When a foreign debtor sells the business, the claim usually survives. A share sale leaves the debt with the company. An asset sale may transfer it to the buyer under § 25 HGB, Art. 2560 c.c. or actio pauliana.
# Debtor Sold the Company and Still Owes You Money: The Cross-Border Playbook
The claim is almost never dead. In most civil-law jurisdictions, the buyer of a going business inherits the seller's debts by statute. In common-law jurisdictions, four doctrines can still reach the buyer, and every legal system has an actio pauliana or its equivalent for transfers made to defeat creditors. What kills claims is not the sale itself. It is the creditor who assumed the file was closed and did not open the commercial register.
| Question | Answer |
|---|---|
| Share sale | Company survives. Debt stays with the company. |
| Asset sale (Germany) | § 25 HGB: buyer liable if trading name continued. |
| Asset sale (Italy) | Art. 2560 c.c.: buyer jointly liable for booked debts. |
| Asset sale (France) | Creditor opposition within 10 days of BODACC notice. |
| Asset sale (US) | Four-factor test: assumption, de facto merger, mere continuation, fraud. |
| Transfer to related party | Actio pauliana / Anfechtung within 3 to 6 years. |
| Employment liabilities (UK/EU) | TUPE 2006 and Directive 2001/23/EC transfer automatically. |
| First action | Pull commercial register extract for seller and buyer. |
What happens to debt when a company is sold?
That depends entirely on the structure of the sale. A share sale changes the owners of the company. The company itself, the legal entity that signed your invoices, is unchanged. It still owes the money. An asset sale moves the operating business out of the old entity into a new one, and the old entity is often left as an empty shell. In most civil-law jurisdictions the buyer of the assets inherits the seller's trade debts by operation of law, subject to conditions. In common-law jurisdictions the default is the opposite, with four exceptions the creditor must actively plead. Before anything else, establish which type of transaction occurred. In Germany, Italy, France, Spain and the Netherlands, the sale of a going business (Unternehmen, azienda, fonds de commerce, onderneming) is published. A commercial register extract and a gazette search will tell you within hours whether the transaction was a share sale or an asset sale. Most lost claims at this stage are lost because the creditor never asked.The share-sale versus asset-sale distinction
In a share sale, the shareholders change. The company, its contracts, its assets and its liabilities remain with the same legal person. Your counterparty still exists. You send the demand to the same company name at the same registered address. The new shareholders are not personally liable. They simply own a company that owes you money, and they knew it when they signed the share purchase agreement. Their pricing reflected it. In an asset sale, the operating business moves. Machines, inventory, customer lists, contracts (usually by assignment or novation), sometimes employees, and sometimes the trading name. The seller entity remains as a legal husk. Unless a statute or contract transfers liability, the debt stays with the husk. Statutes and contracts, however, do transfer liability in most of Europe, and the question for a creditor is which doctrine applies.Successor liability by jurisdiction
| Jurisdiction | Rule | Statute or doctrine | Creditor-friendliness |
|---|---|---|---|
| Germany | Buyer liable if trading name continued, unless registered exclusion | § 25 HGB | High |
| Italy | Buyer jointly liable for debts appearing in statutory accounting books | Art. 2560 Codice Civile | High |
| France | Creditor opposition on sale of fonds de commerce, 10-day window | Art. L141-1 et seq. Code de commerce | Medium |
| Spain | General rule no transfer; employment obligations transfer under Workers' Statute | Art. 44 Estatuto de los Trabajadores | Low to medium |
| Netherlands | Asset sales do not carry commercial debt; actio pauliana under Book 3 BW | Art. 3:45 BW | Low |
| United Kingdom | Commercial debts do not transfer; TUPE transfers employment liabilities | TUPE Regs 2006, SI 2006/246 | Low |
| United States | No transfer by default, four exceptions | Common law four-factor test, UVTA | Medium |
Do you still have to pay if your debt is sold to another company?
