Debt collection in Germany: A complete guide

Debt collection is essential but sometimes complex for companies, especially when operating internationally. Germany, an economically efficient country, has a number of specific features that you need to be aware of in order to deal properly with local debtors. Sekundi presents the main features of German debt collection, as well as effective strategies for dealing with your debtors.

Debt collection figures in Germany

Payment terms in Germany and behaviour

Germany is one of the top three countries in the world for international debt collection, with an average invoice payment term of 30 days. 57% of German debtors pay their creditors without delay. This is relatively rare in Europe and the rest of the world, although inflation has taken its toll. To avoid debt collection costs and disputes with customers, it is advisable to be familiar with local laws and to surround yourself with competent people who can defend your rights.

As with any debt recovery process, it is important to attempt an amicable procedure, the Mahnschreiben, which consists of four written reminders sent by mail or email.

Legal provisions specific to Germany

Germany has a formal notice procedure: the mahnverfahren. This form enables creditors to obtain a writ of execution quickly, without having to go through a lengthy judicial phase.

The mahnverfahren begins by sending a payment order to the debtor, who then has two weeks to contest the claim. If the debt is not contested, the order becomes enforceable.

Since 2021 and the Covid crisis, a preventive restructuring law has been enacted: the Stabilization and Restructuring Framework of Companies Act (STARUG). Its aim is to protect a company's business and jobs from becoming insolvent. The Act allows the debtor to involve only some of its creditors in the reorganisation process. This is an important point, particularly for foreign claims, which are more easily excluded from these collective procedures.

Effective strategies to maximise your chances of collection

Using a debt collection agency in Germany

Despite the reputation of German debtors as good payers, debt collection networks such as Sekundi are an additional guarantee of protection against unpaid debts. Our German legal experts will support you in every out-of-court or court procedure without worrying about the language barrier. Thanks to their dunning tools to guarantee payment, our local agency can safeguard your business relations and the financial health of your company.

Legal procedures for enforced debt collection

If attempts at amicable collection fail, there are procedures for enforced collection. The mahnbescheid is a simplified payment order procedure that the creditor files with the court. This order becomes an enforceable title within two weeks if the debtor does not contest it.

If the claim is disputed, civil proceedings are brought between the debtor and the creditor. The court must examine the dispute and the evidence, then reach a decision. If the court rules in favour of the creditor, the latter obtains a writ of execution. Once this writ has been obtained, the creditor can initiate enforcement proceedings (zwangsvollstreckung) to seize the debtor's assets. Lawyers and bailiffs are involved in these procedures, which are costly for the creditor. It is therefore advisable to assess the debtor's solvency beforehand.

Debt collection in Germany is based on efficient and rapid procedures. However, to maximise your chances of recovering debts, you need to be aware of the specificities of German law. To avoid lengthy procedures and costs, Sekundi offers you its German support solutions with qualified specialists.