Debt Collection Process in Germany

Debt Collection Process in Germany | Debt Collection Fees in Germany

1. Overview

Over 40% of German companies are not paying their invoices punctually. Thus, it’s wise to send a demand and it’s of great value that you simply set the payment interval within which the debt must be paid. A debtor that is German will seldom pay in the lack of a payment interval that is predetermined.

2. Claim placement

In case your customer doesn’t react to your demand, then you need to give the claim over InterStation Germany Team. We understand the best way to take critical action to be able to accumulate your debt claim and is a specialised debt recovery law firm with an office in Berlin and a German section in our HQ’s. Our native speakers have a perfect command of your debtors’ language and have a great understanding of culture and the law.

3. Cultural

There’s a fundamental cultural difference between the German and EU legal systems. Whilst the EU legal system intends to defend the lender, the German legal system intends to safeguard the debtor. It follows that a distinct (more demanding) strategy is called for against a debtor that is German.

4. Extrajudicial debt retrieval

Following the transfer of your claim, your debtor will be summoned by InterStation to pay both in writing and over the phone. In case your debtor doesn’t pay in consultation on you afterward, within a predetermined interval, legal proceedings will be commenced.

5. Legal debt retrieval

6. “Mahnverfahren”

The “Mahnverfahren” is a common and fast process for undisputed claims in Germany. Via “Mahnverfahren” proceedings, it’s potential, within a rather brief time period, to get an executable Court order against your debtor.

The popular “Mahnverfahren” has the following characteristics: fast; simplicity; cost effectiveness; as well as the recoverability of procedural prices.

Then the costs could be recouped in the event the debtor has assets.

In case the debtor fails to voluntarily obey the Court order the following step is always to begin performance measures.

In case a claim is contested substantive proceedings have to be commenced. Given that our office has already handled the claim from the very start, we can supply guidance immediately particularly as the information that is pertinent will have been obtained during the extraLegal stage. Prior to the commencement of proceedings, a debtors credit worthiness is also checked by us.

In this form of proceeding, claims have to be substantiated with reference to evidence. For this function, reference is created to witness testimony and to the records. The writ of summons is served in the debtor by the Court as well as the debtor has two weeks to react, after which the court gives the defendant an additional span of two weeks to submit a. Then the Court will grant ruling in default option in the event the defendant will not react within the mandatory interval.

In the event a defence is submitted by the defendant, then the Court will schedule one or more hearings. It might be crucial for maybe a specialist and witnesses to attend. At the final outcome of proceedings, its ruling will be pronounced by the Court.

A Court approved resolution is, in addition, an executable order of the Court. Both court resolution, ruling or a payment order remain valid for a span of 30 years.

In the event the debtor fails to settle the debt, then we can take the action that is most suitable to be able to carry out the payment order, opinion or Court resolution. Unlike in the EU, a German bailiff works below the instruction of the Court and is a public servant.

During the performance stage, it’s likely to put pressure to the defendant to pay the debt by means of a “Eidesstattliche Versicherung”. The “Eidesstattliche Versicherung” is a statement of means. Then it could be possible to make an application for an attachment order over them, if they’re in possession of assets.

7. Guidance on debt retrieval in Germany

Don’t wait to get in touch with our German Team regarding your debt recovery in Germany, early collections is the key for successfull collections. Use the Contact form and we will get back to you the same day.