain the creditor’s rights.

A request for suspension requires that:

• the entire debt has fallen due
• the request is made in writing or in a form that can be stored electronically (for example, by email).

If you have received an invoice or collection letter that you consider unfounded, read the instructions on how to lodge a complaint about unfounded debt collection.

As a rule, payment demands sent by debt collection agencies are written, physical letters. Electronic methods of delivery include, for example, an e-invoice sent through your bank, email and an electronic mailbox.

Payment demands may also be sent to you electronically if you have given your consent separately in writing or electronically.

• Before giving your consent, you should consider carefully in what form you want to receive payment demands and which method is the most reliable for you.
• Consent may be requested by the creditor or the debt collection agency. Consent requested by a debt collection agency may concern several debts, including future debts.
• Consent is valid for no more than one year, and you have the right to withdraw it at any time.

The consent must include at least the following information:

• the selected method of delivery (for example, email)
• the debt collection agency sending the payment demands
• which debt or debts the consent concerns
• the date of the consent and its period of validity.
  Payment demands concerning a specific individual debt may also be delivered to you electronically if you have expressly approved this after the debt has fallen due.

If a payment demand is delivered to you electronically, the debt collection agency must exercise sufficient care to ensure that the payment demand has actually become available to you.

At the guardian’s or attorney’s request, a guardian or holder of a continuing power of attorney also has the right to receive payment demands in writing or electronically. No separate charge may be made for this.

The law sets maximum amounts for collection costs and interest for late payment.

The table below shows the statutory maximum amounts for different collection measures and for the total amount of collection costs. The costs shown in the table are maximum amounts, and the costs must always also be reasonable when assessed as a whole.

The creditor may exceed the maximum amounts only if the debt collection has justifiably been exceptionally difficult and the collection measures cannot be considered disproportionate, taking into account in particular the principal amount of the receivable. You must be told what collection costs are being claimed from you, what they are based on and why the costs exceed the statutory maximum amounts.

* Directly enforceable debts include, for example, taxes, fines, early childhood education fees and other client fees in social welfare and healthcare.

If payment is delayed, you must pay interest for late payment on the delayed amount.

Interest for late payment is determined under the Interest Act. If the due date has been agreed in advance, interest for late payment starts to accrue from the due date.

Otherwise, interest for late payment may start to be charged 30 days after an invoice has been sent to you or payment has otherwise been demanded from you.

The invoice or other payment demand must state the valid rate of interest for late payment and the date from which you must pay interest for late payment.

You are not obliged to pay interest for late payment for the period before you received information from the creditor about the interest for late payment.

The rate of interest for late payment is 7 percentage points higher than the reference rate announced by the Bank of Finland. The general late payment interest rate is determined twice a year.

If the debt was taken out before 1 February 2010 and the general late payment interest rate is lower than the interest agreed for the loan, interest for late payment equal to the loan interest will nevertheless be charged for the period of delay.

If the debt was taken out on or after 1 February 2010, interest equal to the loan interest may be charged as interest for late payment for a maximum of 180 days from the date on which the entire loan fell due, and after that, no more than the general late payment interest rate may be charged.

Reference rate and late payment interest rates under the Interest Act (Bank of Finland, in Finnish)

A payment reminder or payment demand does not yet result in a payment default entry for you.

• An unpaid consumer credit may result in a payment default entry after 60 days of delay if this is stated in your credit agreement. Before the entry is made, however, you must be sent a written payment request at least 21 days in advance, and it must state that there is a risk of a payment default entry.
• In the case of other invoices or debts, a payment default entry arises when the District Court issues a default judgment in an uncontested matter ordering you to pay the debt. A matter is uncontested if it has not been disputed in court on the basis of a claim made by you concerning the grounds for, or amount of, the claim.
• A payment default entry may also arise at the enforcement stage.
• A payment default entry may also be related to a debt arrangement.

More information on payment default entries.

You can usually negotiate various payment arrangements with creditors and debt collection agencies, such as extending the due date or agreeing on a payment plan. You should contact the creditor or debt collection agency as soon as payment difficulties arise and agree on payment arrangements.

Arranging temporary payment difficulties is part of the everyday work of banks and companies, and willingness to cooperate is appreciated.

You can also negotiate even when the invoice or other debt has been transferred to court or enforcement.

Read more about payment arrangements.

The limitation of a debt means that the debt ceases to exist and can no longer be collected.

Most debts become time-barred three years after the due date, unless the limitation period is interrupted. The limitation period also depends on whether the debt is owed to a private or public entity. The limitation period is also affected by whether a final court judgment has been given on the debt.

The creditor may interrupt the limitation period, for example by sending a reminder or taking other collection measures. Agreeing on payment arrangements and a payment made by the debtor also interrupt the limitation period.

The monetary debts of private individuals become finally time-barred no later than 20 years after the debt fell due if the creditor is a company.

More information on the limitation of debts.