Debt Collection in Estonia

Debt collection in Estonia includes pre-trial practices along with court proceedings (if necessary) for the purpose of recovering owed amounts. Working with a law firm in Estonia, such as our team that specializes in debt collection, is common practice. The main principles of claiming due debts in Estonia are outlined below by our team.

General debt collection practices in Estonia

Debt collection in Estonia first focuses on amicable collection. This means that the creditor will first attempt to recover the debt out of court.

An Estonian company might choose to focus on amicable debt collection not only to avoid a possibly lengthier legal process, but also to maintain the business relationship. Below, our attorneys in Estonia briefly list the stages of amicable debt collection:

1. Initial reminder: the first step is to contact the debtor with a polite reminder.
2. Formal reminder: if the debtor is non-responsive or still does not pay the owed debt, it is time to send a formal reminder which will also mention the firm intent to sort the issue;
3. Follow-up and negotiation: a second reminder can be used, during which the creditor can open a communication channel with the debtor as to negotiate a mutually beneficial payment plan;
4. Final demand letter: should the above amicable practices for debt collection in Estonia fail to produce results, it is time to issue the final demand letter which will also mention the possibility of commencing legal action.

Amicable debt collection in Estonia is a more friendly practice that has a higher degree of flexibility and can be successfully used for debt collections after which the parties may still work together. At the same time, it also provides for faster results.

Should amicable collection prove inconclusive or impossible (if the debtor company is bankrupt or insolvent), our lawyers in Estonia will advise on moving towards court debt collection. This stage is one during which legal representation is warranted and which may present complications, for example when the debtor is declared bankrupt and a liquidation phase must follow.

Expedited payment orders in Estonia

In Estonia, the civil procedure for collecting debts also allows for an expedited payment order procedure. A creditor who requests this is allowed to enforce a title or a payment order faster than compared to standard legal proceedings.

An expedited payment order procedure has the following characteristics:

• There is no court hearing and the court adjudicates within 10 working days of receiving the application for the expedited procedure;
• The claimed amount cannot exceed EUR 8,000 (including ancillary claims, such as interest);
• The petitioner pays a state fee of no less than EUR 65. The costs of the procedure can be paid by the debtor, if the court orders this.

The application procedure for an expedited payment order procedure, when believed beneficial for debt collection in Estonia, can be detailed upon request by our local team of experts.

Our lawyers provide assistance to those looking to recover their undue payments but also to individuals against which enforcement proceedings have been initiated. Our team can assist if a claim has been filed against you.

Compliance requirements for collecting debts in Estonia

Creditors who choose to work with a collection agency should keep in mind that these are subject to regulation and authorization by the Financial Supervision Authority.

Contact our attorney in Tallinn for more information and assistance with debt collection in Estonia.