Explanations of common terms

Glossary

Here you will find explanations of common terms in debt collection, payments and legal matters.

Term	Explanation
Arrangement / Composition	An agreement on payment between two parties. An arrangement typically involves a reduction of the debt amount.
Limited company (AB)	A company (legal entity) where the owners (shareholders) have no personal liability except under certain circumstances. A minimum share capital is required (currently SEK 25,000). Abbreviated AB.
Public recovery cases (A-cases)	Payment claims from the public sector — debts owed to municipalities and the state, e.g. taxes and fines.
Extension / Deferral	A decision by the Enforcement Agency or another authority granting a postponement, usually of a payment. The debtor is given more time to pay. Sometimes it may concern postponement of submitting certain documents, e.g. a tax return.
Direct debit	A recurring payment drawn from a bank account. You must instruct your bank to pay certain bills this way, and the company authorised to take money from your account must also offer this service.
Instalment	Fixed periodic part-payments made on a credit purchase.
Instalment plan	A form of credit purchase. You agree with the creditor on how to gradually pay a certain sum in part-payments until the debt is cleared.
Invoice notice fee	A fee added on top of the invoice amount, paid by the recipient. It covers the administrative costs of generating and sending an invoice.
Banking day	Days on which Swedish banks are open — Monday to Friday (excluding public holidays).
Price base amount	There are several types of base amounts; these change annually and are used to calculate various fees and benefits. They reflect inflation. The price base amount determines which court cases are handled as small claims and is set under Chapter 2, Section 7 of the Social Insurance Code.
Authority documents	For example, a power of attorney — a document showing who has the right to represent a person or company.
Exempt property (Beneficium)	The money and property that a person and their family are entitled to keep in the event of distraint, bankruptcy or debt restructuring.
Dispute	To object to a claim of some kind, usually a payment claim. When disputing, you state what you consider incorrect and submit your objections in writing to the Enforcement Agency or the court.
Credit default record	A note that someone has an unpaid debt established by the Enforcement Agency. Credit reference agencies (e.g. UC) register these records. They normally remain on file for three years for individuals and five years for companies.
Payment liability	Payment liability arises when someone takes out a loan or is to pay an invoice. If several parties are jointly involved, they are jointly and severally liable unless otherwise agreed. Both legal entities and natural persons can incur payment liability.
Payment order (summary proceedings)	A creditor may apply for a payment order at the Enforcement Agency. If undisputed, it results in a ruling that forms the basis for the Agency's debt recovery. If the Agency cannot serve the order, the creditor may be offered the option to arrange service themselves.
Ability to pay	A person's or household's ability to pay is based on disposable income — what remains after housing costs, interest, amortisation and other necessary expenses have been paid.
Payment reminder	A notice from a company urging a person or business to pay an overdue invoice.
Evidence	Material submitted to demonstrate that stated circumstances are correct, e.g. documents and testimony. Evidence can be written (documents etc.) or oral (witness or party statements).
Unsecured loan	A loan without collateral.
Guarantee / Surety	To stand surety for someone means that one or more persons or companies undertake to pay another person's debt if that person is unable to pay.
Guarantor / Surety	The person or company who provides a guarantee for another person's debt.
Creditor	A claimant — e.g. someone who has lent money, performed work or provided a service and has not yet received full payment; the party who is owed money.
Fixed interest rate	An interest rate that is fixed for a specified period.
Civil law	The area of law governing relations between persons or organisations. Tort law, inheritance law, contract law and property law are examples within civil law.
Service of process	Confirmation that someone has received a decision or order. Service can be by ordinary post, by a process server, or by public notice.
Disposable amount	The portion of your income that, after deducting tax and the protected exempt amount (beneficium), is available for distraint.
Default / Supplementary rule of law	A rule that is not mandatory. If two parties agree, they need not follow it. In civil proceedings, the parties may reach a settlement. The opposite is a mandatory rule, which cannot be contracted out of.
Late payment interest / Default interest	The interest payable when payment is not made on time. Unless otherwise agreed, interest under the Interest Act applies (the reference rate plus 8 percentage points).
Bankruptcy oath hearing	Occurs in bankruptcy proceedings. An oath is taken confirming that the bankruptcy estate inventory is correct.
Sole trader	A business form where the company and its owner are the same person. The owner is personally liable for all the firm's debts.
