The Debt Collection Procedure
The debtor is usually first requested to pay the outstanding amount out of court. For this the debtor is requested by us to pay his debts within 7-14 days. The extrajudicial demand is required, as otherwise the opposing party could immediately recognise the claim in accordance with § 93 ZPO. This would have the consequence that the creditor would have to bear all costs for the legal proceedings. Therefore, out-of-court solutions should always be sought first.
As the next step, the claims can be asserted in court with a dunning procedure or with a lawsuit.
This is followed by enforcement proceedings. A basic condition to start enforcement proceedings is that there must be an enforcement title. This title determines the identities of the creditor and debtor, as well as the type, substance and range of enforcement. A judgment by a court of law, an enforcement order effected by a default action, an enforceable deed or a settlement agreement can constitute such an enforcement title. Further, the creditor must make an application to the relevant enforcement authority. Depending on the object of the enforcement proceedings, either the District Court or a bailiff may be responsible.
Statistics & Causes
According to a study carried out by the daily newspaper “Die Welt“, medium sized companies lost circa 15 billion Euros in 2012, as they failed to enforce their rights to sums owed. Our experience also shows that small to medium sized businesses often refrain from starting enforcement procedures. The reasons for this are diverse: a lack of personnel, problems with office organisation, a lack of resources, and dependence from debtors can conflict with the enforcement of debt claims.