Practical guide to debt collection in Germany

German law offers a clear procedural ladder: informal demand, formal demand letter, payment order, and full litigation. Each step has defined costs and timelines.

Formal demand letter (Mahnschreiben / Abmahnung). Although not mandatory in all circumstances under the German Civil Code (BGB, §286), a lawyer's demand letter is the standard first step. It states the amount owed, the payment deadline, the accumulated interest, and warns of legal action. Under German law, if the debtor pays after receiving a lawyer's demand, the debtor must also cover the lawyer's fees. The letter also formally places the debtor in default (Verzug), activating statutory interest under BGB §288.

Payment order procedure (Mahnverfahren). This is a fast-track, automated procedure filed at the designated district court (Amtsgericht) for the creditor's region, available regardless of claim amount. It requires no documentary evidence: the creditor (or their lawyer) submits a standard form identifying the parties, the nature and amount of the debt, the due date, and applicable interest. The court does not examine the merits. The court issues a payment order (Mahnbescheid) and serves it on the debtor by registered mail. The debtor has two weeks to pay or contest. If the debtor does not respond, the creditor applies for an enforcement order (Vollstreckungsbescheid). The debtor has a further two weeks to contest this; if they do not, the Vollstreckungsbescheid becomes an enforceable title, allowing bank account freezes and asset seizures. Proceedings are conducted in German; foreign creditors are advised to use a German-speaking lawyer.

Ordinary proceedings (ordentliches Verfahren). If the debtor contests the Mahnbescheid or Vollstreckungsbescheid, the case converts to ordinary litigation. Proceedings are heard before the Amtsgericht (claims up to €5,000) or the Landgericht (claims above €5,000). At the Landgericht, legal representation by a German-admitted Rechtsanwalt is mandatory. The creditor must support their claim with documentary evidence: contracts, invoices, delivery notes, and correspondence.

European Payment Order (EPO). Under EU Regulation 1896/2006, EU-based creditors can file an EPO application for cross-border undisputed claims without appearing before a German court. If the German debtor does not oppose within 30 days, the order is enforceable in all EU member states.

Enforcement of foreign EU judgments. A final court judgment from any EU member state is automatically enforceable in Germany under Brussels I Recast (EU Regulation 1215/2012). No separate recognition (exequatur) is required. The creditor presents the judgment and the standard EU certificate to a German Gerichtsvollzieher (bailiff) for enforcement.

Interim protective measures (Arrest). German courts can issue a provisional seizure order (Arrest) to freeze the debtor's movable or immovable assets before a final judgment, provided the creditor demonstrates a plausible claim and a concrete risk that enforcement will be frustrated without the measure. This is an ex parte application; the debtor is not notified in advance. The applicant must typically post security to protect the debtor from unjustified losses.

The Mahnverfahren is the fastest domestic route: from filing to receipt of the Vollstreckungsbescheid typically takes four to eight weeks if the debtor does not contest. Actual bank account enforcement by the Gerichtsvollzieher follows shortly after.

Ordinary proceedings at first instance before the Amtsgericht or Landgericht average six months to two years, depending on the court's workload and the complexity of the dispute. German courts are generally well-organised, and procedural delays are less severe than in many other EU jurisdictions.

The European Payment Order, applied from outside Germany, typically produces an enforceable title in two to three months if uncontested. Detailed statistics on German court timelines are published by the Statistisches Bundesamt (Destatis).

A notarised instalment payment agreement signed before a German notary constitutes an immediately enforceable title (vollstreckbare Urkunde), allowing the creditor to enforce without further court proceedings if the debtor defaults on the agreed schedule.

Yes. Foreign companies have full procedural standing in German courts. The same rules on legal representation apply: self-representation is permitted at the Amtsgericht level; mandatory legal representation (Anwaltszwang) applies at the Landgericht and above.

For the Mahnverfahren, foreign creditors may file without a lawyer, but the form must be submitted in German and the debtor's details must be accurate. Given the complexity, most foreign creditors engage a local Rechtsanwalt.

