Germany 
Debt collection in Germany usually starts with a review of the claim, the available evidence and the debtor’s current position. This includes checking whether the payment obligation is due and sufficiently documented, whether contractual performance can be proved, how the debtor has reacted to invoices or previous demands, whether there has been an acknowledgement or partial payment, and whether available information indicates enforcement or insolvency risks. The results of this review help determine whether voluntary recovery remains realistic or whether the claim should be prepared for the German payment order procedure or ordinary court proceedings.
Out-of-court debt collection remains useful where the debtor continues to operate, the claim is supported by a coherent documentary record and communication still has a realistic prospect of producing payment. A documented payment demand can also clarify whether the amount or legal basis of the claim is disputed and whether further negotiations are commercially justified before formal proceedings are started.
Where dialogue remains productive, the parties may discuss full payment, instalments or another documented commercial settlement. If the debtor stops responding, raises substantive objections or available information shows that voluntary recovery is unlikely, repeated reminders should not postpone the transition to the appropriate formal procedure.
Interaction with the debtor begins after sending a provable payment demand by mail, email or another suitable communication channel. At this stage, the goal is not to apply formal pressure, but to maintain legally appropriate out-of-court communication, clearly explaining the debt, its due date, the available evidence and the possible consequences of non-payment. The main task is to reach the key decision makers and seek a realistic solution, such as payment, instalment payment, return of goods, assignment of claims or settlement.
In German debt recovery matters, the informal out-of-court stage is generally pursued for up to 60 days where negotiations remain productive, unless the parties agree on an installment plan or another longer settlement arrangement. The 60-day period is a practical case-management benchmark and should not be treated as a mandatory waiting period before formal action. If negotiations do not produce a realistic prospect of payment, or the initial assessment shows that amicable recovery is not suitable for the case, it is appropriate to proceed to recovery through the court.
Before initiating legal action, the limitation period should be checked. For many civil payment claims in Germany, the standard limitation period is three years. As a rule, this period begins at the end of the year in which the claim arose and in which the creditor knew, or would have known without gross negligence, the circumstances giving rise to the claim and the identity of the debtor. After the limitation period expires, the debt does not automatically disappear, but the debtor may refuse payment if the limitation defence is raised. Agreements on limitation periods are not absolutely prohibited, but they must comply with the limits set by German law.
The limitation period may start again if the debtor acknowledges the debt towards the creditor, for example by making a partial payment, paying interest, providing security or making a statement confirming the obligation. For this reason, it is advisable to preserve evidence of partial payments, written debt acknowledgements, payment schedules, correspondence and any other communication that may prove acknowledgement of the debt.
For practical debt recovery, it is also important to determine whether the debtor is already in default. In Germany, a debtor usually enters default after receiving a payment demand following the due date of the debt; in certain cases, default may also occur without an additional demand, for example where the payment date was clearly fixed in advance. From the moment of default, the creditor may claim default interest. In commercial transactions where the debtor is not a consumer, the statutory default interest rate for payment claims is nine percentage points above the basic interest rate published by the German central bank. The basic interest rate is adjusted on 1 January and 1 July each year and is published by the German central bank.
For commercial debts, it is advisable to calculate not only the principal amount, but also interest, contractual accessory claims, documented recovery costs and, where applicable, the fixed compensation of 40 euros for default if the debtor is not a consumer. For later court recovery, it is advisable to preserve the invoice, contract, delivery or acceptance documents, correspondence, payment demand, interest calculation and evidence of partial payment or acknowledgement of the debt.
German law provides for judicial debt collection in the form of a general trial, a documentary procedure and a procedure for issuing a payment order.
