In most cases, debt collection is initiated when you have not paid a bill (often only after one to three reminders). The debt collection procedure is briefly and simplifiedly divided into the following steps:
Unfortunately, financing is not possible if there are outstanding debt enforcement proceedings, seizures or certificates of loss.
We therefore ask you to delete all entries in the debt collection register before submitting a financing enquiry.
Debt collection request Debt collection and garnishment
The creditor submits the request for debt collection to the debt collection office responsible for your place of residence and pays an advance on costs, which depends on the amount of the debt being collected.
Order for payment
After receipt of the debt collection request, the debt collection office will send you the payment order in which you are requested to pay your outstanding debt within 20 days. Once you have received the payment order, you basically have two options: Either you pay within 20 days, or you raise a "legal objection" within 10 days and thus dispute the claim. If you pay the debt, including interest and costs, to the debt collection office within the time limit, the debt collection is terminated. However, it remains in the debt collection register.
Legal proposal: debt collection and seizure
If you raise a legal objection, the debt collection is stopped for the time being. Without a judge, the creditor can no longer proceed. The legal proposal does not have to be substantiated, because the creditor must prove that the claim exists.
Disposal of the legal proposal
There are two ways for the creditor to eliminate the advance payment: judicial opening and legal action. If he has a written acknowledgement of debt, a certificate of loss or even a judgment against you in his hand, he can take the quick and inexpensive route of opening of proceedings. If the claim is not based on any such document, the debtor creditor must assert his claim by filing an action for acknowledgment. This is a more cumbersome and expensive procedure.
Continuation of the debt enforcement proceedings: seizure or bankruptcy
If the court has definitively disposed of the legal proposal, the creditor can request the debt collection office to continue the debt collection. The debt collection office decides whether you must be pursued by way of seizure or bankruptcy. Roughly speaking, if you are registered as a merchant in the commercial register, you will be prosecuted in bankruptcy. In the case of debt collection for tax debts and alimony, all debtors are subject to garnishment. In the case of garnishment, your assets will be used to cover the debt being enforced, unless you absolutely need them to live or work. In addition, after deduction of your minimum subsistence level under debt collection law, your future income can be attached. The attachment of income lasts for a maximum of one year. In the case of bankruptcy, all assets that could be seized are liquidated. Income does not form part of the bankruptcy estate.
issuance of a certificate of loss
If, after one year, the realisation of the assets and the garnishment of income have not brought in enough to satisfy the creditor in full, the debt enforcement office issues the creditor with a certificate of loss: A document that states the amount of money that has remained unpaid in the debt collection. This amount does not bear interest. The claim pursued is now time-barred after twenty years. However, the issuance of the certificate of loss does not necessarily bring peace of mind: The minimum subsistence level under debt collection law does not include current taxes. It is highly likely that you will have built up new debts during the garnishment year. In addition, the creditor can use the certificate of loss to demand immediate repossession.
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