Frequently asked questions
Is a formal promissory note required for a money loan?
I’ve lent quite a lot of money to a friend (or so I thought). Now he is avoiding me. I’ve managed to make him sign a handwritten promissory note, and I don’t have any other proof. Now he says this note doesn’t prove anything, and it doesn’t make sense to bring it to court, because it hasn’t been signed in a notary’s presence. What can I do in this situation? According to the Civil Law, there is no any special form for concluding a loan contract, which means that the parties may have agreed on the loan orally. The major thing in this case is to prove the fact of the transfer of the money to the borrower. If the loan has been given in cash, a promissory note that you have mentioned may serve as proof of that fact (the content of the note must surely be examined first). The fact of issuing the loan may also be proven decisive.
A small outstanding debt from an invoice leads to huge interest and penalty
Hello! I have the following question: when moving out of the apartment, I ran up a small debt of several lats for a TV bill. Now, the company has sent my details to debt collectors, and they want me to pay three times as large the amount just as the penalty and different expenses. Is this legal? First, it should be noted that without knowing the specific facts of the case (the amount of the money claimed), it is not possible to provide a completely accurate answer to your question. At the same time, it should be pointed out that any penalty must be proportionate to the principal debt, and it cannot serve as the creditor’s enrichment tool at the debtor’s expense. Whether the amount of penalty is proportionate shall be determined by the court in each case, but it has been widely acknowledged in the case law so far that the penalty must not exceed the principal amount. It should also be noted that the permissible amount of expenses of debt collection companies is currently regulated by the Law on Extrajudicial Recovery of Debt and such companies are not entitled to request you to pay the amount of money in excess of the amount of the debt collection expenses as stated in the law.
Where do I go to recover a debt from a company?
I would like to go to court against X SIA. What court should I go to and how is the state fee calculated if the amount that I want to recover is LVL 6,000? Section 26(2) of the Civil Procedure Law states that “actions against legal entities shall be brought before a court in accordance with their registered address”. At the same time, Section 28 of the Civil Procedure Law sets forth that the applicant may choose the jurisdiction in the cases provided for therein. For example, an action arising from the operation of a subsidiary or representative office of a legal entity may also be brought before a court in accordance with the registered address of the subsidiary or representative office. An action regarding damage inflicted to the property of a private individual or a legal entity may also be brought in accordance with the location where such damage was inflicted. Furthermore, an action arising from the employment relationship may also be brought in accordance with the applicant’s place of residence or place of work. Jurisdiction depends on the specific circumstances of the situation, because there is also the exclusive jurisdiction. The contact information of the court under the jurisdiction of a specific address can be found on the judicial website tiesas.lv by entering the name of a city or municipality in the search field under the section Tiesu darbības teritorija (Court Coverage Area). If the amount of the claim is LVL 6,000 or EUR 8,537.23, the amount of the state fee is calculated in accordance with Section 34(1)(1)(c) of the Civil Procedure Law, which sets forth that the state fee for the claim in the amount from LVL 5,001 to LVL 20,000 shall be LVL 365 plus 3.2% of the amount of the claim exceeding LVL 5,000 (in accordance with the amendments to the Civil Procedure Law effective as of 1 January 2014, the state fee for the claim in the amount from EUR 7,115 to EUR 28,457 shall be EUR 519.30 plus 3.2% of the amount of the claim exceeding EUR 7,114). This means that the state fee to be paid for the recovery of the debt amounting to LVL 6,000 shall be LVL 397, i.e. LVL 365 plus 3.2% of LVL 1,000.
State fee when selling an apartment
I want to sell my apartment, but I’m not sure if I have to pay any state fee for the registration of the ownership title. When selling your property, we recommend that you pay attention to the provisions of the contract and consult with specialists, where possible. Speaking of the state fee, Sub-Paragraph 5.1 under Paragraph 5 of Cabinet’s Regulations No. 1250 sets forth that a state fee to be paid for the registration of the ownership the property value, but not more than LVL 30,000. The composition of the property value is described in Paragraph 8 of the mentioned Cabinet’s Regulations. Example: you are selling your apartment and the contract states that the purchase price is LVL 10,500, while the cadastral value is LVL 12,000. Since the cadastral value is higher than the purchase price specified in the contract, the state fee to be paid for the registration of the ownership title in the Land Register is LVL 240, which is 2% of the cadastral value. It is important that the contract includes the provision about the covering of the costs for the registration of the ownership title in the Land Register, i.e. which of the parties to the contract undertakes to cover these costs.
How does the property of an insolvent person pass into my ownership?
I have bought the property of an insolvent person from the administrator at an auction. What should I do now to register the property in my name in the Land Register? In accordance with Section 611 of the Civil Procedure Law, you must pay the full purchase price (the auction security you have paid will be credited to the purchase price) and the state fee for the application regarding registration of the real property in the name of the acquirer in the amount of LVL 50.00 or EUR 71.14 to the account specified by the administrator within one month after the auction. After receipt of the money, the administrator will prepare an application to the court regarding the approval of the statement of auction and registration of the real property in the name of the acquirer. At the same time, you must send an application for the putting in possession of the property to the same court. Upon entry into force of the court’s decision regarding the registration of the real property in the name of the acquirer and putting in possession of the property, you need to receive this decision from the court and make sure it bears a note regarding its entry into force. Upon receipt of the decision, you have to go to a notary to make a request for registration of the new ownership title. Finally, you have to submit the request for registration, the court’s decision and proof of paying the state and registry fee to the relevant Land Register Office.
