Debt Collection and Enforcement Lawyer in Germany

Legal Solutions Made in Germany

Services
Our team
Contact us

Debt Collection
& Enforcement
Lawyer
in Germany

Legal Solutions Made in Germany

If a debtor does not comply with their payment obligations, a creditor may rely on enforcement proceedings to recover the sums owed. In the area of debt collection, the lawyers at Schlun & Elseven Rechtsanwälte are often approached by German and foreign businesses, freelancers and private individuals. We differ from non-legal service providers in that we can make use of the whole spectrum of legal instruments in order to effectively assert your rights. Regardless of whether you are looking for advice regarding amicable debt collection procedures, contested procedures or the enforcement of foreign judgments, our team is ready to support you.

Our Debt Collection & Enforcement Services

The Debt Collection Procedure in Germany

The debtor is usually first requested to pay the outstanding amount out of court. For this, the debtor is asked to pay their debts within 7-14 days. The extrajudicial demand is required, as otherwise, the opposing party could immediately recognise the claim per § 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 lawsuit.

Enforcement proceedings follow this. An essential condition to start enforcement proceedings is that there must be an enforcement title. This title determines the identities of the creditor and debtor and 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.

Amicable Debt Collection Procedure

An amicable debt collection is the preferable means to collect money owed. An amicable solution involves the creditor reaching an agreement with the debtor and it allows the debtor to repay in one or more installments. At Schlun & Elseven Rechtsanwälte, our debt collection lawyers are available to assist companies who are seeking to recover debts and will implement various legal mechanisms to enforce that repayment. Our lawyers can oversee the debt collection by sending the required notification and the proof of the unpaid amount of money. By working with our team, we can agree on a suitable proposal for the recovery of the amount of money owed. Based on the positive reply of the debtor, an agreement will be signed, and the debt collection procedure will be successfully closed.

During amicable debt collections, our lawyers will act on your behalf when contacting debtors, prepare the necessary documents for the process and ensure that your company is fully updated regarding developments.

    Contested Debt Collection: Legal Representation

    Our lawyers are ready to advise you and represent your interests during contested debt collection processes. We will oversee the submission to the competent court regarding the claim and the debts. Should the debtor challenge the claim, our team will prepare your case for the courts and the personal hearing. Our lawyers will source the required documents, such as expert statements and further evidence. Should the case not be successful at first instance, our lawyers will advise you regarding preparing the appeal.

    At Schlun & Elseven Rechtsanwälte, our debt collection lawyers are vastly experienced in debt collection cases, and will be support you throughout the process.

      Default Actions

      A judicial order for a default action is a civil court procedure to enforce monetary claims against a defaulting debtor, governed by § 688 ZPO. This order provides an alternative to the legal action procedure that does not require a detailed statement of claim, and, moreover, it is conducted without the need for evidence and oral proceedings.

      This default action can be pursued where the creditor assumes that the debtor will not object. A default action promises to enforce a financial claim faster and more effectively than by bringing legal action. All that is needed is to fill in and submit an application form, which the creditor can also do online. Moreover, the costs are lower than those of legal action.

      The debtor may object to the default summons in writing per § 694 ZPO. The objection period is two weeks starting with the service of the order for payment (§ 692 (1) No. 3 ZPO) or in the case of service abroad, the period is one month (§ 32 (3) AVAG).  If an objection is raised in time, an enforcement order may not be issued. At the request of one of the parties, the order for default action is then transferred to ordinary court proceedings (§§ 696 (1) sentence 1, 697 ZPO).

      Debt Restructuring

      At Schlun & Elseven Rechtsanwälte, our legal team supports clients with their debt restructuring. Our team can design and implement innovative debt restructuring options through consensual debt restructurings and financial recapitalisation. As a full-service law firm, our lawyers can utilise their knowledge of German insolvency law and corporate restructuring to create suitable solutions. Our tailored advice consists of a comprehensive analysis of your company’s goals, characteristics, financial structures and threats and, from there, assessing refinancing, recapitalisation and restructuring plans.

      Our legal team has worked with companies and corporate clients of all sizes.

      Legal Protection for Debtors

      Debtors have different kinds of legal protection against enforcement proceedings available to them (enforcement reminders, opposing enforcement in court, prompt complaints and third-party claims). Enforcement proceedings can become problematic when the debtor is insolvent. In that case, they cannot take place, as the collective satisfaction of all creditors is of higher importance.

      Therefore, if a creditor fears that there might be insolvency proceedings against their debtor, they are advised to carry out enforcement proceedings quickly. This action is the only way to prevent the damage that would follow a pro-rata satisfaction of all creditors’ demands out of the debtor’s funds.

        Recognition & Enforcement of Judgments

        Should a judgment regarding debt collection be made in a foreign jurisdiction, it is advisable to consult with a legal professional regarding its enforceability. The European Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (the CFI Regulation) means it is more straightforward for EU member states to recognise each other’s judgments than those from non-EU jurisdictions. According to § 36 of this regulation, “a judgment given in a Member State shall be recognised in the other Member States without any special procedure being required.”

        For cases involving non-EU court judgment recognition and afterwards enforcement, it is § 328 German Code of Civil Procedure (ZPO) that plays a vital role. § 328 ZPO states that one of its requirements is the reciprocity of recognition. This reciprocity indicates that if the other jurisdiction does not recognise German judgments, it is unlikely that those judgments will be recognised in German courts. Also, judgments need to be made in a manner that is compatible with the fundamental rights of German law.

        Schlun & Elseven Logo

        Practice Group: German Debt Collection Law