The debt collection procedure: how a debt collection process works

A debt collection procedure proceeds in three phases: first, the amicable (extrajudicial) process involving reminders, demands, and formal notices; then, if necessary, the judicial process involving summons and judgment; and finally, execution via a bailiff. Most claims are paid in the first phase; only if that fails does the court become involved. Below is the complete process from A to Z, including time limits, costs per phase, and the point at which you move from one phase to the next.

A construction company completed a renovation worth €8,000 and heard nothing more afterward. After two reminders, a formal demand, and ultimately a summons, the money was in their account within four months — with collection costs and interest added on top. The process below is the route they followed.

The short answer

1. Amicable phase. Payment reminder, formal notice, and demand letter. For consumers, a proper 14-day letter is mandatory before you may charge collection costs.
2. Judicial phase. If payment is not made, a summons follows and — after the hearing or in absentia — a judgment from the judge.
3. Enforcement phase. With the judgment, a bailiff seizes wages, bank accounts, or assets.
4. Processing time. Amicable two to six weeks, judicial three months to a year, execution a few weeks to months.
5. Costs. Collection costs according to the WIK scale, court fees, bailiff's fees and — above € 25,000 — attorney fees.

Phase 1: the amicable process

The amicable process is out-of-court: everything you undertake without involving the judge. You go through three ascending steps.

• Payment reminder. A friendly reminder after the due date has passed. Often a misunderstanding or an invoice that has been overlooked.
• Demand letter. Firmer tone, with a new deadline. For consumers, this is the moment for the legally required 14-day letter.
• Demand. The final written demand with a strict deadline, the collection costs, the interest, and the announcement of legal action.

With a consumer , you may only charge collection costs after sending a demand letter that provides a payment term of at least fourteen days and specifies the amount of collection costs. For a business debtor (B2B), this 14-day letter is not a mandatory condition; here, collection costs and statutory commercial interest are generally due without a demand letter, unless otherwise agreed contractually. You can find more information about the structure of the final letter under the demand letter.

Costs and duration of the amicable phase

The extrajudicial collection costs follow the statutory scale (WIK): 15% on the first €2,500 with a minimum of €40. Expect a processing time of two to six weeks, depending on how quickly the debtor responds and whether a payment arrangement is necessary. The full calculation can be found in the Debt Collection Costs Act (WIK).

Phase 2: the judicial process

If the debtor fails to pay and the claim is undisputed, the case goes to court. This begins with a summons: an official writ served on the debtor by a bailiff, stating the date of the hearing and the claim.

• Sub-district court judge. Claims up to €25,000 are handled by the sub-district court judge. You do not need a lawyer in this case; you may litigate yourself or be assisted by a legal expert.
• District Court (civil). A lawyer is mandatory for amounts exceeding €25,000.
• Defense or default. If the debtor raises no defense, a default judgment almost always follows in which the claim is awarded. If a defense is raised, a substantive hearing follows.

The outcome is a judgment. In it, the judge orders the debtor to pay the principal amount, interest, collection costs, and usually legal costs. Please note: a judgment is a legal title to collect, but it does not automatically fill your bank account. More about this route can be found under the debt collection procedure.

Costs and duration of the judicial phase

You pay court fees (depending on the claim and whether you are a business or an individual), bailiff's fees for service, and — for amounts exceeding €25,000 — attorney fees. Expect the process to take three months to a year, depending on the workload at the court and whether a defense is presented. If you win, a portion of these costs will be recovered from the debtor; if you lose, you will bear the legal costs of both parties yourself.

Phase 3: execution by the bailiff

With the judgment in hand, the execution begins. The bailiff serves the judgment and can subsequently seize assets:

• Wage garnishment. A portion of your salary or benefit goes directly to you, respecting the protected amount.
• Bank attachment. Attachment of the debtor's bank balance.
• Attachment of goods. Movable or immovable property, which may be sold by execution.

The bailiff first investigates whether recovery is possible. In the case of a debtor without income or assets, execution yields little — in that case, your claim remains on paper. You take this risk into account before entering the judicial phase.

When does the amicable phase end?

You proceed to court as soon as it is clear that the debtor will not pay and the claim is undisputed. Warning signs include: the debtor failing to respond to the demand letter, making empty promises of payment, or repeatedly failing to adhere to a payment arrangement. If the claim *is* disputed — “I believe I owe nothing” — then an out-of-court collection process is pointless, and consultation through a lawyer or direct litigation is more logical.

Honest recommendation

For an undisputed claim where the debtor is simply paying slowly, you can often get quite far on your own: a polite reminder, a formal demand with the correct 14-day wording, and a clear formal notice resolve most cases. You do not need a lawyer or collection agency in such instances. Do seek assistance if the claim is disputed, if multiple parties or complex conditions are involved, or if you have to go to court. The judicial phase is a specialized field, and an incorrectly worded summons will cost you the case.

You can find in-depth information per phase under amicable collection, judicial collection , and the practical step-by-step plan to collect an unpaid invoice.

Frequently Asked Questions