Debt Collection in Germany: Out of Court Settlements

Most of our international clients seeking debt collection services in Germany would prefer that we negotiate a debt settlement out of court, if at all possible. Avoiding litigation can save time and money and may be especially desirable if you wish to preserve a business relationship with the debtor.

The attorneys at GRP Rainer LLP are experienced negotiators that can provide a variety of debt collection services in Germany if you would prefer an out of court settlement.

Out of Court Services

The majority of our international debt collection cases are resolved out of court. After our firm is retained to represent a client, we start working to recover debt in Germany.

First, documentation of the debt including copies of contracts, business orders, sales transactions, and correspondence will be requested. An analysis will be conducted of the legal issues involved in the claim, as well as possible problems that might arise.

GRP Rainer LLP regularly works with international trace and collect credit reference agencies that can find and provide financial information on a debtor. We can also investigate the debtor to determine if they have filed for bankruptcy or insolvency.

After conducting an initial review of your case and the financial status of the debtor, our German debt collection firm will send the debtor a “dunning letter”. This letter of collection will advise the debtor of your legal representation by our firm and notify them of the past-due amounts owed to your company. It is our goal in sending dunning letters to debtors to preserve the goodwill that might exist between both companies.

By the time most companies retain our services, they have already sought to resolve the bad debt over the telephone and have perhaps sent correspondence to the German debtor. For this reason, we typically do not dedicate your resources to additional telephone collection efforts, but have found that it is persuasive for many debtors to receive a dunning letter from a debt collection firm based in Germany


If typical pre-trial proceedings and out of court services do not resolve the debt to our client’s satisfaction, they may opt for arbitration as an alternative to litigation.
Arbitration is permitted under German Law and may also be included in a contract via an “arbitration clause.” An arbitration clause typically states that if there is a contractual dispute, the parties to the contract are required to settle the dispute out of court.

This alternative dispute resolution involves both parties reviewing the case with a neutral third party who then issues a decision that is legally binding for both sides. Unlike The decision made by the arbiter is enforceable against the creditor or debtor.

As noted above, even if arbitration was not initially contemplated in the contract, it may be agreed upon by the creditor and debtor after a debt dispute arises. Procedural rules from the German Civil Procedural Code or the International Chamber of Commerce are typically applicable to international debt recovery arbitrations in Germany.

How GRP Rainer LLP Can Help

GRP Rainer LLP are German debt collection specialists, with experience representing English-speaking clients facing out of court debt collection settlements and arbitrations. Our lawyers are fluent in both German and English and are experienced bilingual negotiators who are familiar with drafting legal documents in English. If your company needs to recover debt in Germany, contact us today to learn more about our German debt collection services.

About GRP Rainer LLP

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices in Cologne, Berlin, Bonn and Düsseldorf, Germany.

Michael Rainer
Lawyer, Managing Partner

GRP Rainer LLP Hohenzollernring 21-23
50672 Cologne

Phone: +49 221-27 22 75-0

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