Business

How to recover unpaid invoices in the European Union?

Are you a business professional trying to collect outstanding invoices? If your debtor is domiciled in the European Union (EU), Denmark excepted, you have different means to collect a debt depending on whether it is more or less than EUR 5,000.

Who can recover the debt?

Each Luxembourgish or foreign creditor (natural or legal person) who is owed a debt by a person or company domiciled in Luxembourg or abroad.

What can I do before taking legal action?

If despite several reminders and dunning letters, the debtor still hasn't settled their debt, you can send a formal demand either by registered letter with acknowledgement of receipt or have it served by a bailiff.

If the formal demand remains without effect, you can take legal action.

How to recover unpaid invoices of less than EUR 4,000 or 5,000?

If the amount of your claim is less than EUR 5,000, you can bring a small claims procedure to the magistrate's court (which is the competent court in Luxembourg for these matters).

If your application is complete, the court will send an answer form and a copy of your application to the debtor. The debtor then has 30 days to respond. Once the deadline has passed or if the debtor responds, the judge will give a judgment that you, provided your claim was successful, can have enforced by a bailiff.

If the amount of your claim is less than EUR 4,000, you can opt for a simplified small claims procedure which will be enforced by a bailiff.

How to recover unpaid invoices of more than EUR 5,000?

You can apply for a European payment order:

  • to the magistrate's court: if your claim is less than EUR 10,000;
  • to the President of the district court: if your claim is higher than EUR 10,000.

If your application is complete and well-founded, the judge will issue a European payment order. Your debtor then has 30 days to file an objection to the order. In this case, the competent court will rule on the case. If no objection is filed or if the judgement is in your favour, you can contact a bailiff to recover your debt.

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