New procedure for undisputed debts collection in B2B

Analyse Recently, the recovery of unpaid and uncontested invoices between companies has become faster and cheaper. This is good news for many companies suffering a large number of overdue payments.

A new procedure has been introduced in the Judicial Code, by the so-called "potpourri" law of 19 October 2015. The aim is a fast and cost-effective collection of unpaid invoices which are not disputed.

This procedure has meanwhile entered into force.

1.    Who can invoke this procedure?

This procedure is only possible between companies with a business entity number regarding recoveries resulting from business activities, so called B2B.

This procedure can therefore not be used for B2C-claims against consumers, public authorities, non-contractual obligations or acts that are not carried out as part of a business.

Creditors may invoke this procedure to obtain an enforceable title within a short time and without court intervention.

However, the condition is that the invoice in question is not disputed by the debtor. As soon as there is any dispute regarding the amount, interest or collection costs, it is considered a disputed debt.

The condition is that the invoice in question is not disputed by the debtor

2.    The conduct of the proceedings

This procedure takes place entirely outside the court and has become thus a purely administrative procedure.

Firstly the lawyer assesses whether an invoice is considered an undisputed debt and therefore eligible for this procedure.

Then the lawyer can entrust the recovering of the amount due to a bailiff. The bailiff first means a summons for payment to the debtor.

Thus the debtor is informed of all amounts payable, including the costs of the summons, interest, penalty clauses and statutory increases. However, penal interests and clauses can not exceed 10% of the original amount.

In this summons is attached a response form to which the debtor must respond within a month.

Below are some possible scenarios:

  • The debtor pays the debt and the recovery ends.
  • The debtor asks the creditor to accept payment facilities.
    If the creditor agrees, the procedure is suspended. Procedure will be resumed if the debtor fails to meet payment deadlines.
  • The debtor may, in the response form, give the reasons why the debt is disputed, which then stops the procedure. This response must be motivated.

In case the given reasons clearly appear unfounded and are merely intended to stall the procedure, the debtor may be sentenced to a civil fine for abuse of process. In this case, the creditor still has the option to proceed and to recover his invoice in the traditional way.

3.    An enforcement order for the creditor

If the debtor does not pay and does not respond to the payment order, the bailiff will draw a report of non-contestation, eight days after expiry of the period of one month. This report will then be made enforceable by a Judge of the Management and Supervisory Committee.

Once this is done, the creditor has an enforceable title and the bailiff may collect the debt for him.

The only option still available to the debtor in this case is to take the initiative to bring the case before the court through a petition. This ensures the suspension of the execution until a court has ruled on the dispute. A fully executed recovery is considered to be a transaction between parties for the full debt.

The National Chamber of Bailiffs will establish a central registry for the collection of uncontested debts, in which will be collected the data needed to verify the correct conduct of the procedure and to declare the report of non-contestation to be effective. Bailiffs will transmit to the Central Register a copy of all documents available within the framework of this procedure.

4. Conclusion

In this procedure, there is no court intervention. Therefor, it is important that all formalities prescribed by this procedure are fulfilled.

If you are faced with a debtor who does not pay his invoices, we can check for you if you can use this procedure to collect your debts.

We can assist you in starting and monitoring the effective collection. In this context, our firm applies fixed rates based on the number of invoices you want to recover.

Do not hesitate to contact us should you have more questions.

Would you like to learn more about this subject?

Contact our experts or telephone +32 (0)2 747 40 07
Koen De Puydt

Koen De Puydt