The translation of this document is outdated.
Translation validity: 12.07.2021.–14.07.2023.
Amendments not included:
08.06.2023.
Text consolidated by Valsts valodas centrs (State
Language Centre) with amending laws of:
6 June 2019 [shall come
into force on 3 July 2019];
15 June 2021 [shall come into force on 12 July 2021].
If a whole or part of a section has been amended, the
date of the amending law appears in square brackets at
the end of the section. If a whole section, paragraph or
clause has been deleted, the date of the deletion appears
in square brackets beside the deleted section, paragraph
or clause.
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The Saeima1 has adopted and
the President has proclaimed the following law:
Law on
Extrajudicial Recovery of Debt
Chapter I
General Provisions
Section 1. Terms Used in the Law
The following terms are used in the Law:
1) debt - payment obligations which have not been
fulfilled within the deadline specified in a lawful transaction
or legal act;
2) debtor - a natural person who has not fulfilled the
payment obligations undertaken thereby under a lawful transaction
or specified in legal acts within the deadline specified in the
lawful transaction or legal act, and who is operating beyond the
scope of the economic or professional activities thereof;
3) provider of debt recovery services - a person who
recovers debts in the name of or on behalf of a creditor within
the scope of commercial activities or professional activities
thereof;
4) creditor - a person who has lawful relations with a
debtor and who, on the basis of a lawful transaction or legal
act, has the right to request the fulfilment of payment
obligations;
5) debt recovery - an aggregate of extrajudicial
activities used by a creditor or provider of debt recovery
services inviting a debtor to voluntarily fulfil the delayed
payment obligations.
Section 2. Purpose of the Law
The purpose of this Law is to:
1) govern the rights and obligations of a creditor and a
provider of debt recovery services in the field of debt
recovery;
2) ensure justice, commensurability and rationality during the
recovery process;
3) facilitate voluntary payment of a debt;
4) promote the opportunity for third parties to assess the
fulfilment of payment obligations by a natural person.
Section 3. Scope of Application of
the Law
(1) This Law shall govern the operation of providers of debt
recovery services and prescribe the requirements for a creditor
and provider of debt recovery services in respect of debt
recovery and the creation of a debt history database.
(2) The norms of this Law shall not be applicable to the debt
recovered by a State or local government institution in the field
of public law.
(3) This Law shall not affect the right of a creditor,
provider of debt recovery services or debtor to turn to a court
or an arbitration court. A court or an arbitration court shall
examine civil legal disputes arising from this Law in accordance
with the procedures specified by the Civil Procedure Law.
(4) The norms of this Law regarding the reminder of a creditor
shall be applicable insofar as is not specified otherwise by the
Civil Law.
(5) The rights and obligations of a creditor specified in
Chapter III of this Law shall be applicable if the creditor is
the performer of economic or professional activities.
(6) If the recovery of a debt is directed against a guarantor
who is a natural person and operates beyond the scope of economic
or professional activities thereof, the norms of this Law
governing recovery of a debt from a debtor shall be
applicable.
(7) A cessionary shall effect the recovery of a debt in
compliance with the rights and obligations of a creditor provided
for in this Law. If the cessionary has acquired the right to
claim on the basis of a cession within the scope of its economic
or professional activities, the cessionary shall be subject to
the rights and obligations of a provider of debt recovery
services provided for by this Law.
Section 4. Supervisory
Authorities
(1) The Consumer Rights Protection Centre (in respect of the
protection of consumer rights) and the Data State Inspectorate
(in respect of the protection of the data of natural persons), as
well as other supervisory and control authorities shall supervise
the compliance with this Law in accordance with the competence
specified in laws and regulations.
(2) When supervising the compliance with this Law, the
Consumer Rights Protection Centre is entitled to request the
information necessary for the performance of its functions from a
debtor, creditor or provider of debt recovery services, and
specify the deadline for the submission thereof.
(3) If the Consumer Rights Protection Centre establishes that
the non-compliance with this Law has caused or could cause harm
to the interests of consumer groups (collective interests of
consumers), it is entitled to take a decision, by which it
assigns the creditor or provider of debt recovery services to
terminate the violation of this Law or to rectify the violation
allowed and determine the deadline for the performance of the
necessary activities. The procedures by which the Consumer Rights
Protection Centre shall take decisions and the procedures for
appealing these decisions shall be determined by the Consumer
Rights Protection Law and the Unfair Commercial Practices
Prohibition Law.
