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Attempting to Collect a Debt in Germany

Attempting to collect a debt in Germany can be difficult if one does not have a presence in the country. Any foreign individual or country will ultimately be subject to the German court system, and pursuing legal action from abroad is never easy. A debt collection company that has offices within the country will find it much easier to conduct the pursuit of the debtor, and eventually to follow a case through the court system, if that should become necessary.

Legal Process in Germany

Suing an individual or company in Germany for collection of a debt will start with filing an action in the nearest local court where that individual or company resides. There a judge will hear arguments presented by both sides, and usually urge them to come to an agreement between themselves. If no agreement can be reached, witnesses are generally called in to explain any fine points about the case, and to provide expert opinions on the facts in question.
After all expert testimony has been heard, it is usually somewhat clearer which side has the upper hand in the dispute, and which side the law favors, so the judge will again provide an opportunity for the two sides to come to an agreement between themselves. If this is still impossible, the only recourse left for debt collection in Germany is for an imposed rendering of decision, and after due consideration of all relevant information, the court will issue its finding several weeks later.

Both parties will be officially informed of the judge’s decision, and both parties are from that time forward legally bound to abide by that decision and act accordingly.

A seasoned, well-networked debt collector may be all the difference between successful collection and failure in Germany. The complexity underlines the need to use a company that has a sound track record in this regard.

How Collection Agencies Find the Debtors’ Whereabouts?

When businesses open a debtor’s account with a collection agency, the information they provide is often incomplete. While they would provide details like the outstanding amount owed and the age of the debt, they may not necessarily have the latest contact information for the debtors.


This is an issue a collection agency has to deal with the majority of the cases they pursue. Before commencing further proceedings, they need to know the debtors’ whereabouts. Information they would require includes home address/work address, home telephone number, mobile number and email address.


If the debt collector is tracing a company, it is worth undertaking a company credit check. The objective is to find information assessing whether they are actually making money, paying other suppliers, identifying directors’ names and addresses, and the company’s phone number. Armed with such information, they will not just be able to contact them, but also frame a strategy to tackle them.


When tracing a debtor, the debt recovery services in the UK will initially carry out electronic searches. As professionals, they have access to extensive sets of databases that they use to gather the required information about the debtors. The data can be occasionally historic, yet the information received is fully utilised. The search is often enough to find the new address of the debtors.


If the electronic search fails to produce the required information, or it is incomplete, the agency may instruct its local tracing agent to visit the relevant properties in person and attempt to locate the debtor. The combination of the two methods would succeed in almost all of the cases.


Once all the required information is in place, the debtor is sent mail mentioning the outstanding amount as well as the deadline to pay. Termed ‘letter before action’ it is sent on a headed paper, signaling to the debtor that the creditor is serious about pursuing them. They would wait for the deadline before taking the next step to retrieve the money owed. It is a tried and tested method, and a large proportion of customers are likely to call back in response.