If you have financial problems, the situation can quickly become confusing.
– For those who have trouble with the economy, it can be difficult to get an overview of all outstanding debt collection cases. This makes it challenging to make agreements with the various creditors, because new debt is constantly emerging, says director of the Consumer Council, Jorge Jensen.
Lene Drange and Hallgeir Kvadsheim, both known as presenters in the TV3 program Luksusfellen, have extensive experience in cleaning up the finances of people with many debt collection cases.
The duo is tired of having to spend a long time on the frustrating job of obtaining information from 100 different debt collection companies, and will now create a debt collection register that will make it easier to get an overview.
– When you as a private person have to get an overview of all debt collection cases, it can take weeks. That’s not how we can have it. We believe that it is high time that this process is simplified, and we have a bad time, says Kvadsheim.
Debt collection
Debt collection is the collection of monetary claims that have fallen due.
When you have not paid a bill on time, the person you owe money to (the seller) can start debt collection. The seller can do this directly himself, or for example with the help of a debt collection company.
“Commercial debt collection activities can only be carried out by a person with a debt collection permit from Finanstilsynet, or companies where the responsible manager has a debt collection permit. Debt collection can also be carried out in accordance with a lawyer’s license “, writes Store Norske Leksikon.
Visma writes the following:
«Before the seller can start debt collection, a debt collection notice must be sent out. The collection notice can be sent out 14 days after one invoice has fallen due, or you can choose to send payment reminders first.
The collection notice must be made so that the recipient immediately understands that it is a collection notice, and must contain information about what the claim is about, the amount and the payment deadline must be at least 14 days.
If what is due has not been paid 14 days after the debt collection notice has been sent out to the customer, the seller can therefore start debt collection ».
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Large debt collection
Over the last ten years, the country’s total debt that has gone to debt collection has almost doubled, from NOK 62 billion in 2010 to NOK 115 billion in 2020.
– Norway has a very high number of debt collection cases in relation to comparable countries such as Sweden. We live in a society where more and more people are facing financial challenges, and we see that the problems persist. It is difficult to get out of a financial disability, says Drange.
In two years, the debt collection has increased by NOK 6 billion. Cases older than 18 months amount to NOK 36 billion.
– In 2020, there were 9.7 million new debt collection cases, compared with 5.4 million in 2010. Figures from Finanstilsynet show a proportionally larger increase in the number of debt collection cases for young people in the age group 18-25, where boys are overrepresented. We also see that the cases in this age group are almost exclusively minor requirements, such as mobile phone bills, says Drange.
Debt collection register
Drange and Kvadsheim have established one debt collection register where private individuals will be able to get an overview of all their debt collection cases free of charge.
– This will be a portal where individual users can get an overview of debt collection debt and how it should be prioritized, as well as in the long run get good advice on how it can be handled, says Drange.
The customer must log in with BankID and request an overview.
– Private individuals do not have an overview of their own situation, and it is difficult to find information about their own cases. Today, this is a time-consuming process for individuals and for any advisers, such as NAV’s debt adviser, to set up a total overview, says Drange.
End on kind creditors
Drange and Kvadsheim’s project has received a commercialization grant of NOK 700,000 from Innovation Norway, and with them on the team are the tech founders Tomas Haavet and Rune Brunborg.
– We also have a close dialogue with the bailiff in Oslo and Viken, the Ministry of Children and Family Affairs, Virke Inkasso, the Consumer Council and the debt collection companies, says Drange.
Kvadsheim points out that the creditors as a result of the pandemic have been quite kind to debtors in the last year.
– Now we return to more normal conditions. Unemployment rose sharply during the pandemic, especially among young people, and bills have been pushed back. That is why it is so important that you can get an overview of what you owe, says Kvadsheim.
– Missing
A couple of years ago came the Debt Register, which shows people’s unsecured debt and credit limits on credit cards, consumer loans and shopping accounts. This will slow down the degree of unsecured debt in Norwegian households, and provide banks with better information when assessing loan applications.
There has also been a new mortgage regulation, debt collection fees have been reduced and this autumn a new debt collection law was passed. Just around the corner is a new debt settlement law and probably an extension of the Debt Register.
– All these measures will help Norwegian households to improve their own finances. But something else is still missing, namely a debt collection register, Drange believes, and elaborates:
– A person who has ended up in a financial disability usually has a mixed debt situation. This means that the person in question has ordinary loans, car, housing and student loans, but also a large degree of unsecured debt through credit cards and consumer loans. When you lose control and it rages financially, you often stop paying current bills – and this is often where the disability begins.
– Stunning
The person in question tries to save his financial situation by taking on new debt, but does not succeed in paying himself up to date. Thus, the problem increases and quickly becomes confusing.
– There are 100 different debt collection companies in the country, and if you want an overview, you must contact everyone. For a person with a shaky economy, it will be overwhelming to get an overview of x number of debt collection cases when you know that you do not have the money to pay them, says Drange.
She therefore believes it is important to communicate about how situations can be resolved through making agreements, renegotiating terms and structuring one’s own debt.
– We have experienced this from 11 years and 22 seasons of Luksusfellen, where we have come close to many debt victims and had the opportunity to help them out of a very difficult financial situation. We normally spend one week getting this information, while we will now be able to obtain it in 15 minutes, says Drange.
Kvadsheim emphasizes that the most important job you do when cleaning up your own personal finances is to get an overview of what you owe.
– If you stumble here, it helps little with a new budget and repayment. All too often, we and NAV come into contact with people who thought they had cleaned up, arranged repayment, refinanced, but then come old claims that were forgotten and destroy everything, says Kvadsheim.
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