German Lawyers

Debt recovery for creditors in Germany

Creditors who are owed money in Germany can turn to German Lawyers, a firm whose English-speaking staff handle recovery of unpaid money. The work covers debts from commercial agreements, unpaid bills, instalment credits, company debts and bank loans, and the firm advises on both the out-of-court and the court stages of recovery.

The first stage is amicable. The creditor asks the debtor to pay, sets a deadline and explains the consequences of not paying. Creditors can carry out this stage themselves or hand it to a debt collection agency or a law firm. The agency or firm sends the debtor the documents that prove the debt and asks for a payment agreement. When an agreement is reached and the first payment is made, the procedure is concluded. The firm notes that the amicable route is the simplest way to recover money, although for individuals it depends on the debtor being willing to pay.

Court claims in Germany

If the amicable stage fails, a claim can be brought before the competent court by a written statement that sets out the debt, the claim and the documents proving it. Small claims are heard by local courts and larger ones by district courts. There is no minimum claim for court proceedings, and the firm says court cases can take more than five months when the defendant files appeals.

The debtor is informed by the court and may respond in writing within four weeks, after which a personal hearing is scheduled. Hearings are mandatory in German debt collection cases. At the hearing the judge summarises the case and usually proposes a settlement. If the debtor does not respond or does not attend, the creditor can obtain a default judgment, a special procedure that German law provides for these cases. Where no settlement is reached, the court can hear witnesses and experts and deliver a judgment, typically between two and eight weeks after the trial. Either party can appeal to a higher court within one month of the verdict. Court fees depend on the size of the claim and are generally payable before the case moves forward. The law encourages settlement at the first hearing, and part of the fees is returned if the court does not need to write a judgment.

Enforcing a judgment and reaching debts abroad

A court's final decision obliges the debtor to pay. When payment does not follow, the creditor can ask for enforcement through a court-appointed officer, known in Germany as a bailiff. The bailiff identifies assets that can be seized to settle the debt and then carries out the recovery. Seizure of assets is available in German debt recovery.

Germany is an EU member state, so court orders issued in other EU jurisdictions are recognised here through a simplified procedure, and German orders can be recognised in other EU countries on the same basis. Recognition of orders from outside the EU depends on reciprocity: the other country must also recognise orders issued in Germany. The firm also points out that debtors have protection measures, such as oppositions, complaints and third-party claims. Creditors do not have to appoint a representative, though the firm says it is advisable.

Partner support and scope

For debt recovery in Poland, the firm refers clients to a partner business, DebtCollectionPoland. Its English-speaking lawyers can provide detailed information on the legislation governing the recovery of outstanding amounts from individuals and commercial entities, and they can guide creditors through each stage of a German case, from the first letter to enforcement of a court order.