The Recovery of Debts from a Debtor in Germany from a Foreign Perspective

This page is devoted to the international reader seeking information on debt recovery in Germany. The following paragraphs may be of help in understanding the basic process of an Order for Payment procedure in Germany. Emphasis will be put on those elements of the procedure that distinguish the German Payment Order (Mahnverfahren) and the European (EU) Payment Order from a standard process abroad. As will be shown, one may quite righly label the German or European Order for Payment quick and efficient.

At first, from an international perspective it is of crucial importance to realize that the Order for Payment's process, be it the process of the German or the European Order for Payment, takes place during what would internationally speaking be known as the pre-trial phase. Yet, it is a complete process leading to a fully enforceable title, a default judgement; a process that ends without any of the parties ever having to attend a court in persona – provided that the claim is undisputed in the first place. It is iff, and only if, the defendant (debtor) objects to the Order for Payment, that the system is turned into an ordinary civil procedure before a normal court.

Secondly, since there is no ordinary trial the process is handled via a couple of standardized forms. The German Mahnverfahren merely requires the applicant to state his and his debtor's name and address, the ground for the claim, the amount of money and the appropriate interest as well as his extrajudicial costs. The European Order for Payment asks for a few more requirements in addition to that. Although it is also entirely paper or e,- standardized it demands a description of the case and of the evidence that could be provided to support the claim.

Once the Order for Payment's application forms are filled out and send to court, which, by the way, merely subjects the application to a check for formal requirements, the Order is serviced on the defendant. If he doesn't object to the claim within 14 days the debtor can file for an execution order. This enforceable title is then serviced on the defendant, who is yet given another chance to appeal. Nonetheless, the title can already be enforced against the debtor temporarily at this point even if he decides to lodge an appeal.

Importantly, the Order leaves no doubt about the seriousness of an appeal for the debtor. All orders contain extensive information about the consequences of an appeal and explain that an appeal should only be submitted with sound reasons against the claim. Furthermore it stresses the fact that an appeal causes the claim to turn into an ordinary action before a competent court; the costs of which – including the creditor's lawyer fees- have to be covered by the debtor, if a judgement would be rendered against the debtor.

Please follow this link to get to our Costs section in order to get an impression of the costs of the Mahnverfahren in your case. As has already been noted above, the defendant has to cover all costs, including the creditor's expenses, if a judgement is given in favour of the creditor. Many creditors outside of Germany prefer contacting debt–collecting agencies to stepping into legal action, because of the cost, inconvenience and time factor of legal proceedings. At the end however, when all out of court attempts have failed, one is left with no choice but to resort to legal action in order to recover the debts. The lawmaker realized this problem and stepped into visible action by putting in place a quick and efficient system to obtain a title and collect one's debts. Legal action can thus be seen as the preferred choice from the creditor's point of view in Germany. As with every legal issue advise should only be obtained from professionals; preferably from lawyers specialized in the collection of debts.

Allow us to reffer you to our section on the EU Payment Order for more information on the application of that order.

MMrecht has specialized in the application of the German Order for Payment for which reason we will exclusively process your claim(s) via the German Mahnverfahren.

We nevertheless strive to supply you with all basic information needed to make a reasoned decision. We therefore invite you to click on the following links to obtain more information about the Payment Orders and its related topics. At last please find answers to frequently asked questions in our FAQ section.