Security (sikkerhedsstillelse)
Also known as security, collateral, providing security, stille sikkerhed, garanti, depositum
Security is the collective term for whatever a debtor puts up to secure their debt — a charge, a guarantee, a bank guarantee or a deposit.
In practice
Security is what separates a risk from a loss. Without it you are an unsecured creditor, and unsecured creditors typically get nothing in a bankruptcy.
The decision belongs in the credit policy, not in the collections department: how much exposure do we accept without security, and at what point do we require it?
Where it commonly goes wrong
- Asking for security only once the customer is in trouble. By then you will not get it — and if you do, it can be clawed back into the estate in a subsequent bankruptcy.
- The security is agreed and the amount is never revisited. A guarantee of DKK 100,000 against an exposure that has grown to 400,000 covers a quarter.