Chapter
II
Operation of a Provider of Debt Recovery Services
Section 5. Special Permit (Licence)
for Debt Recovery
(1) A provider of debt recovery services is entitled to
recover a debt in the name of or on behalf of a creditor, if it
has registered as a merchant or a performer of professional
activities and has received the special permit (licence) for debt
recovery (hereinafter - the special permit (licence)).
(2) The special permit (licence) shall be issued by the the
Consumer Rights Protection Centre.
(3) The requirement referred to in Paragraph one of this
Section shall not apply to sworn advocates and the administrator
in accordance with the provision of the Covered Bonds Law.
(4) The Cabinet shall determine the requirements to be
complied with in order for a provider of debt recovery services
to receive the special permit (licence), as well as the
procedures for the issuance, use, suspension of operation,
re-registration and cancellation of the special permit
(licence).
(5) A provider of debt recovery services shall pay the State
fee for the issuance and re-registration of the special permit
(licence). The amount of the State fee and procedures for its
payment shall be determined by the Cabinet.
[15 June 2021]
Section 6. Reimbursement of Debt
Recovery Expenses
(1) A debtor has an obligation to reimburse the provider of
debt recovery services the expenses incurred thereby in
recovering the debt if their reimbursement is requested and there
is no dispute regarding the existence of the debt.
(2) The debt recovery expenses must be commensurate and
objectively justified. The debt recovery expenses shall be
considered to be commensurate if they correspond to the
permissible amount of debt recovery expenses specified by the
Cabinet (except for those expenses which the Cabinet has deemed
to be non-reimbursable).
(3) The Cabinet shall determine the permissible amount of debt
recovery expenses and the non-reimbursable expenses.
Chapter
III
Communication to be Implemented during Debt Recovery
Section 7. Obligation to Provide
True and Complete Information
(1) When commencing debt recovery, a creditor or provider of
debt recovery services shall notify the debtor in writing of the
existence of a debt and invite him or her to voluntarily fulfil
the delayed payment obligations. The following information shall
be provided in such notification:
1) regarding the creditor - a legal person - the firm name
(name), registration number, legal address, telephone number,
electronic mail address and other contact information; regarding
the creditor - a natural person - the given name, surname,
personal identity number, address, telephone number, electronic
mail address and other contact information;
2) regarding the provider of debt recovery services - a legal
person - the firm name (name), registration number, special
permit (licence) number, legal address, telephone number,
electronic mail address and other contact information; regarding
the provider of debt recovery services - a natural person - the
given name, surname, personal identity number, special permit
(licence) number, address, telephone number, electronic mail
address and other contact information;
3) the legal grounds on which the provider of debt recovery
service has acquired the right to recover the debt - the type of
transaction and the date of entering into the transaction;
4) the legal grounds for the creditor's claim - the type of
transaction entered into by the creditor and the debtor, the date
of entering into the transaction and the subject-matter of the
transaction;
5) the amount of the debt, including the amount of the
principal debt, the interest on allocation of the amount of money
or other fungible property, the contracted or lawful interest and
the amount of a fine;
6) the debt recovery expenses (if any);
7) the procedures and deadline for the repayment of debt;
8) information regarding the possibility to express justified
written objections against the existence of a debt, its amount
and payment deadline, providing that at least 21 days from the
day of receipt of the notification are allotted for the
expression of objections.
(2) If a creditor or provider of debt recovery services sends
a written notification by mail or the debtor sends written
objections by mail, it shall be deemed that the information has
been received on the seventh day after its handover at the post
office, even if the addressee has actually received the
consignment sooner.
(3) During the time period specified for the expression of
objections by a debtor, the creditor and provider of debt
recovery services shall not be permitted to take debt recovery
activities (to include information regarding the debtor and his
or her debt in the debt history database or to take activities
which increase the expenses of debt recovery, etc.), which may
cause unfavourable consequences for the debtor.
Section 8. Obligation to Co-operate
and Expression of Objections Regarding a Debt
(1) A debtor has the obligation to co-operate with a creditor
and provider of debt recovery services.
(2) If a debtor admits a debt in its entirety or partially but
is unable to repay it according to the procedures or within the
time period specified by the creditor or provider of debt
recovery services, the debtor is entitled, by justifying why the
fulfilment of payment obligations is not possible, to offer his
or her procedures and time period for settling the payment
obligations.
(3) A creditor or provider of debt recovery services shall
examine the proposal of a debtor referred to in Paragraph two of
this Section for settling the payment obligations and give the
debtor an answer.
(4) Upon receipt of the objections of a debtor against the
existence of a debt or the amount thereof, the creditor or
provider of debt recovery services shall justify in writing the
existence of the debt and the amount thereof and, if requested by
the debtor, issue copies of the documents justifying the
existence of the debt and the amount thereof.