The buyer turned out to be insolvent – is the money lost?
I would like to ask you a question about the insolvency proceedings. Z SIA has bought some goods from us, and we haven’t received payment for those goods. Now we’ve got to know that insolvency proceedings have been declared for Z SIA. What can we do to recover the money for the goods delivered? In accordance with Section 73 of the Insolvency Law, you should submit a creditor’s claim to the insolvency administrator of Z SIA. You can find the relevant official and address here , by entering the registration number or the name of the insolvent company in the search field. The creditor’s claim must be drafted in accordance with the requirements of Section 73 of the Insolvency Law, by including the following information into the claim: 1) the grounds for the claim; 2) the type of claim (a secured creditor or a non-secured creditor); 3) the amount of the claim, separately referring to the amount of the main claim and the amount of the ancillary claims (penalty, default interest); 4) the time the claim arose; 5) whether the creditor is recognized as an interested person within the meaning of Section 72 of the Insolvency Law; 6) the contact information including electronic mail address; 7) the bank account number. The creditor’s claim must be accompanied by the substantiating documents thereof or their derivatives, certified in the manner prescribed by Cabinet’s Regulation 916 – Procedure for Drawing Up and Execution of Documents. In accordance with Section 73(1) and Section 73(2) of the Insolvency Law, the creditor’s claim shall be submitted to the administrator within one month from the day when the entry has been made in the Insolvency Register regarding the declaration of the insolvency proceedings of the debtor. If you have missed the one-month deadline for submitting the creditor’s claim, you may submit such claim within a deadline not exceeding six months from the day when the entry has been made in the Insolvency Register regarding the declaration of the insolvency proceedings of the debtor, but not later than until the day when the plan for settling the creditors’ claims has been formulated. If you fail to submit the creditor’s claim within this deadline, you will lose your creditor status and your rights to claim against the debtor.
I would like to become an entrepreneur – how do I get registered?
I’m planning to start some business activities. How do I get registered and what should I do to make sure that everything is legal? A person may engage in business activities as a performer of business activities, or by establishing a merchant (a company).  Performers of business activities are divided into several categories, and the choice thereof depends on the activity planned, the turnover, the income received, etc. Different rules apply to different categories in regard to the obligation to get registered with the State Revenue Service, taxes to be paid and other formalities. To be able to provide comprehensive advice, it is necessary to know all the relevant details.  Another option to launch business activities is to establish a merchant – an individual merchant or a commercial company (a partnership, a limited liability company (SIA) or a joint stock company (AS)), depending on the type of activity, goals, projected turnover, etc. The most common of these merchants is the SIA. The merchant must be entered in the commercial register. To do this, the application must be submitted to the Register of Enterprises, by enclosing the documents specified in the Commercial Law. A different establishment procedure is set for every type of the merchant; the documents to be submitted to the Register of Enterprises and their drafting requirements differ as well.
I have run up some debts which I can’t pay off. How do I become an insolvent person?
Over the past years, I have taken several loans which I can no longer repay. Besides, I’ve run up some other debts. What should I do so that insolvency proceedings can be declared for me? To declare insolvency proceedings, an application regarding insolvency must be brought before the court. The application must contain the information on the amount of the debt, the composition of the property and other information set forth in the Civil Procedure Law. The application must be accompanied by proof of the information provided. Please note that in order to bring an application for insolvency proceedings before the court, you will have to bear at least the following costs: the state fee for the application for insolvency proceedings of a private individual (LVL 50.00) and a one-time fee to the administrator (LVL 400.00). When bringing the application before the court, you must enclose proof that you have such funds. The court will declare insolvency if the formal requirements have been met and if it has been proven that the amount of the existing debts exceeds LVL 5,000, and it is not possible to repay them, or if it has been proven that it will not be possible to settle debts exceeding LVL 10,000 in the future provided that the maturity date of the debts is within one year.
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Has my debtor actually become insolvent?
I have sold a car I owned to a relative. The car has been re-registered in the buyer’s name, but in the purchase contract we have agreed that the buyer will pay me in installments. Recently I’ve got to know that insolvency proceedings have been declared for the buyer. How can I make sure that the insolvency proceedings have actually been declared, and what should I do to get the outstanding purchase price? Information about whether and when insolvency proceedings have been declared for a private individual or a legal entity (as well as information about the appointed administrator of the proceedings) can be found in the Insolvency. You, as a creditor of the insolvent person, have the right to submit your claim to the relevant insolvency administrator. This should be done within one month from the day when the entry has been made in the Insolvency Register regarding the declaration of the insolvency proceedings for the buyer. Section 73(4) of the Insolvency Law sets forth the mandatory information that must be provided in the creditor’s claim. If you have missed the one-month deadline, you may submit your claim within six months from the day when the entry has been made in the Insolvency Register regarding the declaration of the insolvency proceedings. In this case, however, you will not have voting rights at the creditors’ meetings. Moreover, it should be noted that insolvency proceedings may be terminated at any time (also sooner than 6 months), and the creditors who have failed to submit their claims within the deadline will lose their rights to claim against the debtor. If the insolvency administrator acknowledges your creditor’s claim, you will most likely receive at least part of the amount claimed. This part depends on the income of the debtor during the insolvency proceedings, the amount of the property owned by the debtor and the total amount of the creditors’ claims.