Glossary

Debt collection (parāda piedziņa)

In Latvian: Parāda piedziņa

Payments Updated

Debt collection covers what a creditor does to recover a payment that is past due, from reminders and settlement to court and bailiff. In Latvia a documented debt of up to EUR 15,000 can be enforced through a simplified route called compulsory enforcement of obligations by way of warning (brīdinājuma kārtība).

The warning procedure is available for payment obligations evidenced by a document, such as a contract and invoice, that are already due. It cannot be used if the debt exceeds EUR 15,000, if the contractual penalty claimed exceeds 10% of the principal, if the interest claimed exceeds the principal, or if the debtor's address is outside Latvia.

The court issues the debtor a warning giving 30 days to pay or object. With no objection, the obligation goes to enforcement. If the debtor objects in time, these proceedings end and the creditor can bring an ordinary claim in court.

Example

A client of SIA "Ozols" has left a EUR 1,210 invoice unpaid for 60 days and ignores reminders. SIA "Ozols" applies to the court under the warning procedure and, on top of the principal, may claim a contractual penalty of no more than EUR 121, as it cannot exceed 10% of the debt.

Legal basis

This explanation is for information and does not replace tax or legal advice. The law in its current consolidated text prevails.