Section 9. Communication with Third
Parties
(1) In communication with third parties, a creditor and a
provider of debt recovery services are not entitled to disclose
information regarding a debtor without the consent of the
debtor.
(2) In communication with third parties, a creditor and a
provider of debt recovery services are entitled to provide only
the following information regarding themselves during the debt
recovery process:
1) the given name and surname of the person who is
implementing the communication;
2) the name (firm name) or given name and surname of the
creditor or the provider of debt recovery services;
3) the contact information of the creditor or the provider of
debt recovery services.
Section 10. Communication
Culture
(1) In communication with a debtor, it is prohibited:
1) to use aggressive means of communication (including
expression of threats and taking activities which prejudice
gender, age, race or ethnicity and safety, religious, political
or other beliefs, disability, social background and financial or
family status, as well as sexual orientation);
2) to communicate with the debtor in a manner offensive to his
or her dignity or honour;
3) to visit the debtor at his or her place of employment,
place of the performance of work or place of residence without
prior consent of the debtor;
4) to provide false or misleading information regarding the
consequences of non-payment of the debt.
(2) In communication with a debtor, the creditor and provider
of debt recovery services have a duty to observe
commensurability.
(3) Communication shall be considered to be incommensurable if
it:
1) takes place on Sundays or on public holidays determined by
Law;
2) takes place between the hours of 21.00 and 8.00 or without
prior consent of the debtor between the hours of 21.00 until
23.00;
3) encumbers the ability of the debtor to use the relevant
electronic means of communication for daily communication.
Section 11. Means of
Communication
(1) Unless otherwise prescribed by Law, communication with a
debtor shall take place using the means of communication and
contact information indicated in the lawful transaction entered
into between the creditor and the debtor.
(2) If a debtor is not reachable by using the means of
communication and contact information referred to in Paragraph
one of this Section, or if it has been requested by the debtor
himself or herself, the creditor and the provider of debt
recovery services are entitled to use the contact information
which has become known to them or used for communication with the
debtor during previous co-operation.
(3) If a debtor is not reachable using the means of
communication and contact information referred to in Paragraph
one or two of this Section, communication with the debtor shall
be implemented in writing, sending the necessary information to
the address of the declared place of residence of the debtor.
Chapter
IV
Debt History Database and Entry of Information Therein
Section 12. Debt History
Database
(1) The debt history database is an aggregate of data
regarding a debtor and his or her debt, which is recovered in the
name of or on behalf of a creditor, or has been recovered by a
provider of debt recovery services.
(2) The holder of the debt history database shall be the
provider of debt recovery services.
(3) The purpose of the debt history database is to provide
information to a third party so that it could assess the ability
of a natural person to fulfil the payment obligations.
(4) The provider of debt recovery services is entitled to
create a debt history database including information therein
regarding the debtor and the debt thereof, if one of the
following conditions is in effect:
1) the debtor has not expressed objections in writing against
the existence of a debt or the amount thereof;
2) the debtor has expressed objections in writing against the
existence of a debt or the amount thereof, but the court or
arbitration court has recognised the claim of a creditor or
provider of debt recovery services for the fulfilment of
obligations as justified and the judgment has entered into legal
effect;
3) the debtor has expressed objections in writing against the
existence of a debt or the amount thereof, but the provider of
debt recovery services has justified in writing the existence of
the debt and the amount thereof and issued copies of the
documents justifying the existence of the debt and the amount
thereof to the debtor.
Section 13. Inclusion of Information
in the Debt History Database
(1) Information regarding a debtor and his or her debt shall
be included in the debt history database if all the following
conditions have been met:
1) fulfilment of the payment obligations specified in a
transaction or legal act has been delayed by more than 60
days;
2) the period for the expression of objections by a debtor
specified in the notification of the provider of debt recovery
services has expired, and the debtor has not paid his or her debt
within this period.
(2) The following information shall be included in the debt
history database regarding a debtor and his or her debt:
1) the given name, surname, personal identity number of the
debtor;
2) the date when the information was included in the debt
history database;
3) the amount of the debt, including the amount of the
principal debt, the interest on allocation of the amount of money
or other fungible property, the contracted or lawful interest and
the amount of a fine;
4) the paid part of the debt;
5) the debt repayment duration;
6) the status of debt recovery (whether or not debt recovery
is taking place; the date on which debt recovery was terminated;
if debt recovery has been terminated - the reason for the
termination - whether or not there is a dispute regarding the
existence of a debt or the amount thereof);
7) if the creditor is the performer of economic activities -
the sector in which the creditor of the debtor operates in
accordance with Regulation (EC) No 1893/2006 of the European
Parliament and of the Council of 20 December 2006 establishing
the statistical classification of economic activities NACE
Revision 2 and amending Council Regulation (EEC) No 3037/90 as
well as certain EC Regulations on specific statistical
domains.
