Do you have debts that have accumulated? And are you having trouble repaying the debt in a timely manner? It can be hard to figure out what the consequences can be.
This guide will help you understand what can happen if you cannot pay off your debt. In Denmark, the fewest people can go through life without incurring debt.
Become clearer about what can happen when you don’t pay off your debt
We give you some specific suggestions as to what the consequences may be if you think, “I can’t pay my debt, what do I do?”. In addition, we will give you a better understanding of debt recovery and an overview of what to expect in such a situation. In addition, you can read about debt maturity, debt recovery to SKAT and much more.
Romeo is a price comparison service which offers comparison of prices of eg. loans, insurance and A-boxes. In addition, we have more than 5 years of experience in the Danish loan market.
In this guide you can read more about:
- Non-performing debt
- Debt to private creditors
- Debt to the public
- Interest and fees on debt
- Your rights as a debtor
- Debt settlement options
What are the consequences of having debt defaulted?
It happens that people who cannot pay debt may find it difficult to turn their financial situation into something positive. If you are in that situation yourself, you probably want to know what is happening and what you can do yourself. Below you can see what happens if you cannot pay off your debt.
You can be in debt in two ways:
- You may be in debt to the public.
- You may be in debt to private creditors.
Depending on whether you have a debt to the public or a creditor, there will be different consequences of not paying. If you have debts to several different creditors, you may want to consolidate your loans into a collateral loan and get an overview of your financial situation again.
When you are a debtor, the following can happen:
- You will be reminded of your debt via reminder letters.
- If you do not respond to the above, the case will go on to debt collection or TAX.
- You will most likely be registered in RKI.
- You can get a summons to the bailiff.
- You must deal with debt maturity and debt restructuring (debt settlement).
If you have debt to private creditors
If you owe money to private creditors in the form of loans or other credits, e.g. to a private individual, the bank, or to a store where you purchased goods on installment, it is called that you have a debt relationship with a creditor. If you cannot repay your debt on time, your creditor will forward the case to debt collection. Before a debt collection company takes over your case, your creditor will usually make one last attempt to recover the debt via reminder letters.
It will be 10 days before you receive the reminder letters:
- First reminder will be sent after the last timely payment day with a reminder fee of approx.
- The next reminder letter will typically include a debt collection notice.
- Finally, you will receive a third and last reminder letter, which is also used as a collection letter.
If you do not respond to the reminder letters and you do not pay, the debt collection will take over your case. A collection process may look as follows, but may vary depending on the individual collection case.
Worth knowing when you have Debt
- The debt collection company will involve the court of appeal where a legal recovery of your debt will be requested. A payment order will be sent to the bailiff.
- The payment claim will then be sent to service where a subpoena will forward it to you.
- You then have as a debtor 14 days from you receive the payment requirement to pay your debt.
- Depending on whether your payment claim contains a request for outlay on your property, the bailiff may convene a bailiff meeting.
If you have debt to the public
If you have public debt, several things can happen. The government has several different options for recovering the debt through the Danish Debt Management Agency.
They can include offset your debt in your government payments by withholding part of your benefit, e.g. unemployment benefit or severance pay, or by changing your tax rate for SKAT. Alternatively, they may require an outlay of your values, such as your house or car. This means you must not sell them.