Debt collection


What lawyers do

Lawyers use letters and phone calls to contact debtors and try to convince them to repay what they owe. When lawyers can’t reach the German debtor with the contact information provided by the creditor, they look further using other sources and private investigators. They can also conduct searches for a debtor’s assets, such as bank, to determine a debtor’s ability to repay. Lawyers may report unpaid debts to credit bureaus to encourage consumers to pay, since delinquent debts can do serious damage to a consumer’s credit score.
Lawyers also contact delinquent borrowers in Germany who have already had a judgment against them, meaning that the court has ordered them to repay a certain amount to a foreign creditor. Even when a creditor wins a judgment, it can be difficult to collect the money. Creditors can hire German debt collectors to do this work, which may include bank accounts.

The debt collection

Lawyers often cooperate with debt-collection agencies, though some operate independently and some are also attorneys. Sometimes these agencies act in a strong way, collecting customers’ delinquent debts – debts that are some days past due – and remitting them to the original creditor. The creditor pays the collector no percentage of the amount collected, in Germany the debtor has to reimburse all costs of collection. Debt collection agencies and lawyers collect delinquent debts of all types: business debt, credit card debt, personal loan debt, medical debt, automobile debt.
Debt collectors get paid in a percentage of the open sum; the higher the sum, the more they earn. Lawyers tend to specialize in types of debt. For example, a single lawyer might only collect delinquent debts of at least 400,-€ that are less than two years old.
A reputable German lawyers agency will also limit its work to collecting debts that are within the statute of limitations, which varies by German state.
For difficult-to-collect debts, some collection agencies also negotiate settlements with consumers for less than the consumer owes. Debt collectors may also refer cases to lawyers who file lawsuits against customers who have refused to pay the collection agency.

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