Yes. A debt does not disappear when the creditor sells the claim or the debtor sells the business. The obligation is a legal relationship between the debtor and whoever currently holds the claim. When a creditor assigns, the debtor pays the assignee. When a debtor's business is sold, the question is whether the obligation moved with it. The answer depends on jurisdiction and deal structure, not on whether the debtor feels like paying.Actio pauliana, Anfechtung and fraudulent conveyance
Every developed legal system allows creditors to unwind transfers made to defeat their claims. In Roman-law-derived systems the remedy is the actio pauliana: France Art. 1341-2 Code civil, Italy Art. 2901 Codice Civile, Spain Art. 1291 Código Civil. In Germany the remedy lives in the Anfechtungsgesetz (AnfG) for out-of-insolvency transactions and in §§ 129 et seq. Insolvenzordnung inside insolvency. In England the doctrine is scattered across the Insolvency Act 1986 ss 238 to 246 (transactions at an undervalue, preferences, transactions defrauding creditors under s 423). In the United States the UVTA covers both actual and constructive fraud. Statutory limitation periods vary. Germany's AnfG generally allows four years from the transaction, ten years for intentionally prejudicial transfers under § 3 AnfG. Italy's actio pauliana runs five years from the act. France's action paulienne runs five years from the day the creditor learned of the fraud, capped at twenty years. The US UVTA sets four years generally, with a one-year discovery extension.| Red flag | Where to find the evidence | Claim type |
|---|---|---|
| Sale price below market value | Sale contract, valuation expert, comparable transactions | Constructive fraud, UVTA / actio pauliana |
| Sale to related party (family, ex-employee, parallel co.) | Commercial register, beneficial ownership registers, LinkedIn | Actual fraud, piercing the veil |
| Sale within 6-12 months of a known claim | Demand letter dates, litigation docket, invoice aging | Preference, Anfechtung § 3 AnfG |
| Same premises, staff and customer base | Site visit, trade directories, customer references | Mere continuation, § 25 HGB, Art. 2560 c.c. |
| Seller entity left as empty shell | Filed accounts, Schufa / Cerved / Infogreffe reports | De facto merger, actio pauliana |
| Continued use of seller's trading name | Gazette, website WHOIS, invoices issued post-sale | § 25 HGB firm continuation |
Can a debt follow you overseas?
Yes. A valid commercial debt is enforceable wherever the debtor has assets. Within the EU, the Brussels I Recast Regulation (EU 1215/2012) allows a judgment from one Member State to be enforced in another without an intermediate exequatur. Between the EU and Switzerland, Norway and Iceland, the 2007 Lugano Convention performs the same function. Beyond Europe, the Hague 2019 Judgments Convention is expanding the recognition map. A company does not escape a debt by moving assets abroad. It only changes which enforcement file the creditor opens.Can a foreign debt be collected in the UK after Brexit?
Yes, with different machinery. Brussels I Recast no longer applies between the UK and the EU for judgments in proceedings commenced after 31 December 2020. The UK rejoined the 2007 Lugano Convention application but accession is pending at the time of writing. In the meantime, creditors rely on the Hague 2005 Choice of Court Convention where there is an exclusive jurisdiction clause, and on common-law recognition at English common law where there is not. The outcome is a slower and more document-intensive process, but the debt remains collectible.The practical creditor playbook
The sequence that saves the claim is mechanical. First, pull commercial register extracts for the seller entity (Handelsregister, Registro Imprese, Infogreffe, Kamer van Koophandel, Companies House, state secretary filings). Establish the corporate status: active, dissolved, in liquidation. Second, confirm the deal structure. If the seller's registered capital is unchanged but the shareholders are new, it is a share sale. If a new entity has been registered at the same address, under a similar name, with the same business purpose, it is an asset sale or a de facto merger. Third, identify the statutory hook: § 25 HGB, Art. 2560 c.c., Art. L141-1, UVTA, and send a formal demand to both the seller and the successor simultaneously. This preserves the claim against both and prevents the successor from later pleading ignorance. Fourth, calendar the actio pauliana / Anfechtung limitation period from the date you first learned of the transfer. Fifth, if the red flags are present, instruct counsel to file the unwinding action before the limitation expires.Cross-border complications: which law decides?
