Debt Recovery in Latvia
In Latvia the most popular form of covering debt through the court is the Compulsory Execution of Obligations in Accordance with Warning Procedures. In Latvia this form is the most popular because in the case that the debtor does not have any objection against the debt and is reachable in his address the length of the process will be about 1,5 months and it is the cheapest (2% of the amount of the debt but not exceeding ~498 EUR). If the application is denied it is possible to continue ordinary court proceedings without losing of the paid stamp-duty.
If the amount of the debt is less than ~2122 EUR in Latvia recovery of the debt is possible by Simplified procedure for a Small Amount Claims that offers faster possibility of …..in written form.
Court proceedings in Latvia can be time consuming: in the first instance they may last 1.5 years, final decision can be reached within 3-5 years. Legislation provides the possibility to protect oneself from the negative actions of the debtor and to ask the court to apply the temporary protection measures. Therefore if the property and bank accounts of the company were to be arrested it is possible to ensure that in the case of a positive judgment the debtor will have property or funds secured for covering the sum adjudged by the court. Submission of the application for the temporary protection measures is possible at any stage of the litigation or even prior the submission of the claim. The decision of the court might be implemented promptly by the bailiff.
Another possible avenue for recovering funds is submission of the application on the debtor insolvency or at least to send a warning letter on starting the insolvency proceedings if the debt will be not covered within 3 weeks period. This is a very serious and effective means of recovery in cases where the debtor would like to continue economic activity. But it is necessary to remember that where insolvency proceedings are commenced, debt will cease to grow and it will be required to divide the recovered money with other creditors. Insolvency proceedings may take a few years. The state fee in Latvia is ~1068 EUR.
There is also a European Small claims procedure for cases in which the creditor and debtor are in different countries and the claim is not exceeding 2000 EUR. The procedure is written and oral hearing is only an exception. This procedure is rather fast since the judgement has to be recognized and enforceable in any Member State.
Furthermore we suggest checking the current financial situation of the debtor.
This information will be available if the company is not under liquidation.
The state fee for these documents is approximately 10 EUR. This will help to determine the best method of debt collection in a given situation.