Annual Percentage Rate (APR)	The total of all costs of a credit — such as interest, invoice fees and set-up fees — expressed as an annual rate.
Private recovery cases (E-cases)	Debts at the Enforcement Agency where the creditors are private individuals or companies — e.g. rent arrears, loan debts, supplier debts and credit card debts.
Enforcement	Compelling a person, company or association to pay or act in accordance with a ruling or court judgment.
Enforceable title	A judgment, a ruling from the Enforcement Agency, or another decision that forms the basis for enforcement. It gives the creditor the right to request enforcement.
Enforcement auction	An auction where the Enforcement Agency sells seized assets and distributes proceeds to creditors.
Invoice	A written demand for payment issued when payment is not made immediately. Also an accounting voucher and VAT reporting document.
Invoicing	The process by which invoices are generated and sent to recipients.
Real property	Land divided into parcels. Certain fixtures are also classified as real property. Everything that is not real property is personal/movable property.
Real estate parcel	A plot of land with defined boundaries and a specific register designation. Buildings on the plot are legally treated as fixtures to the property.
Force majeure	An event that could not have been prevented or foreseen, potentially releasing a party from performing their part of a contract. Examples include war and extreme weather.
Claimant / Creditor	The party who has a claim to payment. Also called a creditor.
Claim / Receivable	A demand for payment from one person or company directed against another. The party seeking payment is the creditor; the party who must pay is the debtor.
Jurisdiction / Venue	The court in which a particular case must be heard under law or agreement. The most common venue is where the defendant is registered or has its registered office.
Power of attorney	The right to represent another person, usually in writing. The issuer is the principal and the recipient is the agent or attorney.
Natural person / Individual	A human being, as opposed to a legal entity (such as a company, association or foundation).
Protected amount	See Exempt property (Beneficium) above.
Order / Notice	A decision from a court or authority requiring a response or action. An order may be combined with a penalty fine if not complied with.
Due date	The date by which an invoice must be paid — i.e. by which payment must have reached the payee.
Overdue invoice	An invoice whose due date has passed.
Simplified service	Service effected by posting the document to the recipient, with the issuing authority sending a confirmation notice the following working day.
Small claims case	Also called a case of minor value. A district court case where the disputed amount is less than half the price base amount.
Settlement	An out-of-court resolution without the matter being tried in court. Very common in civil proceedings initiated by summons. A settlement may also be made a judgment of the court.
Good debt collection practice	Debt collection must be conducted in accordance with good practice — meaning no one should be subjected to unnecessary costs or harassment. Complaints may be directed to the Swedish Authority for Privacy Protection (IMY).
Grounds in civil proceedings	The underlying facts supporting the claim. If there are several claims, grounds must be stated for each.
Debtor	A natural or legal person who owes someone something.
General partnership (HB)	Operated by two or more partners who are always personally liable for the partnership's debts and contracts. Abbreviated HB.
Non-monetary enforcement	A form of enforcement not involving payment — for example eviction or removal of an unlawfully parked vehicle. Requires a prior ruling or judgment.
Main hearing (in civil proceedings)	A court hearing after which judgment is given. The parties, counsel, witnesses and others may be summoned. The court may consist of one or three judges.
Referral (of a payment order)	A disputed payment order is referred to the district court if a party requests it. The case is then handled in the same way as a summons application.
Higher court / Higher instance	The hierarchy of general courts in Sweden is: District Court, Court of Appeal, Supreme Court.
Mandatory rule of law	A legally binding rule that cannot be contracted out of.
Debt recovery	Measures taken by the Enforcement Agency to recover a debt, e.g. distraint.
Stay of execution	A decision to suspend measures pending further review. Does not mean the underlying decision ceases to apply.
Debt collection	A company that a creditor employs to help recover a claim. To operate as a debt collection agency, the company must hold a licence from the Swedish Authority for Privacy Protection (IMY).
Collection fee	A statutory fee that may be charged as compensation for the work of recovering a debt.
Debt collection agency	A company that carries out debt recovery on its own behalf or on behalf of others.
Debt collection notice	A demand requiring payment by a final date, failing which the claim may be referred to the Enforcement Agency. Only debt collection agencies and law firms may issue these notices.
Debt Collection Act	The act containing rules applicable to debt collection operations.
Collection measures	Normally consist of a demand letter (debt collection notice) stating that if the debtor does not settle the debt, the creditor will apply for a payment order or take other legal action.