When the seller is in one country and the buyer in another, the governing law of the transfer is a private international law question. The contract itself is governed by the parties' chosen law under Rome I (EU Regulation 593/2008), or by the law of the habitual residence of the characteristic performer in the absence of a choice. The question of whether a debt passes to the buyer is often characterised as a matter of company law, not contract law, and falls under the lex societatis of the seller (the law of the company's seat). In practice, creditors plead the most favourable statute that has a colourable connection: § 25 HGB if the trading name continues in Germany, Art. 2560 c.c. if the azienda is in Italy, and fraudulent conveyance in the buyer's jurisdiction.
This service is not appropriate if:
- **The debt is under EUR 3,000 and the debtor entity is a dormant shell with no successor.** The cost-benefit of a cross-border action against nothing does not work.
- **Your paper file is a disputed quality claim dressed as a collection.** A successor liability argument does not convert a disputed invoice into a good claim.
- **The sale happened more than six years ago and you never filed a demand.** Actio pauliana limitation periods have likely expired in every relevant jurisdiction.
- **You already signed a settlement release with the seller.** The release binds you against the successor as well in most jurisdictions.
How InterStation Handles a Debtor-Sold-Business File
1. **Commercial register intelligence pull on day one.** Extracts for seller and suspected successor, BODACC / Handelsregister / Registro Imprese gazette history, beneficial ownership registers. 2. **Deal structure analysis.** Share sale, asset sale, de facto merger or fraudulent conveyance pattern, with the applicable statute named in the internal brief. 3. **Dual demand letters.** Formal collection demand to the seller entity and the successor simultaneously, citing the statutory basis (§ 25 HGB, Art. 2560 c.c., Art. L141-1) and preserving the limitation period. 4. **Red-flag investigation.** Site visit, trade directory check, LinkedIn mapping of shared personnel, valuation benchmark against comparable transactions, packaged as an evidentiary bundle for counsel. 5. **Enforcement routing.** If the successor claim stands, amicable collection against the successor. If the red flags are decisive, coordinated actio pauliana / Anfechtung through local counsel within the statutory window. This is a registers-first file, not a call-centre file. The winning move is the one made in the first week, when the commercial register trail is still warm and the exclusion under § 25 HGB has not yet been registered. Where the corridor is Germany-Italy or Germany-France, the approach is similar in method to the one described in our briefing on [German Mahnverfahren for EUR 32 payment orders](/blog/interstation-german-mahnverfahren-eur-32-payment-order) and in our [cross-border skip tracing intelligence](/blog/interstation-skip-tracing-cross-border) note. For sector-specific successor cases involving manufacturing lines sold as going concerns, see our [manufacturing debt collection in Germany](/blog/interstation-manufacturing-debt-collection-germany-payment-delays) guide, and for the baseline framework, our [international debt collection intelligence](/blog/interstation-international-debt-collection-intelligence) piece.FAQ
Do you still have to pay if your debt is sold to another company?
Yes. The obligation does not vanish when either party changes hands. If the creditor assigns the claim, you pay the assignee. If your debtor sells its business, the debt stays with the original entity in a share sale and may transfer to the buyer in an asset sale under statutes such as § 25 HGB or Art. 2560 Codice Civile.
Can a debt follow you overseas?
Yes. A valid judgment is enforceable wherever the debtor holds assets. Inside the EU it moves under Brussels I Recast (Regulation 1215/2012). Between the EU and EFTA states it moves under the 2007 Lugano Convention. Globally the Hague 2019 Judgments Convention is expanding recognition. Moving assets abroad changes the enforcement file, not the liability.
Can a foreign debt be collected in the UK after Brexit?
Yes. Brussels I Recast no longer governs UK-EU judgments commenced after 31 December 2020. Creditors currently rely on the Hague 2005 Choice of Court Convention where an exclusive jurisdiction clause exists, and on English common-law recognition otherwise. The process is slower but the claim is collectible on the same underlying merits.
What happens to debt when a company is sold?
In a share sale the company keeps its debts; only the shareholders change. In an asset sale the debts stay with the seller unless a statutory successor liability doctrine applies (§ 25 HGB in Germany, Art. 2560 c.c. in Italy, Art. L141-1 in France) or the transfer meets the test for fraudulent conveyance, actio pauliana or Anfechtung.