Debt collection in Belgium

Debt collection in Belgium begins with an analysis of the legal basis of the claim, the debtor’s solvency and the practical recovery options available in the case. At this stage, it is necessary to review the contract, invoices, purchase orders, delivery documents, business correspondence, any acknowledgment of debt, guarantees, payment terms and the date on which the debt became due and payable.

If the debtor is a Belgian company, it is also important to check its registration status, real business activity, registered office, apparent solvency, pending disputes, existing enforcement measures, assets located in Belgium and possible signs of insolvency. This assessment helps avoid costly proceedings when the debtor is already subject to a collective procedure or does not have sufficient assets for effective recovery.

If the initial analysis does not reveal opened bankruptcy proceedings, a serious dispute over the debt or an obvious lack of assets, a documented out-of-court recovery strategy can usually be used first. The next step depends on the nature of the debt, the status of the debtor, the strength of the evidence, the possibility of using a simplified procedure and the practical need to start ordinary court proceedings.

Out-of-court debt collection is based on written reminders, a clear demand for payment, negotiations and, where economically reasonable, a settlement proposal or payment plan. Negotiations may concern full payment, payment by installments, return of goods, set-off, additional security or another solution acceptable to the parties.

Communication with the debtor must remain legally controlled. If the debt is a consumer debt, Belgian law provides special rules for amicable recovery: the payment demand must contain the required information, the debtor must be given the statutory period, and if the debtor disputes the debt with reasons, collection pressure must not be increased. In commercial debt cases, the amount claimed, the legal basis of the debt, the payment deadline and the supporting documents must also be clearly identified.

The average time for informal out-of-court recovery may be up to 60 days, except where an installment plan or another repayment arrangement is agreed. This period should be treated as a practical reference point, not as a guaranteed result. The further progress of the case depends on the debtor’s response, the strength of the evidence, the identified solvency and whether the debt is disputed.

At the pre-court stage, a judicial officer may also be involved. The judicial officer may serve a payment demand, provide the supporting documents to the debtor and formalize the creditor’s claim. If the debtor does not pay, does not offer an acceptable repayment plan or disputes the debt with reasons, the creditor must choose between a simplified procedure, ordinary court proceedings or enforcement based on an already available enforceable title.

For uncontested monetary claims between businesses, Belgian law also provides a separate procedure for the recovery of uncontested monetary claims. In this procedure, a lawyer verifies whether the claim is uncontested and whether the conditions for using the procedure are met. The file is then transferred to a judicial officer, who serves the debtor with a payment demand together with the supporting documents and the response form. The debtor has one month to pay, dispute the debt with reasons or request payment facilities. If there is no payment, no accepted plan and no reasoned dispute, the judicial officer waits another eight days and may draw up a record of non-dispute, which can later acquire enforceable force. In this procedure, interest and contractual penalties are limited to 10 % of the principal amount.

Before starting court proceedings, the creditor must check the applicable limitation period for the claim. In Belgium, many personal and contractual claims are subject to a general limitation period of 10 years. However, this period should not be treated as automatically applicable to every type of debt. Some claims may be subject to special limitation periods depending on the nature of the debt, the contract, the status of the parties or the applicable substantive rule. The consequences of limitation are usually considered by the court when the defendant invokes them.

The limitation period may be interrupted, among other things, by the debtor’s acknowledgment of the debt, the filing of a court claim, a payment demand with procedural effect or an attachment measure. Under specific conditions, an out-of-court payment demand may also interrupt the limitation period. It must be sent by an authorized person, by registered mail with acknowledgment of receipt, to a debtor who has a domicile, residence or registered office in Belgium, and it must contain the necessary information about the claim and the interruptive effect.

This interruption by out-of-court payment demand can be used only once, without prejudice to other methods of interruption. After interruption, the limitation period starts running again from the beginning. This rule must be distinguished from the time limit for enforcing a judgment: where the creditor already has an enforceable court decision, enforcement of that judgment is generally subject to a 10-year period.

Belgian law allows judicial debt collection through ordinary court proceedings, a summary payment order procedure where its conditions are met, and a special procedure for uncontested monetary claims between businesses.

Ordinary court proceedings are usually started by serving a summons on the debtor to appear before the competent court. If the defendant has a domicile or residence in Belgium, the ordinary summons period on the merits is 8 days. If the defendant has no domicile, residence or chosen address in Belgium, the period is extended depending on the defendant’s location: 15 days for neighboring countries and the United Kingdom, 30 days for other European countries and 80 days for other parts of the world.

After the summons is served, the case is entered on the general list. The claimant and the defendant exchange documents, written submissions and observations according to the timetable set by the court or the procedural rules that apply. The court registry keeps the case materials, allowing the parties to consult the documents filed in the case.

When the case is ready for examination, it may be argued orally, handled under a short-debate procedure if the conditions are met, or continued in writing if the parties or their representatives agree. The judge may also organize an interactive discussion to focus on the factual and legal points necessary to resolve the dispute.

At the end of the hearing, the court issues a judgment. If the defendant does not appear at the hearing for which the case was scheduled or postponed, the claimant may request a default judgment. In that case, the court may grant the creditor’s claims if they are admissible, sufficiently supported by evidence and not contrary to public policy.

The judgment of the court of first instance may be appealed within the period provided by law. In many cases, this period is one month from proper service or notification of the judgment. The appeal period and the appeal itself may affect enforcement, unless the judgment is provisionally enforceable or a special rule applies.