Swedish Authority for Privacy Protection (IMY)	The authority that ensures good debt collection practice is observed and that the provisions of the Debt Collection Act are followed.
Interim decision	A temporary decision.
Insolvent	When a person or company is unable to pay their debts and the situation is not temporary.
Legal entity	An entity such as a limited company or general partnership, as opposed to a natural person. Legal entities can own property, borrow money or be sued just like individuals.
Appellant	A person or company that appeals a decision by an authority or court to a higher instance.
Limited partnership (KB)	A special type of general partnership with at least one limited partner (limited liability) and at least one general partner (unlimited liability). Abbreviated KB.
Bankruptcy	A legal process in which a court decides that a person's or company's affairs must be wound up because they cannot pay their debts. Remaining assets are sold and distributed among creditors.
Bankruptcy estate	The assets taken over by the bankruptcy administrator when a person or company is declared bankrupt.
Bankruptcy inventory	A list of all assets and liabilities in a bankruptcy estate.
Bankruptcy administrator	A person appointed by a court to manage and administer a bankruptcy estate.
Credit	Instalment purchases, loans and deferred payment are examples of credit. When payment is postponed, credit has been extended.
Credit assessment	An assessment of the repayment capacity of a person applying for credit.
Credit note	Amends a previously issued invoice. Issued when, for example, a price reduction occurs and carries a negative amount. Typically deducted from the next invoice or refunded.
Credit report	Information from a credit reference agency about a person's or company's creditworthiness — income, registered debts etc.
Creditworthiness	An assessment by credit reference agencies of income, debts and other factors. High creditworthiness makes it easier to obtain loans and be approved for credit purchases.
Public notice	Service by way of public announcement.
Attachment / Freezing order	A temporary court order aimed at securing money and/or assets pending a judgment.
Plaintiff / Claimant	The party who applies for a summons and makes a claim. May be either a natural person or a legal entity.
Final / Legally binding	A judgment or decision that has become final and can no longer be appealed.
Personal property / Movable property	All property that is not real property — e.g. securities, money, vehicles and furniture.
Movables / Chattels	Personal property not consisting of securities, money or rights — e.g. furniture and paintings. Often used in wills and estate inventories.
Value Added Tax (VAT)	A consumption tax included in prices for private consumers. Businesses must declare and pay VAT; rates are 25%, 12% or 6%. Some goods and services are VAT-exempt. VAT must always be specified on an invoice.
VAT	See Value Added Tax.
Oral preparatory hearing	The oral part of the preparatory stage in civil proceedings: a court hearing with both parties present where the court clarifies claims, evidential issues and attempts to bring the parties to a settlement.
Insolvency	When a person or company is unable to pay their debts on a non-temporary basis. See also "Insolvent".
OCR number (payment reference)	The reference number used when paying to a bank or giro account. Makes it easy for the payee to automate registration and bookkeeping of incoming payments.
Representative / Agent	A person tasked with acting on behalf of another — e.g. representing someone in court. Must hold a power of attorney.
Agency debt collection	When creditors engage an agent (a debt collection agency or law firm) to handle debt collection on their behalf.
Pledge / Collateral	Personal property provided by a borrower to a lender as security for a loan. Real property can also be pledged by handing over a mortgage deed.
Mortgage deed	Proof that a mortgage has been taken out on a property title.
Party	A natural or legal person directly affected by a matter. Agents, witnesses and assistants are not parties.
Consumer credit report	Another name for a credit report relating to a private individual. See "Credit report".
Closing argument	Finalargument at the conclusion of a main hearing, summarising what has emerged and why that party should succeed.
Case law / Practice	When statutory text does not provide a direct answer, reference is made to how similar matters have been decided in higher courts.
Legal precedent	A judgment or decision, usually from a higher court, that is significant for future rulings.
Limitation period	When the right to claim a debt expires. The period is 3 years for consumer claims, 5 years for taxes, and 10 years for other claims.
Interruption of the limitation period	The limitation period is interrupted when the debtor acknowledges the debt — e.g. by making a part-payment. A new period then begins.
Percentage point	The arithmetic difference between percentages. A reduction in interest from 8% to 7% is a decrease of one percentage point.
Leave to appeal	Permission for a higher court to hear a case on appeal. Not all appeals from the district court to the court of appeal are accepted.
