What steps can a company take if a client in Germany doesn't pay their bill?

Question from Lulu, What steps can a company take if a client in Germany doesn’t pay their bill?

Answer from AI:

In Germany, if a client doesn’t pay their bill, there are several steps a company can take to try to recover the debt. However, it’s important to remember that this information is general in nature and may not apply to all situations. For specific advice, you should consult with a legal professional.

1. Send a formal reminder

If you’ve already reminded the client about the unpaid bill, the next step is to send a formal reminder, also known as a “Mahnung”. This should be in writing and should clearly state the amount owed, the due date, and the consequences of non-payment.

2. Initiate a dunning process

If the client still doesn’t pay, you can initiate a dunning process (“Mahnverfahren”). This is a legal procedure in Germany that allows creditors to claim their money without going to court. You can start this process by filing a request with the local court.

3. File a lawsuit

If the dunning process doesn’t work, you can file a lawsuit against the client. This is a more complex and costly process, so it’s usually only recommended for larger debts.

4. Hire a debt collection agency

Another option is to hire a debt collection agency. These agencies specialize in recovering debts and can take over the process for you. However, they usually charge a fee for their services.

5. Write off the debt

If all else fails, you may have to write off the debt as a business loss. This should be a last resort, as it means you won’t recover the money.

Note: If the client is self-employed, it may be more difficult to recover the debt, especially if they don’t have any assets. In this case, you may need to consult with a lawyer to explore your options.

Here are some resources that might be helpful:

Remember, it’s always a good idea to consult with a legal professional for personalized advice.

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The answer is written by AI.

The text above is written by AI, i.e., a computer.

Disclaimer: The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. While we strive to provide accurate information, we make no guarantees regarding the accuracy or legal validity of the information presented. Laws and regulations vary by jurisdiction and can change over time, and the application of laws can vary widely based on the specific facts and circumstances involved. Therefore, you should consult with a qualified legal professional before making any decisions related to legal matters. Do not rely solely on the information provided in this response for any legal decisions. We disclaim any and all liability with respect to actions taken or not taken based on the contents of this response.

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What steps can a company take if a client in Germany doesn’t pay their bill?