Reminders, court orders, writs
'Mahnbescheid - Reminders, court orders, writs, verdicts and debt collection in Germany'
Disclaimer: This is not a complete and ultimate guide of what to do when you have incurred a debt but it gives you a fair idea of the procedure and your options.
In general, claims based on invoices are due immediately unless stated otherwise in the invoice itself or the creditor's T&C. Check any invoice you receive for this information and pay within either the stated period (for example: zahlbar innerhalb von vierzehn Tagen nach Rechnungstellung“ due within fourteen days of issue date) or immediately, i.e. within three working days. Some invoices, though not many, permit you to subtract 2% when paying immediately. a Payment in this context means that the complete amount of the invoice is in the creditors account or cash box by the day stated.
If you miss this due date the creditor will send you a reminder
. The content of this reminder determines the next step. If the reminder only states that you have missed the deadline along with a request to pay soon it is merely that a a friendly reminder.
If the reminder states nature, date and invoice number along with the demand of payment by a specific date it is the first notice
and the creditor is beginning to mean business. It should also bear the phrase erste Mahnung.
One superstition wide-spread even among the German population is that the creditor cannot take court action until you have received three notices. Urban myth, discard it as such!
Court order (Mahnbescheid)
If you miss this due date as well the creditor will in all likelihood apply for a 'court order'. As you are in default any costs from this point on will be added to your debt. Generally, creditors do not bother obtaining their own court orders, they hand the file with all the correspondence over to a law firm or a collection agency (hereafter a representative) that do this for a living and charge fees. The court order contains:
- The original amount of the debt
- The date the debt originated
- The service or purchase on which the debt is based - or - if the debt is not based on a service or purchase this must be indicated
- The interest rate and date when the interest originated (i.e. the day after the date named in the first notice)
- The costs for any notices etc.
- The costs for the application and issuance of the court order itself
The court does not
verify the justification of the creditors claim, it only verifies the content and legal requirements of the application. It issues the court order and has it delivered to your address without confirmation of receipt. The creditor does not
have to prove that you have received the court order to continue the procedure, only its delivery to a valid address. The court order is delivered in a yellowish envelope and bears a hand-written date of delivery on a field above the address. Take it seriously.
'2.1 Payment before receipt of the court order'
If you have paid the original claim to the creditor after the court order has been requested but before you receive it you are nonetheless liable for the costs incurred and the interest since the due date.
'2.2 Payment after receipt of the court order'
If you pay the claim to the representative stated in the court order, along with the supplemental costs including interest up to the date of payment (add one day to cover the period between your payment and their receiving the funds), the debt is satisfied, the procedure is finished.
Tip: Send the law firm or collection agency proof of payment and request written confirmation of payment. Keep that in your bank file or other for future reference.
'2.3 Objection to the court order (Widerspruch gegen den Mahnbescheid)'
You have two weeks from the date of the court orders delivery for your objection, i.e. your objection must be in the courts mailroom within two weeks of the court orders delivery. Say you receive the court order on Tuesday 14th October. The objection is due in the courts mailroom by Tuesday 28th October.
'2.3.1. Justified objection'
If you can prove that the claim is not yet due, was paid before the court order was requested, has been retracted or is in any other way invalid you can object to the court order by sending the form delivered along with the court order to the issuing court.
If you object to the court order with a valid argument get in touch with the representative immediately to prevent further court action. Back up your argument with documents if possible (proof of payment, letters, written transcripts of telephone calls along with date and name of your contact).
Of course, this information should have been sent after receiving the reminder or first notice. In Germany, the duty to minimize damage (Schadenminderungspflicht) reigns supreme. You may have to cover some of the costs, but not all, depending on when the claim became invalid.
'2.3.2 Objection without justification'
If you think that the claim is invalid and want to fight it out in court you can object to the court order by sending the form delivered along with the court order to the issuing court. The court forwards it to the representative. The representative can then initiate proper court proceedings, you will receive a claim with exhibits etc. and have to respond to it.
'2.4 No reaction to the court order'
If you do not object to the court order the creditor is free to apply for a writ.
Court writ (Vollstreckungsbescheid)
The representative applies for the writ
. Again, the court does not verify the justification of the claim; it only checks the contents and legal requirements. If these are fulfilled the writ is issued and delivered as above. This writ is equivalent to a default judgment and is enforceable upon delivery, it remains valid for thirty (30) years!
'3.1 Objection to the writ (Einspruch gegen den Vollstreckungsbescheid)'
You have two weeks from the date of the writ's delivery for your objection, i.e. your objection must be in the courts mailroom within two weeks of the writes delivery. You object to the writ by sending the form delivered along with the court order to the issuing court.
Your objection does 'not' halt execution proceedings unless you specifically apply for it!
The creditor can initiate proper court proceedings as above.
Execution of titles (Zwangsvollstreckung)
This is just an overview of the tools available to a creditor armed with an enforceable title (verdict, writ, notary document such as an IOU, etc.)
'4.1 Visit by the bailiff (Zwangsvollstreckungsauftrag)'
The bailiff appears without prior notice at your door, verifies your ID, shows the title and demands payment. He may also speak to any responsible member of your household.
'4.1.1'If you are not at home he leaves a notification with his contact details requesting you to contact him during his hours of business. If he doesn't hear from you the representative can obtain a search warrant.
'4.1.2' If you are at home and can pay, do so. If you still think that the claim is unjustified you will have a very hard time proving this, involving lawyers, courts, etc. The bailiff will accept a partial payment and request you to pay the remainder within a reasonable period (up to two weeks) or agree on installments to be paid to his care.
'4.1.3' If you are at home and cannot pay the bailiff will request you to let him enter. You can deny this without a reason. He will ask you if you have articles of value that he can impound and auction off if you do not pay within a reasonable period. You do not have to give him this information. He will go away, send the representative a report and demand his costs there. These costs are added to the costs of the proceedings.
The bailiff returns, armed with a search warrant. Again, you have the option of payment. If you cannot pay he can impound any property in your sole possession
that he deems suitable for auctioning off. If it is a luxury article designed for everyday use with a plain counterpart he can replace, for example, your 43€ plasma wall-mounted TV with surround technology with a black and white transistor TV with a built-in mono speaker.
Sworn affidavit of financial circumstances
If you cannot pay the bailiff will request you to fill out a questionnaire covering your financial circumstances, including income, savings, mobile and immobile property (car/real estate), capital generating insurances etc. This is a sworn affidavit, providing false or incomplete information may have criminal consequences. Based on the information in this affidavit the creditor can proceed with very invasive measures.
Income/Bank balance garnishing
The creditor can obtain an attachment order against your bank/your employer/your agency/other demanding that they cease payment to third parties (including yourself) until the debt is satisfied. This is a pretty fierce measure, financially and reputation-wise, and generally gets good results.
Transfer of insurance claims
The creditor can obtain an attachment order against your capital generating life insurance and have the policy transferred to his name, cancel the policy and receive whatever capital has accumulated. There goes your private pension fund.
There are other measures such as obtaining a mortgage on your property, impounding your snazzy Ferrari, leaving you with a beat-up VW Rabbit (but only if you can prove that you need a car for your livelihood) and garnishing your pension.
At any time in the course of these procedures you can try to negotiate a compromise with the creditor, of course always dealing with his representative, for either a one-off payment or installments.
Any writ is entered in the Schufa. Once the debt is satisfied I strongly recommend demanding written confirmation from the creditor or his representative that the Schufa has been notified. If you do not receive this contact Schufa with the necessary information.
Once the debt is satisfied make sure that you receive the cancelled title from the creditor or his representative!
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