How to deal with the arrears of Swedish importers?
Swedish customers are missing, the balance is difficult to collect, what to do?
What should be done if a Swedish customer deliberately defaults on the payment?
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If we encounter Swedish customers maliciously defaulting on payment, what measures should we take to protect our rights and interests? This article mainly describes Sweden's requirements related to the collection of arrears, the scheme of collection of arrears, and the cases of successful payment collection.
Sweden's requirements for collection of arrears
1. The collection agency must have permission to act on behalf of the Swedish customer (the permission is issued by the Swedish Data Inspection Council of datainspektionen).
2. Swedish law stipulates that under normal circumstances, the debt collection time can last for up to 12 months.
3. In cases where there is no dispute or controversy, a simplified procedure may be adopted: payment order. Payment orders were not issued by the swedish courts, but by Kronofogden (Swedish Law Enforcement Agency: a swedish credit agency, affiliated with the government).
4. If the debtor refuses to pay the payment order and objects to the arrears, it will enter the ordinary civil litigation procedure. After going through the civil proceedings, the debtor is ordered to pay the amount owed.
5. The statute of limitations in Sweden is 10 years.
6. If, after the end of the litigation, the debtor still refuses to repay, Kronofogden (Swedish Law Enforcement Agency) will verify the debtor's assets, inquire about the income, freeze the income for payment, and freeze all the property under its name.
*It is important to note that after initiating litigation collection, the Swedish Enforcement Agency will charge a corresponding fee according to the circumstances of the case at each step, and the cost is difficult to estimate.
How to deal with the payment owed by the Swedish customer?
When encountering Swedish customers in arrears, in addition to clarifying the real reasons for the other party's arrears in payment, it is also necessary to do the credit investigation of the other party at the first time, understand the operation and financial situation of the other party, and judge whether the other party has the ability to repay the arrears and whether the goods are maliciously owed.
1. Two situations in which the customer defaults on the payment of the goods
Have the ability to repay, no willingness to repay;
Lack of repayment ability and willingness to repay.
2. The choice of collection method
(1) Self-collection
Once there is an overdue period, the cooperation is suspended or terminated at the first time, and if there is still a cargo that has not yet been issued, the shipment needs to be suspended immediately as a means of pressure to force the other party to pay as soon as possible.
For customers with short overdue times, you can provide customers with a suggested payment plan by asking them why they are not paying and understanding what the problem is. For customers with a long overdue time, they should be collected as soon as possible, and if necessary, they can be pressured to repay.
Within 30 days of overdue, internal collection can be used, arrange special personnel to follow up, telephone, mail and other ways to communicate and solve; 30-90 days, increase the intensity of collection, dunning letter delivered in time, inform the other party of the measures to be taken, such as contacting collection agencies, taking legal litigation channels, and even the United Nations seller boycott.
(2) Entrusting a third-party organization
Overdue more than 90 days, quickly contact a professional third-party collection agency to intervene, by the professional to solve, save time and effort, worry, the third-party institution through communication with the debtor, you can also understand the reasons for the other party's non-payment from a professional point of view, and accordingly give the enterprise advice, suggestions, to promote the settlement of disputes between the two sides, the payment obtained in response, and the third-party intervention will have less impact on the cooperative relationship between the two sides, there is still a possibility of cooperation in the future.
(3) Filing a lawsuit
Litigation collection can only be used as a last resort, because the litigation cost is high, the cycle is long, and it is best to only target users with repayment ability and poor willingness to repay, because if the other party has no repayment ability, even if the lawsuit is filed, it may not be able to recover the payment, but waste a lot of manpower, material and financial resources. Therefore, before initiating litigation collection, we must do a credit investigation of the transaction party to assist in decision-making.
A case of successful recovery of Sweden's foreign trade arrears
Background of arrears
Creditor: A foreign trade enterprise in Henan
Debtor: A Swedish company
Amount owed: $1.01 million
Age of arrears: 3 years
In June 2014, a foreign trade enterprise in Henan supplied a Swedish company with thermal component products worth US$1.01 million, with an agreed account period of 30 days. However, after 30 days, the debtor did not pay the purchase price as agreed, saying that its customer did not pay the payment, resulting in difficulties in capital turnover. From late July 2014 to April 2015, Henan sent emails and phone calls to collect payment almost every month, and the debtor only replied to an email in November 2014 saying that it might pay in December 2014. In April 2015, the creditor entrusted another company to collect the debt, but did not receive a valid reply. At the end of August 2017, the creditor entrusted our company to collect.
Case analysis
After receiving the entrustment, our company found that:
1. The debtor has been in a negative profit state since 2014, and the revenue decreased in 2014 and 2015, and although it improved in 2016, it was not obvious. In 2016, the receivables increased sharply, mainly in the form of miscellaneous receivables, and we believe that customers are suspected of selling assets;
2. Filed for bankruptcy on April 6, 2017, withdrawn in May;
3. In 2017, a number of new public and private bonds were added, which have not yet been repaid.
Collection process
After mastering the debtor's situation, the collection lawyer initiates the collection procedure:
1. On the third day after the collection lawyer sent the first dunning letter, the debtor took the initiative to contact the creditor and said that it would pay in batches and wanted to continue to order, but at the same time raised the product quality problem.
2. After communicating with the collection lawyer, the creditor rejected the intention of paying in batches and continuing cooperation, and insisted that the debtor pay all the arrears.
3. Based on the debtor's business status quo and the principle of maximizing the payment collection, after many consultations and pressures, the collection lawyer finally promised to pay 20% of the purchase price first, and the remaining amount was repaid in installments.
4. In January 2018, the debtor paid the creditor the first amount of 200,000 US dollars. As of December 2019, the debtor had repaid a total of $750,000, during which repayment was interrupted twice, but the repayment was resumed under pressure from the collection lawyer.
5. In July 2020, after nearly three years of efforts by the collection lawyer, the debtor repaid the debt in full, and the case was successfully concluded.
Collection summary
1. When cooperating overseas, maintain a skeptical attitude towards the information provided by customers, and suggest that before and after cooperation, we must have a comprehensive understanding of customers through professional channels and grasp customer dynamics;
2, once there is an overseas arrears, you need to take effective measures at the first time, seize the best time to recover, the longer the arrears, the customer will take various excuses to delay, the smaller the possibility of recovery.
Third-party collection agencies can help domestic and foreign trade enterprises deal with global payment arrears with professional processing processes and localized collection operation strategies. Leave the professional matter to the professional people, if you are worried about overseas customers defaulting on the payment, contact me quickly.
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