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Legal information from law students
RECOVERING A DEBT
This document mainly gives information on how to recover a debt. It also contains a brief discussion
of the rules on time-barring and promissory notes.
This will be relevant to you if someone owes you money. When you have a claim to money, you are
called the creditor for the claim in question. The person who owes the money is called the debtor.
Having a debt means that one has an obligation to pay a sum of money to another person. Such a claim
may arise in many ways, but the typical situation in most cases is that the creditor has made a loan of
money to the debtor.
Demands
The first step in recovering a debt is to send the debtor a demand. A demand is a request from the
creditor to the debtor to repay the debt. The demand should specify what amount you, the creditor,
believe the debtor owes. An example of a demand is attached (annex 1).
The general rule is that the debt is due on receipt of the demand; see Section 5 of the Promissory Notes
Act (Gjeldsbrevsloven). When the debt is due, this means that the debtor is required to repay the debt.
The usual practice is to defer the due date by 14 days when you send a demand. That way, you give the
debtor 14 days to pay the debt. If the debtor has not paid by the due date, he has not complied with his
agreement with the creditor.
If you agreed a payment date with the debtor at the time when you loaned the money, this date will
determine when the debt is due.
Forced recovery of a debt
If the debtor does not pay when the debt is due, the creditor can have the claim enforced. The rules for
forced recovery can be found in the Debt Enforcement Act (Tvangsfullbyrdelsesloven). Enforcement is
the legal recovery of a claim with the support of the authorities. In the case of enforcement, the State, in
the person of the enforcement officer (‘namsfogden’ or ‘namsmannen’) helps to recover the claim; see
Debt Enforcement Act, § 2-1. This may happen by deducting from the debtor’s salary or by the creditor
taking possession of the debtor’s assets. By taking possession of the assets, you obtain security for the
claim. Then you can recover the debt by arranging a forced sale of the assets in your possession.
The enforcement office has a statutory duty to provide guidance laid down in the Debt Enforcement
Act, Section 5-3(2). People working there are therefore required to give information and guidance on
the areas in which the enforcement officer operates, including forced recovery.
As a creditor, you cannot simply go to the enforcement officer with a claim. In order to recover a
claim through the enforcement officer, the creditor must have a “basis for enforcement”. This is a
document entitling you to have the claim recovered with the aid of the enforcement officer. A letter
sent by the creditor to the debtor setting out the basis for the claim and the amount is such a basis for
enforcement; see Debt Enforcement Act, Section 72(f). A demand as described above will be a basis for enforcement provided that, in addition to
specifying the amount, it also states what the claim relates to. There are many bases for enforcement,
including a judgment of the Conciliation Board (Forliksrådet) or an “enforceable promissory note”
(more on this under “Securing a claim with a promissory note”).
If the creditor has sent a demand and the debtor does not pay by the due date, the creditor may
send a written request for payment with a warning that the claim will be subject to enforcement
if payment is not made within a specified time limit. If payment is still not forthcoming, the
demand is considered to be a basis for enforcement. As creditor, you can take a copy of the
warning notice with you to the enforcement office for forced recovery. You can request forced
recovery by the enforcement officer both orally and in writing. You can obtain further
guidance from the enforcement office. You can also find more information on their website
www.namsfogden.no.
The enforcement officer will decide how a claim is to be recovered. In practice, this is done
either by seizing assets or by deductions from salary. The Debt Enforcement Act, Section 7-1,
provides that any asset belonging to the respondent can be seized. That means that you can
take possession of the assets. If enforcement is effected against the debtor’s salary, their
employer is obliged to deduct a certain amount from their salary each month before it is paid.
The actual amount depends on the total extent of the debtor’s income. Under the Satisfaction
of Claims Act (Dekningsloven), Section 2-7, the debtor should always be left with an amount
to cover day-to-day expenses and living costs. In the case of day-to-day expenses, the amount
is calculated on a general basis by the enforcement officer. Different maintenance rates are
specified according to whether a person is single or has a partner/spouse or children. How
much the debtor is entitled to retain thus depends on their rent/living costs and the maintenance
rate determined by the enforcement officer.
A fee is charged for forced recovery. This is a fee that the debtor is required to pay, but it is the
creditor who has to make the payment and claim the amount back from the debtor; see Debt
Enforcement Act, § 3-1.
Objections by the debtor to the basis
for enforcement
The debtor is given the opportunity to protest to the enforcement officer against the basis for
enforcement; see Debt Enforcement Act, Sections 4-2 and 7-6(2). In such cases, the
enforcement officer will decide whether the basis for enforcement should be upheld or not. If
the basis for enforcement lapses, you can acquire a fresh basis for enforcement by obtaining a
decision from the Conciliation Board or the court.
If the debtor raises objections with the enforcement officer, and the officer then withdraws the
basis for enforcement, the creditor can summon them before the Conciliation Board for
mediation. As the creditor, you can mention in your request to the enforcement officer that you
want to summon the debtor before the Conciliation Board for mediation if they raise objections
to the demand with the enforcement officer; see Debt Enforcement Act, Section 7-7(2) Then
the debtor will automatically be summoned before the Conciliation Board for mediation if they
protest against the demand.