A power of attorney (Vollmacht) signed by the authorised representative of the foreign company suffices; no apostille is generally required within the EU, but notarised translation of non-German documents is typically necessary.

Jurisdiction in German courts is generally determined by the defendant's place of domicile or the place of performance of the contract, following Brussels I Recast rules for EU creditors.

If the Gerichtsvollzieher cannot locate attachable assets or bank balances, the creditor receives a certificate of failed enforcement (fruchtlose Pfandkehrung or eidesstattliche Versicherung). This document is generally sufficient to write off the receivable as an irrecoverable bad debt under German and EU accounting standards.

Before initiating proceedings, creditors should assess the German debtor's financial position. German companies are required to file annual accounts with the Handelsregister (Commercial Register), which is publicly accessible. Credit rating agencies such as Creditreform and Dun & Bradstreet also provide detailed reports on German companies.

If the debtor is subject to German insolvency proceedings (Insolvenzverfahren), creditors must file their claims with the insolvency administrator (Insolvenzverwalter) within the deadline set by the insolvency court. Late-filed claims are admitted only to the extent funds remain after timely claimants are paid. Ursusnetwork monitors German insolvency registers (published in the Insolvenzbekanntmachungen portal) and can manage claim filings on behalf of foreign creditors.

If the debtor pays after the demand letter but was already in default, under German law the debtor must also reimburse the creditor's legal fees incurred in sending the demand, even if no court proceedings were ever commenced.

Ursusnetwork is a specialised international commercial debt recovery platform operating in over 70 countries, including Germany. Get in touch and obtain a free quotation for your case.

Q: Is there a minimum claim amount to initiate legal proceedings in Germany?

A: No. German law sets no minimum threshold for legal action. However, fees scale with the claim amount: for a €1,500 dispute, combined minimum attorney and court costs for extrajudicial demand and a Landgericht appearance total approximately €600 (excluding VAT). For very small claims, the Mahnverfahren at the Amtsgericht (cost: a flat court fee) is the most cost-effective route.

Q: What documents do I need to start a Mahnverfahren?

A: None, in the strict sense. The Mahnverfahren requires only a standard form listing the creditor and debtor details, the type and amount of the debt, the due date, and the applicable interest rate. No invoices, contracts, or delivery notes are submitted at this stage. Documentary evidence is only required if the debtor contests and the case converts to ordinary proceedings.

Q: Can I claim interest and recovery costs from a German debtor?

A: Yes. Under BGB §288, statutory default interest for commercial debts (between businesses) is the ECB base rate plus 9 percentage points, currently around 10-11% per annum. Contractually agreed higher rates apply if documented. Attorney fees for the demand letter are also recoverable from the debtor if the debtor was already in default when the letter was sent.

Q: What is the limitation period for commercial debts in Germany?

A: The standard limitation period under BGB §195 is three years, running from the end of the calendar year in which the claim arose and the creditor became aware (or should have become aware) of the debtor's identity and the claim. Some contract types have shorter periods. Sending a demand letter does not interrupt limitation; filing a court action or a Mahnverfahren application does.

Q: What if the German debtor wants to pay in instalments?

A: If the debtor acknowledges the debt but lacks immediate liquidity, an instalment payment agreement (Ratenzahlungsvereinbarung) drawn up and signed before a German notary constitutes a directly enforceable title (vollstreckbare Urkunde). If the debtor misses a payment, the creditor can proceed to enforcement immediately without returning to court. Ursusnetwork can negotiate and document such arrangements.

Q: How are German court fees calculated?

German court fees are set by the Gerichtskostengesetz (GKG) and scale with the Streitwert (value in dispute). For the Mahnverfahren, the court fee is a flat charge of 0.5 times the base fee unit for the claim amount. For ordinary proceedings, the base fee is typically 3.0 times the unit. The losing party bears both sides' costs, including attorney fees calculated under the Rechtsanwaltsvergütungsgesetz (RVG) tariff.