Receive expert legal advice on debt collection matters

Questioner

I had a loan from a German company, after a period of deferral of payments we agreed on a payment arrangement. Recently I paid the entire balance. Now I receive an invoice from their law firm via email. I have never received mail or email from them. So never received a reminder. Am I obliged to pay these costs?

Lawyer

If a payment arrangement has been agreed and you have paid everything properly, you do not have to pay the invoice. This is only different if you should have met your payment obligations during the period of deferment and therefore legal costs have been incurred that should have been for your account. In principle, you should receive a reminder in the event of a debt collection procedure, at least according to Dutch law. It is possible that German law applies so that the above does not have to apply.

Questioner

Thanks for the response. There is a lot to find on the internet about Dutch law, but I can't find anything about the course of these kinds of cases in Germany. Unfortunately I don't have the money to hire a German lawyer for advice. I hope someone knows if these rules also apply in Germany: if you haven't sent any reminders etc., you can't recover the costs of the collection agency and lawyers?

Lawyer

Whether German law is indeed applicable in this case depends on the circumstances. In the event that both parties are Dutch and/or the agreement was drawn up in Dutch, Dutch law will apply under certain circumstances. There are also other conceivable cases where Dutch law will apply, for example if the parties have agreed to this. Unfortunately, I cannot assess this conclusively. In the event that German law applies, the following applies: According to German law, you are in principle obliged to pay the legal fees from the moment that you are 'in Verzug', i.e. in default. This is often the case after a reminder has been sent. However, there are also cases where you are obliged to pay the legal fees without a reminder having been sent. This can be the case, for example, if a payment date had been agreed and you did not pay on time. It is often the case that law firms demand too much in this case. This is unfortunately difficult to explain, but in principle it comes down to the fact that often instead of a "1.3 Geschäftsgebühr" only a "0.5 Geschäftsgebühr" can be demanded.

Questioner

Thanks for the response. Postponement of payment and a payment arrangement were reached in consultation, without my knowledge they apparently hired a lawyer, of which I now receive the bill afterwards. This is also the only contact (the invoice) that I have had with this lawyer. And it does indeed say '1.3 Geschäftsgebühr.

Questioner

Thanks for the response. There is a lot to find on the internet about Dutch law, but I can't find anything about the course of these kinds of cases in Germany. Unfortunately I don't have the money to hire a German lawyer for advice. I hope someone knows if these rules also apply in Germany: if you haven't sent any reminders etc., you can't recover the costs of the collection agency and lawyers?

Lawyer

I will gladly try to give a more detailed estimate. However, I need more information for this. When should you have paid originally? When was the payment arrangement agreed? Until when should you have paid according to the payment arrangement? When did you actually pay? When was the lawyer called in? Is it clear what exactly the lawyer did?

Questioner

In June 2016 I reported by phone that there were problems, in July I was called back with the message that I would first get everything in order and then I would report back to them. At the end of September I contacted them again by email. Then I got the answer that I had to submit a payment proposal within two days. The same email also said that there would be additional legal costs and that a lawsuit was imminent. I then indicated that I was very surprised about this, since I had not received any correspondence about this. They said they had sent reminders in the period from June to August. However, I never received them, after much insistence it turned out that they had been sent to the wrong address. My request to send this to me was refused on the grounds that this was no longer an issue as we had agreed on a payment arrangement. If I would just meet my payment obligations on time, there would be 'no problem' When we had made the agreements about the payments, I received a contract in German, which I had to sign. I refused this because I do not have a good command of German. When I asked if they could send this contract in Dutch, I finally got the answer that I would have to pay the translation costs myself. I refused this. Last month I paid off the remainder of the outstanding loan in one go. After which I received the relevant invoice from their lawyer this week. This note from the lawyer states that it concerns the period June 2016 to June 2017. So apparently, according to this note, they had already hired a lawyer after my first phone call, without informing me. It is not entirely clear to me what the lawyer ultimately did, but the invoice does include court costs, 1.3 business expenses and 1.3 transportation expenses.

Lawyer

It seems a bit complicated and in my opinion too complex for this forum. You write that you do not have money for a German lawyer. It may be possible to apply for compensation for the costs. If that were possible, there is only a personal amount of EUR 15.00. If you send me your email address, I will send you the (unfortunately German) form. If you fill it in, sign it and send it back to me in the original with the necessary documents, I will apply for compensation for you.

Questioner

Dear Markus, All I want to know now is if they can make me pay these legal fees without informing me about the legal steps this company has apparently taken. And despite us being in regular contact, and they refused to send the relevant documents to me.

Lawyer

I understand your question. Although this question is simple, it is complicated to answer and requires looking at the documents.

Lawyer

If you should have paid in June but did not do so, it is possible that you are indeed liable for legal costs even without having received a reminder. However, I do not dare to give a definitive answer to this either. If, for example, you had agreed otherwise with the other party by telephone, this does not apply. You further state that there are also court costs (i.e. court fees) charged. The other party has therefore probably started legal proceedings against you themselves. You can of course ask the other party to explain to you why they think the costs may be charged. You can also try to reach a settlement with them. However, it is probably a good idea to ask a lawyer for advice who has all the documents available and can discuss the case with you personally. As the colleague said, there is a possibility under certain circumstances to request legal aid for this.