There is a Conciliation Board in every municipality. The Board decides on most types of debt
matters before a case can be appealed before the courts. The Conciliation Board acts both as a
mediation body and as a court. If you do not agree on the demand before the Conciliation
Board, a ruling may be pronounced there. If this is in your favour, it will constitute a basis for
enforcement for recovery via the enforcement officer. To have a case heard by the Conciliation
Board, you have to pay a fee of NOK 860. For further information on the process before the
Conciliation Board, you can contact your local board, or visit their website at
www.forliksraadet.no.
Securing a claim with a promissory note
If you do not want to recover the debt all at once, you can secure the claim by having
the debtor sign a promissory note. A promissory note is a written promise to pay or an
acknowledgement that one owes money. The promissory note must be independent of anything
else to be called this. This means that the promissory note may not contain any sort of
conditions for the claim. Even if such conditions or consideration are present in the basis for
enforcement, they must not be included in the promissory note. The basis for the claim will
generally be an agreement between the parties, such as a loan agreement or a purchase
contract. A promissory note therefore only gives details of who owes money to whom, and
how much they owe.
The promissory note is taken as evidence that the other party owes you money. In this way,
your claim is secured. Another advantage of a promissory note is that the limitation period is
longer than it is for other claims; see “Time-barring of claims” below.
You can also enter into an agreement with the debtor to charge interest on the claim, so you do
not lose money when the claim is not paid back all at once. If this is the case, it must be stated
in the promissory note or agreement.
If you want to recover the money later, you must follow the procedure under
“Forced recovery”. You first have to send a demand, then notice of enforcement, before the
claim can be recovered via the enforcement officer.
There are various types of promissory note. The attached sample is what is known as an
“enforceable promissory note” (annex 2). The advantage of an enforceable promissory note is
that the enforcement officer can enforce the claim directly, without the creditor having to go to
the Conciliation Board or the courts first if the debtor raises objections; see Debt Enforcement
Act, Section 7-2(a).
However, it is not necessary to draw up an enforceable promissory note in order to secure the
claim. A written acknowledgement stating who owes money to whom and how much they owe
will also secure the claim.
Time-barring
of
claims
If a claim is time-barred, it will lapse in its entirety, and the creditor will no longer be able to
recover
it. The Limitation Act (Foreldelsesloven) governs questions of time-barring. The normal
limitation period for monetary claims is three years; see Limitation Act, Section 2. If you have
secured the claim with a promissory note, the limitation period will be 10 years from the date
when the promissory note was signed. Loans of money also have a limitation period of ten
years; see Limitation Act, Section 5 no. 1. If the claim is not a loan and it not secured by a
promissory note, the normal limitation period of three years will apply.
The limitation period starts from the earliest date on which the creditor can demand payment
from the debtor; see Limitation Act, Section 3. If the due date was set by the creditor at the
time when the claim was established, the limitation period will start from the due date. If the
due date is not specified, the limitation period will run from the date on which the claim was
established, i.e. the earliest date on which the creditor can recover the money.
The limitation period can be suspended by the debtor or the creditor in various ways. The
consequence is that a new limitation period will start to run. The limitation period will be
suspended when the debtor acknowledges his or her obligation to pay, either explicitly or by
their behaviour, or by paying interest; see Limitation Act, Section 14. In such cases, the same
period will start from the date of suspension (3 years or
10 years). The limitation period may also be suspended by the creditor taking the matter to the
Conciliation Board or the court; see Limitation Act, Section
15, or by the creditor requesting enforcement through the enforcement officer; see Limitation
Act, Section 17. In these cases, a 10-year limitation period will start, even if the original period
was three years.
If you are the creditor, it is important to suspend the limitation period if the end of this period
is approaching. If you do not, the claim will lapse, and the creditor will no longer have any
claim to repayment from the debtor.
We hope you find this
helpful.
Place and date.
Own name and address
Name and address of the person who owes money.
Heading: DEMAND FOR...
Brief details of the matter, i.e. why you believe you have a claim. Here you can refer to
documentation and attach copies (this could be an enforceable promissory note, for example).
Then write how much the claim is for, what account-number it should be paid into, and
whether you want interest to be charged (you can claim interest under the Interest on Overdue
Payments Act (Forsinkelsesrenteloven) when the original payment period has expired). It is
usual to allow two weeks for payment of the claim.
Also state that this constitutes notice of enforcement, and warn that you will request
enforcement if the debtor does not comply with the claim; see Enforcement Act, Section 4-18.
Yours sincerely,
Signature
.
PROMISSORY NOTE
, personal ID ………………………..…….., hereby declare that
I, the undersigned,
, personal ID …………………………………. NOK ………………….
I owe
……………………………………… kroner (in words) . The debt must be repaid no later than ….. – …..
– months from today’s date. In the event of failure to do so, the creditor reserves the right to claim
interest under the Interest on Overdue Payments Act from the date of signature of this promissory
note.
Oslo, [date]
(debtor’s signature)
I, the undersigned,
, hereby confirm that the above promissory note can be enforced
without recourse to the courts; see Enforcement Act, Section 7-2(a). The same applies to interest
and out-of-court recovery costs.
Oslo, [date]
(debtor’s signature)
Witnesses have been called, who are both of age, and who hereby confirm that the debtor has
signed this document in their presence
…………………………………..
………………………………..
Name in block letters:
Name in block letters:
Address:
Address:
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