The most popular way of collecting debt in Estonia is by filling actions in Courts. In order to avoid litigation procedures in Estonia our lawyers can advise you on best legal practices.
Pre-trial proceedings are the first step in Estonian debt collection. These consist in verification of the debt, gathering information on the debtor’s financial situation with the trade register and tracking his address and phone number. After these proceedings the debtor will receive notifications about his debt. Notifications are made from demand letters, e-mails and phone calls. In case the debtor will not answer any of the notifications a letter to the trade register will be sent and the debtor will be taken to court in order to recover the debt.
In this case the debtor will need a legal representative. Our attorneys in Estonia provide you with this kind of services and legal assistance throughout the whole process.
A lawsuit’s statute of limitation in debt collection expires after three years. The Estonian judicial system is made of three instances, the highest of them all being the Supreme Court. To be represented in the Supreme Court a debtor will need a lawyer and will also be required to pay a state tax.
If both parties consent the court can judge the matter without hearing it first in court. In this case the court will decide upon a term for the participants to gather and submit petitions and documents for making the judgment public. If the judgment has been conducted outside Estonia by a competent court, the Estonian court will accept the ruling provided by the foreign court within a reasonable period of time.
The second debt collection possibility in Estonia is the court’s expedited procedure in matters of payment orders.
A claim directed at the payment of a certain amount of money will be judged by the court based on a petition by way of expedited procedure prescribed for a matter of payment order. However, expedited procedures in matter of payment order cannot be applied to claims with amounts of over 6 400 euros.
In case of bankruptcy an analysis of the debtor’s responsibilities and assets will be made, but also the risks that the clients is exposed to once the proceedings have started. The client has to pay a state fee and a deposit to cover temporarily the trustee salaries before filing the bankruptcy petition. The bankruptcy procedure in Estonia will usually take between 2 and 3 years.
Foreign judgment in debt collection is recognized under the Council Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.
According to the Regulation the plaintiff will send the bailiff an application form for the execution of an European Enforcement Order, a copy of the decision and the European Enforcement Order Certificate. Then, the bailiff will freeze all the debtor’s assets.
Post-trial proceedings will conduct to the enforcement of the court’s decision.
Our law firm in Estonia can provide you with more information about the debt collection system. Our lawyers can also help you to open a business in Estonia and provide assistance and consultancy in a variety of legal matters.
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