Reminder fee	A statutory fee charged when a payment is overdue and a reminder invoice is issued.
Reference rate	The Swedish central bank's official interest rate, set twice a year. Late payment interest is the reference rate plus 8 percentage points.
Complaint under warranty	Notification from one party pointing out a defect — e.g. late delivery or a fault in goods or services.
Interest Act	The act governing when and how late payment interest may be charged on overdue payments. Always applies unless otherwise specifically agreed.
Interest rate	Interest expressed as a percentage of the principal.
Legal expenses insurance	Most companies have legal expenses insurance in their business insurance, covering a portion of legal costs when a lawyer is engaged in a dispute.
Legal expenses insurance policy	See "Legal expenses insurance".
Statement of facts	A description in the statement of claim, or before the court, of what a party considers happened in the case.
Confidentiality / Secrecy	A prohibition on disclosing information, whether verbally or in writing. Oral confidentiality is usually called a duty of confidentiality.
Promissory note	A written agreement containing a promise to pay a specific monetary debt. Serves as proof that someone owes a debt.
Debt restructuring / Debt relief	A process in which a private individual's debts are restructured so the debtor lives on a subsistence minimum and repays through an instalment plan (normally 5 years). After the period, liability for remaining debts ceases. Also available for sole traders.
Joint and several liability	When several persons or companies are jointly liable for a debt. Each is fully liable for the entire debt — a payment demand can be directed at any one of them.
Statement of claim / Summons application	The first document submitted by the claimant to the court. Must state the claim, the grounds and a statement of facts.
Process server	A person with a service-of-process assignment, engaged by a court or authority.
Summary proceedings	Proceedings at the Enforcement Agency to establish undisputed payment claims. The Agency issues a ruling that forms the basis for recovery or enforcement.
Defendant / Respondent	The person or company against whom a summons application, payment order or enforcement order is directed.
Defence / Answer	A document in which the defendant states their position on the claims in a summons, including any evidence cited by the claimant.
Security / Collateral	A guarantee of repayment — e.g. for a loan. Security can be a guarantee or a pledge.
Signatory authority	Having the power to represent a company — e.g. to sign contracts on its behalf. Important to verify when entering into contracts.
Third party	A natural or legal person affected by a dispute or contract without being a party to it.
Default judgment	A judgment issued by the court where one party has not responded to a summons or appeared after being summoned.
Civil proceedings	When two parties cannot agree a dispute arises. When resolved by a court it is called civil proceedings.
Disputed claim	When the debtor and creditor disagree about something relating to the debt — e.g. the amount owed — the claim becomes disputed.
UC (credit reference agency)	A credit reference agency. Many Swedish banks use UC for credit checks. Other agencies include Creditsafe and Bisnode. See also "Credit report".
Non-payment / Missed payment	When an invoice is not paid. Typically leads to a reminder and, if payment still does not follow, a debt collection notice.
Distraint / Attachment of assets	An Enforcement Agency decision to seize real or personal property to pay a debt. The most common form is wage garnishment. Can also be carried out against companies.
Distrainable assets	Real or personal property that can be seized in a distraint. It must have monetary value, be capable of being sold by the Agency, and belong to the debtor.
Ruling (by the Enforcement Agency)	The term for a decision issued by the Enforcement Agency in a payment order or enforcement matter.
Enforcement measures	Measures taken by the Enforcement Agency to recover money or to ensure that property is returned.
Enforcement fee	A fee charged by the Enforcement Agency as compensation for its enforcement work.
Value date	The date on which a sum of money is transferred from one account to another.
Enforcement (execution of judgment)	When the Enforcement Agency compulsorily carries out something ordered in a judgment or ruling.
Witness (in civil proceedings)	A person who testifies in court about what they have heard or seen. Witnesses constitute oral evidence.
Testimony / Witness statement	The witness's account.
Claim / Prayer for relief	What a party asks the court to decide — e.g. that someone must pay a certain amount.
Appeal against default ruling	If you have received a ruling from the Enforcement Agency you consider incorrect, you can apply for it to be reviewed. A default judgment cannot be appealed in the ordinary way but can be challenged, reopening the case. Can only be sought once.
Appeal	If you consider a decision or judgment incorrect, you can appeal to a higher court. Enforcement Agency decisions appeal to the district court; district court judgments appeal to the court of appeal.