(3) The provider of debt recovery services shall notify the
debtor in writing of the inclusion of information into the debt
history database. The information included therein shall be made
available to third parties no sooner than 30 days after sending
of the notification to the debtor.
(4) A third party is entitled, on the basis of a written
contract with the holder of the debt history database, to receive
the information referred to in Paragraph two of this Section
entered in the debt history database on the debtor and his or her
debt if the debtor has given his or her consent thereto in
accordance with the procedures specified by the Personal Data
Protection Law. If the debtor alleges that he or she has not
given consent to the transfer of information entered in the
database to the third party, the person who alleges that the
consent has been given has the obligation to prove the existence
of such consent.
(5) If the provider of debt recovery services itself or
pursuant to information provided by a debtor or other person
establishes that the information included in the database of debt
history is inaccurate, incomplete or false, the provider of debt
recovery services has an obligation to immediately rectify these
shortcomings and notify accordingly the third parties who have
received the relevant information. The refusal of the provider of
debt recovery services to rectify the relevant shortcomings may
be contested to the Data State Inspectorate in accordance with
the procedures specified by the Personal Data Protection Law.
(6) Information in the debt history database shall be stored
for three years from the day of payment of the debt or from the
day when the obligations were extinguished in accordance with the
procedures specified by law. If a debt is not repaid, information
regarding the debt of the debtor shall be stored in the debt
history database until the day when right to claim has
expired.
Section 14. Information to be
Received in the State Information System Regarding a Debtor
In order to implement the requirements of Section 7 of this
Law, the provider of debt recovery services and the creditor who
has received the permit (licence) for the provision of crediting
services or which is a credit institution is entitled to acquire
the following information from the Population Register:
1) the declared place of residence of a debtor;
2) a confirmation regarding the death of a debtor.
Chapter V
Administrative Liability in the Field of Extrajudicial Recovery
of Debt and Competence in the Administrative Offence
Proceedings
[6 June 2019 / This
Chapter shall come into force on 1 July 2020. See
Paragraph 6 of Transitional Provisions]
Section 15. Administrative Liability
in the Field of Extrajudicial Recovery of Debt
For the provision of extrajudicial debt recovery services
without the special permit (licence) which is required by this
law or continuing the provision of extrajudicial debt recovery
services after the special permit (licence) has been suspended or
cancelled, or its term of validity has expired, a fine from
fifty-six to four hundred units of fine shall be imposed on a
natural person or member of the board with or without depriving
the member of the board of the right to hold certain offices for
a period of up to five years.
[6 June 2019 / Section shall come into force on 1
July 2020. See Paragraph 6 of Transitional
Provisions]
Section 16. Competence in the
Administrative Offence Proceedings
The administrative offence proceedings for the offence
referred to in Section 15 of this Law shall be conducted by the
Consumer Rights Protection Centre.
[6 June 2019 / Section shall come into force on 1
July 2020. See Paragraph 6 of Transitional
Provisions]
Transitional
Provisions
1. Section 5, Paragraphs two, three, four and five, as well as
Section 6 of this Law shall come into force on 1 February
2013.
2. Section 5, Paragraph one of this Law shall come into force
on 1 May 2013.
3. The Cabinet shall issue the regulations referred to in
Section 5, Paragraphs four and five, as well as Section 6,
Paragraph three of this Law by 31 January 2013.
4. A provider of debt recovery services is entitled to obtain
the information referred to in Section 14 of this Law from the
Population Register when he or she has fulfilled the requirement
specified in Section 5, Paragraph one of this Law and received
the special permit (licence) for debt recovery.
5. A provider of debt recovery services who has commenced debt
recovery from a debtor until the day of the coming into force of
this Law is entitled to enter information on a debtor and his or
her debt in the debt history database if both of the following
conditions have been met:
1) the debtor has not expressed objections in writing against
the existence of a debt or the amount thereof;
2) the provider of debt recovery services has legally acquired
the data on the debtor and his or her debt.
6. Chapter V of this Law shall come into force concurrently
with the Law on Administrative Liability.
[6 June 2019]
This Law has been adopted by the Saeima on 8 November
2012.
President A. Bērziņš
Riga, 27 November 2012
1 The Parliament of the Republic of
Latvia
Translation © 2021 Valsts valodas centrs (State
Language Centre)