WHICH COSTS ARE ASSOCIATED WITH THE PAYMENT OF MY DEBT?

Why am I being asked to pay collection costs in addition to my debt?

Collection costs are added to your debt if you have failed to pay the invoice(s) by the due date.

The permissible amounts of collection costs are regulated by the Law of Obligations Act of the Republic of Estonia.

For the amounts you may be charged for collection costs in each case, see the following section.

How much may I be charged for collection costs?

The permissible amounts of collection costs are regulated by the Law of Obligations Act of the Republic of Estonia. The latter sets out debt ranges based on which a collection company has the right to add collection costs to a debt.
Collection costs charged to private (i.e. natural) persons are regulated by § 1132 of the Law of Obligations Act.

During the term of a contract, a debtor may be charged a collection fee of 5 euros for each unpaid invoice.

For example, in the case of two unpaid invoices, the collection costs would be:

2 x 5 = 10 euros.

After expiry of the contract, collection costs in the following amounts may be added to the debt:

  • up to 30 euros in the case of a debt of up to 500 euros,
  • up to 40 euros in the case of a debt of 500–1,000 euros,
  • up to 50 euros in the case of a debt of more than 1,000 euros.

Upon initiation of court proceedings, legal costs are added to the debt. To check the costs associated with your debt, you may use our debt calculator HERE.

On what basis is late payment interest calculated?

Late payment interest is a fee paid to your service provider for the delayed payment of your invoice(s).

Late payment interest is charged for the period running from the time when the financial obligation becomes overdue to the complete fulfilment of that obligation. The percentage of late payment interest depends on the terms of the contract you have entered into with your service provider or vendor or the rate established by law.

The calculation of late payment interest continues even after the creditor has turned to a collection company or to court for collection of the debt or if the claim has been assigned to a bailiff.

What is interest?

Interest is a fee paid to the lender for use of the borrowed money. Interest may only be charged if agreed in the contract.

Over what period is interest charged?

Interest may be claimed for the period during which the borrower was entitled to use the money, i.e. from the time of payment of the money to the borrower until the due date of the repayment of the loan. After this period, the calculation of interest stops.