Collection of debts in Germany
The most important part of a
is the collection of debts and liabilities in the relationship with
debtors in Germany or with the customer's outstanding demands, if the German lawyer works for a private
corporation. The creditor to debtor relationship often starts with an intake agreement where the lawyer
gets to know the problems of his client, develops the facts of the
investigates where the debtor lives, increases the client's expectations, begins to develop strategies for
claims and explains the methods of legal action to the client.
Debt recovery in Germany
In Germany, only solicitors were in direct contact with the debtor. The creditor did not retain a lawyer if this
was necessary and he acts as a solicitor between the customer and the client. In most cases the debtor would be
obliged, under the German law, to accept payments for a certain case in a country in which he helds himselve out
as escaping, at any German city at which he normally remains or resides for effectuating the collecting of debts
by lawyers in Germany.
"debt collection in Germany"
is usually applied to lawyers, called such because they were a party to the original contract. At a second
law firms have the permission to collect debts
but the creditor assigns his accounts directly to a
lawyer in Hamburg on a fee-free basis, which usually costs nothing to the creditor, except for the court costs.
This however is independent on the individual legal service agreement that exists between the creditor, the
debtor in Germany and the collection agency.
is not allowed to take a percentage of debts successfully collected; this equals a Pot Fee or potential fee
upon a successful recovery of zero. This does necessarily have to be upon the collection of a full balance;
very often the fee must be paid by the debtor if he reaches recovering efforts when the debt is collected. The
German collection agency
earns money only if
the debt is collected from the debtor
Depending on the type of account, the age of the debt and how many attempts have been made to collect on it,
the lawyer's fee will always be less.
Collection of receivables and liabilities in Germany
We will help you if your customer in Germany does not pay.
We help you to cash your money if your debtor does not fulfill his
We will support you if your contractor does not fulfill his contractual obligations in Germany.
We will help you, if you have
goods or machinery supplied to Germany
and you do not get the money as
- No potential fee upon successful collection -
Hahn and partners - your experts for debt collection in Germany.
Do not hesitate to contact us via e-mail:
Visit our current website in Germany:
Collection agency in Germany
Not only debt purchasers who purchase sizable portfolios will utilize a lawyer to assist in managing their
outstanding demands across multiple collection methods. Given the time-sensitive nature of the assets, many in
the debt collections industry think there is a competitive advantage in utilizing the immediat collection
technique as it gives the creditor more control and flexibility to maximize the collections. Lawyers in Germany
offer legal help and a
flat fee collection service
This service sends a series of written reminders, usually fourteen days apart, instructing debtors to pay the
amount immediatly and directly to the creditor's lawyer
or risk a collection action and later on a court procedure. Depending on the terms of the contract, the
accounts may revert to a kind of hard collection status at the lawyer's regular rates if the customer does not
react or respond.
The usual form of a scheme of arrangement is an assignment by the debtor of his property (or a part of it) to
a trustee for distribution of the proceeds of sale among the creditors, rateably or in
The first step for a debtor who wishes to make a composition or scheme of arrangement of his affairs is to
apply to the local court for an interim order. This order has the effect of preventing a bankruptcy petition
from being presented. In his application the debtor must state that he proposes to make a voluntary arrangement
and he must name a nominee (an insolvency practitioner) and he has to present all open and unpaid invoices.
Within 14 days the latter must submit a report to the court stating whether a meeting of the debtor‘s creditors
should be called to consider the proposal.
Upon receipt of this report, if satisfied that such a meeting should be held, the court will direct that the
interim order be extended for a specified period of billing to the German client.
Thereafter the nominee must summon the meeting. The chairman of the meeting must report its deliberations to
the German court and, assuming that the court approves the proposal, every creditor who had notice of the
and was entitled to vote is bound by the arrangement whether or not he attended the meeting or voted in favour
of the proposal. After the report to the court the order continues in being for a further 28 days. This is to
allow the arrangement to be challenged by the debtor, any creditor entitled to vote, the counsel, or (where the
debtor is a bankrupt) the trustee of his state or the official receiver of goods within the
legal situation in Germany
After the 28 days no challenge is allowed. If the challenge is successful the period of the collection order
will be extended. If there is no challenge, or the cashing is unsuccessful, after the 28 days the arrangement
becomes binding and it is then for the client in Germany (thereafter known as a ‘German debtor‘) to assume
responsibility for the implementation of the arrangement. All voluntary arrangements have to be registered in a
register of individual voluntary agreements maintained by the Secretary of State.
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