Payment difficulties in Sweden and national dept collection

So many businessmen have experienced the old truth that doing business involves risks and may not always succeed. Sometimes the business plan runs aground, sometimes there are unexpected changes in the world that lead to a sudden increase in costs, sometimes laws change, and in rare cases, diseases can hit key people. Stoppage of cash flows quickly leads the company to payment difficulties, which in turn is followed by non-payment of invoices and state taxes. No one is safe from the unexpected.

In this article, we will focus on what happens if you run into payment difficulties while operating in Sweden, or if your customers owe you money for a long time and you have to deal with Kronofogden.

In Sweden, Kronofogden has both a debt enforcement and bailiff role

Kronofogden is a Swedish state agency whose main task is the processing and collection of debt claims and related activities, such as the organization of forced sales (exekutiv auktion). Kronofogden has offices in 32 cities and employs 2,300 people. Kronofogden is a compound word consisting of the words "krono", translated as crown, or country, and "fogde", translated as overseer, so kronofogden refers to a person of high position who does supervisory work for the state. Today, the holders of this office have an administrative role, where they help to determine and collect debts.

Kronofogden has a reputation as a very serious institution in Sweden. It is a respected, impartial authority with great rights. In the event that Kronofogden has been approached to collect a debt from your company, the company automatically has a stigma on it that cannot be easily removed. Swedes start to mention Kronofogden in conversations mostly when repeated reminders to pay bills and debt collection notices have not led to the payment of debts.

Before turning to Kronofogden with a debt claim, you should think about whether it is worth it. If you approach them without proper evidence, even if your claim is initially registered, the process will not get very far. Unfair and/or incorrect claims are filtered out in the first round. For example, a subcontractor who has signed a contract with an intermediary and not directly with the main contractor cannot simply collect debts from the main contractor using Kronofogden.

When contacting Kronofogden, you must have a clear factual basis to prove your claim. In order to achieve the best result, a cooperation agreement between the companies is necessary, as well as invoices submitted by you that have not been paid by the other party and a short explanatory letter for what you are owed.

The Kronofogden process takes time and cannot be forced

The process usually includes the following steps.

A company demanding payment of a debt submits an application for the debt (Ansökan). Kronofogden registers the filing of the claim and sends an injunction (Föreläggande) to the recipient of the claim, which the recipient must sign and return to Kronofogden - by doing so, he acknowledges receipt of the injunction (Delgivningskvitto). If no written response is received, a reminder will be sent initially. If this is also not answered, after 6 weeks Kronofogden will issue a default judgment (Särskild delgivning med juridisk person) regarding the legal person and the debt claim will be enforced.

If the recipient of the claim is of the opinion that the claim is not justified, he must react to the first letter - prepare a written objection (Bestridan) and send it to Kronofogden by post. Kronofogden now in turn sends a response to the claimant (Underrättelse), who is also given the opportunity to present an additional position taking into account the new information. After that, a decision (Utslag) is made on the claim. If the recipient of the debt claim decision acknowledges the debt confirmed and determined by Kronofogden, the next step is to pay or collect it. If the debtor contests the decision, matters are resolved in the county court (Tingsrätt). Kronofogden also helps organize the collection of confirmed debts (Indrivning).

Avoiding responding to Kronofogden's letters is unwise. In such a case, Kronofogden may make a decision in favor of the debt claimant.

To summarize the above, both parties can present their vision to Kronofogden at every step of the process. Therefore, the procedure also takes time. It should be taken into account that it takes months from the submission of the claim to the confirmation of the claim and the determination of the amount of the debt. Once you are familiar with the process, you can use this time to your advantage, such as finding a solution to debt financing.

What happens if you do not pay a debt claim that has been approved and set for payment by Kronofogden?

The short answer is that Kronofogden has the right to foreclose on your assets. At the same time, you enter the debt database, which in turn is reflected as a corresponding mark (Betalningsanmärkning) in the databases of credit companies and financial institutions. If the company has such a note, any possibility of using bank credit disappears. Further financial activities of the company can be done either in cash or as advances, which is not very practical.
Swedish companies are particularly sensitive to companies on Kronfogden's list. This tells them that this company is not a reliable business partner.

When dealing with Kronofogden, there is a lot of paperwork to fill out, the terms used in which are quite complex. Citizens who have a Swedish digital identity card (Bank-id) can do things digitally. However, foreigners, such as Estonians, have to complete the entire process on paper.
When dealing with Kronofogden, we always recommend contacting a company with the appropriate competence, who has experience in communication with Kronofogden and whose business languages include Swedish. WiseCounter AB consultants will find the best and fastest solution to your problems. Feel free to contact us if you have received a letter from Kronfogden or need help with debt collection.

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