Do you have a German customer who is not paying your company invoice? For the most part, German customers do try and pay on time. Still, it is advisable to have good credit management. Often it is already clear whether legal proceedings will be required depending on the reaction to the first demand letter. The German legal system is focused on upholding clear contractual agreements, so you must have your paperwork in good order to prove your claim in a German court. Our German debt recovery lawyers have all of the experience and expertise to make your debtor pay. With an office in Düsseldorf, we are able to recover your claims in Germany effectively.
What can you do if your German customer isn’t paying:
- If your German customer is not paying on time, immediately send a reminder
- State a term of payment in the reminder
- As a general rule, the term of payment in Germany is 14 days
- Add a specification of your claim to the payment reminder
- In the payment reminder, announce that if your customer does not pay, you will hand over the claim for collection at the customer’s expense;
- Ensure that agreements are put down in writing;
- Send your correspondence by fax with proof that it was sent or save your emails.
Why choose a debt collection agency?
1. Our German Lawyers Are Familiar with Local Legislation
Our German debt recovery lawyers have extensive experience and knowledge of German legislation and regulations. In addition, they are fully aware of commercial traditions and culture in Germany. That makes it easier to get your German debtor to pay quickly.
2. Debt Recovery in the German Language
Our lawyers speak both your language and German, which allows them to overcome language barriers with ease.
3. Customised Debt Recovery
Our commercial debt recovery approach is customised to each unique case, and we provide you with tailor-made advice.
4. Straightforward Advice
We will always give our honest advice on the chances of success in your debt recovery matter. Putting your interests first is important to us; we endeavour to provide you with your options, as well as our advice on the best route to take. It’s easy to see how we put our core values of integrity and justice into practice.
The Debt Collection Process in Germany
The debt collection process in Germany can be divided into two stages. During the extrajudicial phase, collection takes place without Court intervention. During the judicial phase, we involve the Court in order to make your German debtor pay. Because we are a law firm, we can assist you during both stages.
1. Pre-legal Debt Collection
- Written demand letters and phone calls: We send the debtor a written demand letter and contact them by telephone, requesting that they pay your claim within a few days, together with interest and costs;
- Announcing legal proceedings: the most powerful manner of putting pressure on your German customer is the announcement that you are going to start legal proceedings. Usually, this announcement convinces them to effect payment. That is why it is advisable to promptly engage the services of a debt recovery lawyer, who can announce such proceedings on your behalf. This way, you prevent an unnecessarily protracted debt recovery process.
2. Judicial Debt Collection
If your debtor refuses to pay during the extrajudicial phase, after discussion with you, we can go to Court. We will always provide you with information in advance regarding the potential costs, and we only proceed with your permission. As the German legal system is particularly debtor-friendly, there are more stringent requirements for legal proceedings. The German Court demands that you demonstrate a valid claim. In Germany, we have the following options to litigate against debtors:
- “Mahnverfahren”: The ‘Mahnverfahren’ is an accelerated procedure for undisputed claims. Within a relatively short period of time, you can obtain an Enforcement Order (“Vollstreckungsbescheid”); which orders the debtor to pay both your claim and the costs of the proceedings. Your debtor has only a few weeks to challenge this. If that does not happen, then the order for payment becomes legally binding and we can commence enforcement proceedings, such as seizure of the debtor’s bank account or sending a bailiff to recover the debt;
- Ordinary civil proceedings (“Klageverfahren”): This may be the suitable procedure if your claim is disputes, however, our German lawyers will always be able to advise on the best solution for your claim. Both parties must present documentary evidence to support their position. After one or more hearings, the Court will render a decision. If the court enters a judgment in your favour, and the debtor still does not pay, we can use this to enforce your judgment, for example, by seizing the debtor’s bank account. Settling the matter prior to judgment always remains an option;
European Order for Payment proceedings:
- In the event of an undisputed claim between two parties based in EU Member States (except Denmark), it is possible to commence European Order for Payment proceedings. The lawyer handling your case can assess whether this kind of procedure is suitable in your case.
- For European Order for Payment proceedings, the creditor usually completes a standard form and submits this to the Court. The Court then issues a European Order for Payment. The debtor then has 30 days to state whether they object to the claim. If there is no response within the 30-day period, you may ask the Court to make the order for payment final (called a “declaration of enforceability”). This is a valid and enforceable judgment which is accepted in any Member State (except Denmark). The European Order for Payment is never appropriate for disputed matters (so not in cases where there is an argument about the invoice). The advantage of this procedure are speed and low costs (some Member States don’t even charge a court fee), but the disadvantage is that if it becomes disputed, the procedure comes to an end and an ordinary civil procedure will have to be started if the creditor wants to continue.