A person or company ("debtor") in Germany owes you money but refuses to pay. What can you do?
Start by asking a lawyer to draft a letter
In most cases, sending a letter from a lawyer is enough to solve your problems. This type of correspondance is usually fairly simple to draft and should not be too expensive.
If the letter has not helped, you may want to start proceedings.
Think about the European small claims procedure for disputes under 5,000 euros
A mechanism has been set up within the European Union to facilitate debt collection between persons in different EU Member States for disputes of less than 5,000 euros.
To start the procedure, you need to fill out a form and send it to the competent court.
You will have to pay upfront the costs of the proceedings (depending on the amount of the claim), but these will be included in the amount the debtor has to reimburse.
The court will send your claim to the debtor within 14 days. The debtor has then 30 days to reply by filling in the part of the response form reserved for him.
Within 30 days of receiving the response from the defendant (if applicable), the court or tribunal has to either deliver a judgment, request additional information in writing from either party or summon the parties to appear at a hearing.
The copy of the judgment together with the certificate issued by the court is enforceable in all other Member States of the European Union without further formalities.
You can choose to fill in the form yourself and do not necessary need a lawyer.
Here is a practice guide published by the European Commission for users:
Going through the German enforcement proceedings
This procedure is a quick and inexpensive way to collect a debt, when no resistance is to be expected from the debtor. There is no limit to the amount that can be collected.
First, you will be asked to fill out a form containing, among others, the identification of the debtor and a statement about the owed amount(s).
Once the order for payment has been issued and notified to the debtor, the debtor has two weeks to object:
If the debtor does not object, the court will, upon request, issue an enforcement order. Again, the debtor may lodge an objection within two weeks of notification of the enforcement order. If, again, the debtor does not do anything during these two weeks, the order becomes fully enforceable.
If the debtor objects, no enforceable title can be issued. In such cases, it will be necessary to go through classic court proceedings to collect the debt.
If you are only established abroad, the automated enforcement proceedings will usually take place before the Wedding District Court in Berlin.
If you want to read more, here is a guide published by the EU Commission (in German):
Take your case to court (ordinary proceedings)
The above mentioned enforcement procedure is not mandatory. You can choose to go through the ordinary proceedings by filing a claim directly with the competent court (usually, this will be the court where the debtor has its seat if your contract does not provide otherwise).
If the debtor disputes the existence or amount of the claim, this is probably your best option.
Make sure that the court is competent to judge the dispute. This will save you time and money!
Don't hesitate to contact me in case of questions.