General court proceedings are carried out by filing a written application, after which the court decides to initiate a case and prepares for the main hearing. Having accepted the claim for consideration, the court immediately sends it to the defendant and sets a deadline for the defendant to respond to the claim. The court must ensure the peaceful resolution of a legal dispute or individual controversial issues in each legal situation. The oral hearing is preceded by a conciliation hearing with the aim of amicably resolving the legal dispute, unless an attempt to reach an agreement has already taken place at the pre-trial settlement stage or the conciliation hearing is clearly hopeless. During the conciliation hearing, the court is obliged to discuss the facts and state of the dispute with the parties, freely assessing all the circumstances and, if necessary, asking questions. Parties appearing must be heard in person. If a party fails to appear at the conciliation hearing, or if the conciliation hearing is unsuccessful, the court must immediately schedule an oral hearing (interlocutory or main).
As a rule, the court makes a decision after the parties have discussed the dispute orally in court. With the consent of the parties, which can be revoked only in the event of a significant change in the procedural situation, the court may make a decision without an oral hearing. A decision without an oral hearing is unacceptable if more than three months have passed since the parties reached an agreement. After the end of the main hearing, the court makes a decision, which becomes final after the deadline for appealing it has expired.
The final judgment of the court of first instance may be challenged by the parties through an appeal within one month. The period begins when the fully reasoned judgment is served and, in any event, no later than five months after the judgment is pronounced. An appeal is admissible only if the value of the matter challenged exceeds 1,000 euros or if the court of first instance expressly allowed the appeal in its judgment. The appeal allows the higher court to review the challenged decision.
After examining the appeal, the court of second instance issues a judgment or, in cases provided by law, a ruling. A judgment of the court of second instance is not subject to another ordinary appeal. Further review by the Federal Supreme Court of Germany is possible only if such review is admitted or if the statutory requirements for further review are met.
This further review must be filed within one month after service of the fully reasoned second-instance judgment and, at the latest, within five months after the judgment is pronounced. At this stage, the Federal Supreme Court of Germany mainly examines legal issues and does not conduct a full new assessment of all facts of the case.
Filing a legal remedy does not automatically mean that the decision cannot be enforced. Many judgments may be provisionally enforceable before they become final, in some cases against the provision of security. Therefore, in debt disputes, it is necessary to assess whether the title can already be enforced provisionally and which protective measures or security may be relevant for each party.
The documentary process procedure is applicable to claims for the payment of a specified sum of money or the delivery of a specified quantity of other fungible items or securities, provided that all the facts necessary to support the claim can be supported by documents. The statement of claim must contain information about the plaintiff’s desire to consider the case in a documentary process. The plaintiff may, without the consent of the defendant, waive the documentary process before the end of the oral hearing so that the legal dispute remains pending in the ordinary course.
The national payment order procedure in Germany is mainly used for due monetary claims in euros where the creditor seeks to obtain an enforceable title quickly and does not want to start a full contentious court case immediately. In this procedure, the court does not carry out a full substantive examination of whether the debt exists, but the application must meet the formal requirements. After the payment order is issued and served, the debtor has two weeks to pay or file an objection.
If the creditor has its residence or registered office outside Germany, the competent court for this procedure is the Berlin-Wedding District Court, acting as the central court for such applications. This point is especially important for foreign creditors because filing with the wrong court may cause avoidable delay.
If the debtor files an objection within the time limit, the simplified procedure ends. If the creditor wants to continue recovery, the case must move to ordinary civil proceedings, where the creditor must substantiate the claim, submit evidence and take court costs into account.
If the debtor neither pays nor files an objection within two weeks, the creditor may apply for an enforceable payment order. As a rule, this application may be filed after two weeks have passed since service of the payment order and must be filed within six months after that service. The debtor may file an objection against the enforceable payment order within two weeks after service. If no objection is filed, the enforceable payment order becomes the basis for compulsory enforcement.
The European payment order procedure applies to cross-border civil and commercial cases within the European Union, except Denmark, where a specific due monetary claim is being pursued. There is no general 5,000-euro upper limit for this procedure; that amount limit belongs to a different European procedure. The application is submitted using a standard form and should state, among other things, the parties, the amount claimed, interest, costs, the basis of the claim, evidence, the court’s jurisdiction and the cross-border nature of the case.