A decision given on appeal may generally be challenged by a cassation appeal within 3 months from its service or formal notification. This remedy is not a third examination of the facts. The review mainly concerns the legality of the contested decision, the correct application of the law and compliance with essential procedural rules. A cassation appeal does not generally suspend enforcement of the decision automatically.

If the cassation appeal is dismissed, the contested decision remains in effect. If the decision is set aside, the case may be referred, within the limits of the annulment, to another court of the same level or to a differently composed court for a new examination.

The summary payment order procedure may be used for certain monetary claims whose amount does not exceed 1,860 euros. This procedure is optional and is available only if the debtor has a domicile or residence in Belgium. It must not be confused with the special procedure for uncontested monetary claims between businesses.

Before applying to the judge, the creditor must send the debtor a demand for payment. This demand may be served by a judicial officer or sent by registered mail with acknowledgment of receipt. It must include, among other elements, the requirement to pay within 15 days, the amount claimed, the indication of the judge who will hear the case if payment is not made, and the information required by law.

If the debtor does not pay within the period granted, the creditor may file an application with the court within 15 days after that period expires. The application must be filed in two copies and must state the subject of the claim, the exact breakdown of the amount, the legal basis of the debt, the competent court and the supporting documents. The application must be signed by a lawyer.

The judge decides in chambers within 15 days after the application is filed. The judge may grant the application in whole or in part, grant payment facilities or reject it if the conditions are not met. If the application is granted, the order has the effect of a default judgment. The debtor may lodge opposition or appeal. If the application is rejected, the creditor remains entitled to pursue the claim through ordinary court proceedings.

When the creditor obtains a judgment or another enforceable title and the debtor does not pay voluntarily, forced enforcement may be started. In Belgium, enforcement is carried out through a judicial officer. If the enforceable title is a court judgment, the judgment must first be served on the debtor. The judicial officer may then serve a payment command, which is the first enforcement act and the final warning before attachment.

After the payment command, waiting periods apply before certain measures. At least one day must pass before attachment of movable property, and 15 days must pass before attachment of immovable property. Enforcement may target bank accounts, claims against third parties, movable property, immovable property, securities, company shares and other property rights of the debtor. Third-party attachment allows the creditor to seize amounts owed to the debtor by a third party, such as a bank or a business partner.

Not all assets of the debtor can be attached in the same way. Belgian law provides for exempt assets and limitations concerning certain income, social benefits, pensions and items necessary to maintain reasonable living conditions. Therefore, the choice of enforcement measure must take into account the nature of the assets, the costs of the judicial officer, the priority of other creditors and the real probability of recovery.

If there is a risk that the debtor may hide or reduce assets before the dispute is resolved, conservatory attachment may be considered where the legal conditions are met. This measure is intended to preserve assets for future enforcement. In general, it requires a sufficiently determined, due and documented claim, as well as urgency connected with a risk to the debtor’s solvency.

In cross-border cases, recognition and enforcement of foreign court judgments depends on the country where the judgment was issued. A civil or commercial judgment issued in another European Union member state is generally recognized in Belgium without a special recognition procedure and may be enforced without a prior declaration of enforceability, provided that it is enforceable in the state of origin. The creditor must have a proper copy of the judgment and the certificate required under European rules. These documents must be communicated or served on the debtor before the first enforcement measure. After that, the specific enforcement measures in Belgium follow Belgian enforcement rules.

If the debtor shows signs of bankruptcy or insolvency, the creditor must adjust the recovery strategy. In Belgium, business bankruptcy is regulated by Book XX of the Code of Economic Law. A business may be declared bankrupt when it has persistently ceased payments and its credit is impaired. The procedure may be started by the debtor’s own declaration, at the request of a creditor or on the initiative of the competent public authority.

Once bankruptcy is opened, individual recovery actions are significantly limited. The court appoints a bankruptcy trustee, who administers the assets, verifies liabilities, realizes the assets and distributes the available amounts among creditors according to their ranking. For the creditor, the main objective is no longer only to obtain an individual judgment, but to file the claim correctly, support it with documents and follow the collective procedure.

The filing of a creditor’s claim must be made electronically through the central insolvency register no later than the date stated in the bankruptcy judgment. The creditor must attach the documents on which the claim is based and indicate the information needed to identify the creditor, the legal basis of the claim, its amount, and any privileges, mortgages, pledges or other security rights attached to it.

If the claim is disputed, it is verified within the bankruptcy procedure. The bankruptcy trustee may accept the claim, reject it or reserve its examination, and disputes may be submitted to the court. Therefore, the creditor should keep contracts, invoices, correspondence, delivery documents, balance confirmations, guarantees and all evidence proving the existence, amount and ranking of the claim.

In certain situations, transactions carried out by the debtor before the opening of bankruptcy may be challenged in order to increase the assets available to creditors. This may include gratuitous disposals of movable or immovable property, as well as transactions in which the value transferred by the debtor clearly exceeds the value received in return. The annulment of such transactions may increase the bankruptcy estate and improve the prospects of payment, although the result depends on the ranking of each creditor, the available assets and the values actually recovered.

If you are facing an unpaid debt in Belgium or an international debt collection in Belgium case, it is important to analyze the documents, the debtor’s solvency, the limitation period, the appropriate procedure, enforcement options and insolvency risks. A suitable strategy helps determine which route fits the case: negotiation, payment demand, recovery of uncontested monetary claims between businesses, summary payment order procedure, ordinary court proceedings, forced enforcement or filing of a creditor’s claim in bankruptcy.

# DEBT COLLECTION AGENCY BELGIUM

26.07.2024

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