You may be confronted by different customs and trading traditions when doing business with a Dutch partner. Due to differences in legislation in the Netherlands and language and cultural barriers, debt collection in the Netherlands can be more difficult for you than expected. our litigation attorneys in the Netherlands explain the key issues.
SUMMONS TO PAYMENT
Under Dutch law, it is often necessary to send a proper summons to payment to the debtor. Also known as a notification in default. The summons gives the debtor one more chance to pay the invoice. If you have already sent a proper reminder for payment, collection costs and interest can be claimed immediately. The exact amount of statutory interest or statutory commercial interest due to you and your customer and any extrajudicial collection costs owed, will depend on the agreements in place.
If you have not yet sent a proper reminder for payment, note that debt collection in the Netherlands often starts with a reminder followed by the summons to payment.
ANNOUNCEMENT OF LEGAL PROCEEDINGS
An announcement of legal proceedings is usually the best way to get your Dutch debtor to make a payment. Most valid cases will be accepted by the debtor once the proceedings are announced. A Dutch debt recovery agency can help you announce these proceedings. This will stop the collection process taking too long.
You should file legal action if your debtor refuses payment in the extrajudicial phase.
PROCEEDINGS FOR DEBT COLLECTION under Dutch law
First, you can initiate proceedings by having an attorney issue a summons. This can be either for a normal legal action (also known as action on the merits or summary proceedings) or interlocutory (or summarizing) proceedings (so called debt collection interlocutory proceedings) at the Interlocutory Court. To ensure that debt collection interlocutory proceedings are successful, your case must not be too complicated. This means that you should prove your claim quickly.
The Dutch court can quickly and efficiently collect unpaid invoices through debt collection proceedings. These proceedings usually take much less time to process than other proceedings. The court will usually issue a verdict in two weeks which can then be applied immediately. Simple claims are best served by debt collection proceedings.
PROCEEDINGS OF ORDINARY CIVIL PROCEEDINGS
Our Dutch lawyers can initiate civil proceedings to recover your unpaid invoice in the Netherlands, regardless of whether there are disputed or undisputed claims. The debtor is then sued. The court may then order the debtor pay the claim. These proceedings allow for evidence to be presented in many different ways. The judge will usually try to reach an agreement between the parties in most cases. It also needs to be noted that this is usually a long process with simple civil procedures in the Netherlands taking anywhere from six to twelve months to complete. Complex cases may take up to two years and an appeal can then be filed by the debtor which may extend the case further.
PRE-JUDGEMENT ATTENTION in the Netherlands
In the Netherlands, it has been quite easy for a creditor to attach the assets of his debtor even before a court has determined that there is a (due-and payable) claim. This is known as a prejudgment attachment. Once the court grants the claim, the creditor may recover his claim from the attached asset.
APPLY FOR BANKRUPTCY
One of the most efficient methods of collecting debt in the Netherlands is the bankruptcy petition. It is not intended to make your debtor bankrupt but to force them to pay. Many companies don’t want to be declared bankrupt, so they are more likely to pay to avoid this. This is an effective way to collect debt. This procedure is also relatively inexpensive. If there is an undisputed claim, bankruptcy proceedings can be initiated.
A petition to declare bankruptcy for the debtor may be filed in many cases. The idea behind bankruptcy proceedings is that they are fast and inexpensive and that if the debtor can afford to pay, he will do so to avoid going bankrupt. The court will declare bankruptcy only if your claim is proven to exist. It must also be proven that the debtor has not paid at least one other invoice. However, a lot of debtors won’t take this chance and won’t wait for a hearing.
COMPENSATION FOR COLLECTION FEES
You can demand compensation for collection costs if the debtor fails to pay the invoice within 30 days of receiving the reminder. You may also charge interest for late payments. If the debtor fails to pay the invoice on their own, you may be charged the collection costs.
The maximum fee for consumers in the Netherlands is a percentage of the invoiced amount, as per law. An agreement can allow you to deviate from the above if the debtor is a business.
The interest begins to calculate on the first day after the payment term ends. It can continue until full payment has been made. The statutory rate will apply if no interest rate has been agreed upon (e.g., through a general agreement in the terms and conditions). Except where there is an agreement, the statutory commercial interest rate shall apply to deliveries to businesses or to Dutch authorities. Delivery to consumers is subject to the statutory non-commercial interest rate (unless an alternative rate has been agreed). The statutory interest rates for non-commercial transactions are much lower than those for commercial transactions.
LAWYER in the Netherlands SPECIALIZED IN DEBT COLLECTION
Do you have any question regarding a debt collection in the Netherlands or do you need specific legal advice regarding contract law in Holland? Our experienced English-speaking specialist lawyers in Holland will be happy to help you.