After the European payment order is served, the debtor has 30 days to file an objection. To object, it is sufficient to contest the claim; a detailed explanation of the reasons is not required. If the objection is filed within the time limit, the European payment order procedure ends and the case generally continues under ordinary civil procedure, unless the applicant has requested that such continuation should not take place.
If the debtor does not file an objection, the European payment order becomes enforceable. Once enforceable, it may be enforced in other European Union member states, except Denmark, without a separate declaration of enforceability.
To start compulsory enforcement in Germany, the creditor needs an enforceable title. An enforceable payment order arises within the payment order procedure; after contentious court proceedings, the basis is usually a judgment or another enforceable title. Depending on the type of title, an enforcement clause and service on the debtor may also be relevant. Only after these requirements are met can specific enforcement measures be taken against the debtor’s assets.
Compulsory enforcement measures depend on the type of asset. They may include attachment of bank accounts and other monetary claims, seizure of movable property, a debtor’s asset disclosure, attachment of wages, realization of property and measures relating to immovable property. Not every measure is handled by the same authority. In some cases, an enforcement officer is involved; for attachment of claims, bank accounts and certain other measures, the enforcement court is often competent. In cross-border debt collection, it is especially important to collect information in advance about the debtor’s bank accounts, contractual partners, business address, assets, claims against third parties and payments due to the debtor.
If the creditor already has a foreign court judgment, the way to enforce it in Germany depends on the state in which the judgment was issued. Judgments issued in a European Union member state in civil and commercial matters are generally recognized without a special recognition procedure; a judgment enforceable in one member state may be enforced in another member state without a separate declaration of enforceability. If the judgment comes from a state outside the European Union, it is necessary to determine whether an international treaty applies or whether recognition and enforcement must follow the German rules on foreign judgments. In practice, a certified copy of the judgment, proof of finality or enforceability, translations and documents proving service on the debtor are important.
If the debtor shows signs of insolvency or over-indebtedness, it is advisable to assess whether insolvency proceedings may be relevant in addition to individual enforcement. A creditor’s application to open insolvency proceedings is admissible where the creditor has a legal interest in the opening of the proceedings and can sufficiently demonstrate both the claim and the ground for insolvency. In practice, it is important to preserve overdue invoices, contracts, payment demands, enforcement attempts, returned payments, unfulfilled promises to pay and other evidence of lack of liquidity.
Insolvency means that the debtor is unable to meet due payment obligations. For legal entities, over-indebtedness may also be relevant where the debtor’s assets no longer cover existing liabilities, unless continuation of the business is predominantly likely under the circumstances. This distinction matters because insolvency, imminent insolvency and over-indebtedness may affect the recovery strategy, negotiations, enforcement measures and recovery risks.
In insolvency proceedings, the challenge of previous transactions must also be considered. Transactions carried out before the opening of the proceedings may be challenged if they disadvantage the body of creditors and the statutory requirements are met. This challenge is not intended to punish an individual creditor, but to restore the insolvency estate where asset transfers or payments reduced the assets available to all creditors. In some cases, a payment received before the opening of insolvency proceedings may be reviewed and later reclaimed.
Practical risks include transfers without consideration, payments to related persons, security granted late, selective payments shortly before an insolvency application and actions carried out with the intention of disadvantaging creditors. Therefore, if the debtor already shows signs of financial crisis, payment agreements, new security, partial payments and settlements should be assessed not only from the perspective of debt recovery, but also from the perspective of insolvency challenge risk.
If you need support with international debt collection in Germany, an early legal analysis helps choose the appropriate strategy: out-of-court negotiation, payment order procedure, court action, compulsory enforcement, review of a foreign court judgment or measures related to the debtor’s insolvency. The strategy should be based on the evidence of the debt, the limitation period, default, the debtor’s asset position and whether it is more appropriate to obtain an enforceable title quickly or start full contentious court proceedings.
