Recovering debts abroad
Last update
There are a range of debt-recovery options available to creditors whose debtors are resident abroad.
As regards:
- disputes pertaining to less than EUR 5,000, in civil and commercial matters: the European small-claims procedure may be tried;
- cross-border disputes: the European order for payment procedure may be tried.
Who is concerned
Any creditor:
- who is a natural or legal person;
- whether domiciled in Luxembourg or abroad;
- who holds a proven debt against a debtor (be they a natural or legal person) domiciled in Luxembourg or abroad;
- whose debt is unpaid;
may launch a debt-recovery procedure against the debtor through the Luxembourg courts, if those courts have competent jurisdiction.
The competent court to rule on the European small-claims procedure or the European order for payment procedure may be the courts:
- of the country where the debtor is domiciled; or
- of the country where the consumer is domiciled; or
- of the country where the insurance policyholder, the insured party or the beneficiary is domiciled; or
- of the place in which the agreement giving rise to the dispute was executed; or
- of the place in which the event causing damage occurred; or
- of the place in which the real-estate property to which the dispute pertains is located; or
- of a jurisdiction mutually agreed upon by the parties.
Additionally, as relates to the European order for payment procedure, the competent court may be that of:
- in the event of a dispute relating to the activities of a particular branch, agency or any other establishment, the location of the establishment in question; or
- the country in which the trust is domiciled; or
- in the event of a dispute relating to compensation claimed for salvage of cargo or freight, the jurisdiction where the cargo or freight was, or could have been, recovered; or
- the place of work of the worker in question; or
- the location of the establishment which hired the worker; or
- the place where the maintenance creditor resides; or
- a different jurisdiction, provided the reasons for the choice are set forth.
Prerequisites
Preliminary steps
Formal demand
Before launching legal proceedings as a last resort, the creditor may issue a formal demand to the debtor if, despite repeated requests and reminders (visits, telephone calls, letters, etc.), the debtor still refuses to pay the debt.
The formal demand is a written letter, addressed directly to the debtor, in which the creditor:
- informs them of the exact amount of the debt;
- gives them a formal order to make payment;
- imposes a final deadline by which payment must be made;
- informs them that, should payment not be forthcoming, they will suffer legal consequences;
- if applicable, informs them that conventional late-payment interest will begin to be charged, either from the date of the formal demand or from the stated final deadline.
The formal demand may be delivered by:
- a bailiff's summons; or
- a registered letter with acknowledgement of receipt.
In the event of a debt guaranteed by a surety, the formal demand must also be issued to the guarantor (be they a natural or legal person).
If the formal demand produces no effect, and the debtor continues to refuse to pay the debt, then the creditor may undertake legal proceedings to recover what is owed.
How to proceed
Cross-border small claims (up to EUR 5,000)
Any creditor wishing to recover a debt of less than EUR 5,000 (excluding fees and interest at the time of the application) from a debtor domiciled in another EU Member State (apart from Denmark) must file a small-claims settlement application using Form A (see 'Online services and forms'), duly filled in and filed with the competent court.
This procedure does not apply to matters relating to:
- tax, customs or administrative procedures;
- State liability;
- the status and capacity of natural persons;
- matrimony or property-related arrangements whose effects are similar to those of a marriage;
- alimony, wills and testaments, and inheritances;
- bankruptcies, legal settlements and similar procedures;
- social security;
- arbitration;
- labour law;
- the lease of buildings (except procedures concerning monetary claims);
- the invasion of privacy and violations of the rights inherent to the human being, including libel.
Where the Luxembourg courts have competent jurisdiction, the recovery application must be:
- addressed to the magistrate (juge de paix) having territorial jurisdiction;
- accompanied by any and all relevant supporting documents (credit agreement, reminders, formal demand, etc.).
If the application is incomplete or contains inaccurate information, the court will ask the creditor to provide further information or correct it.
Other cross-border disputes (over EUR 5,000)
Any creditor wishing to recover a debt of over EUR 5,000 (excluding fees and interest at the time of the application) from a debtor domiciled in another EU Member State (apart from Denmark) must file a European order for payment application with the competent court, using the 'Application for a European order for payment' form (Form A - see 'Online services and forms').
This procedure does not apply to matters relating to:
- tax, customs or administrative procedures;
- State liability for acts or omissions in the exercise of public authority;
- matrimonial arrangements, wills and testaments and inheritances;
- bankruptcies, legal settlements and similar procedures;
- social security;
- debts arising from non-contractual obligations, unless:
- those obligations were formally agreed to by the parties, or the debt has been formally acknowledged; or
- they pertain to liquid debts stemming from joint ownership of an asset.
Where the Luxembourg courts have competent jurisdiction, the recovery application must be:
- addressed to:
- the competent magistrate for the territory, if the amount in dispute is less than EUR 15,000 (excluding fees and interest);
- the president of the competent District Court, if the amount in dispute is more than EUR 15,000;
- the president of the Labour Tribunal, or the judge fulfilling that role, irrespective of the amount in question, for disputes relating to:
- employment contracts, apprenticeship contracts and supplementary pension schemes set up between employers and their employees, including those established after the end of the person's employment;
- insolvency insurance, as provided for by the law of 8 June 1999 on supplementary pension schemes set up between an insurer or a life assurance company and the employees, former employees and beneficiaries;
- accompanied by any and all relevant supporting documents.
If the application is incomplete or contains inaccurate information, the court will ask the creditor to provide further information or correct it.
- if any of the information is omitted, the application may be supplemented or rectified using the 'Request to the claimant to complete and/or rectify an application for a European order for payment' form (Form B) (see 'Online services and forms');
- if any of the conditions are not met, the application may be modified using the 'Proposal to the claimant to modify an application for a European order for payment' form (Form C) (see 'Online services and forms'). In this case, the creditor may accept or refuse the proposal and submit their decision by returning Form C by the deadline set by the competent court.
If the claim is found to be baseless or inadmissible, the court will inform the creditor of the reasons for the denial using the 'Decision to reject the application for a European order for payment' form' (Form D - see 'Online services and forms').
Time limits for responses
Cross-border small claims (up to EUR 5,000)
If the claim is complete, the court will forward the following documents to the debtor within 14 days:
- a copy of the claim; and
- where applicable, a copy of the supporting documents; and
- an answer form;
The debtor has 30 days from the date of notification of the form to state their position.
Within 14 days of receipt of the debtor's response, the competent court will forward a copy of the response to the creditor.
If the debtor has lodged a counterclaim, the creditor, in turn, has 30 days to respond to the counterclaim.
A decision must be made by the court within 30 days of receiving the parties' timely responses. That period may be extended if:
- the court requests further evidence or information;
- the court summons the parties to a hearing.
In the event that the time limit is extended, the court must then hand down its decision within 30 days of receiving the additional information, or of the hearing.
Other cross-border disputes (over EUR 5,000)
If the conditions for the submission of the order for payment are met, the court will issue the European order for payment promptly (generally within 30 days of the date the claim was submitted). The order is issued purely on the basis of the information provided by the creditor, which is not verified by the court.
The debtor then has 30 days to oppose the order, using the 'Opposition to a European order for payment' form (Form F) (see 'Online services and forms'), filed with the court which issued the order for payment. In the event of opposition by the debtor, the procedure will be continued by the courts with competent jurisdiction in the Member State where the order was issued according to national civil law proceedings, unless the creditor decides to abandon the procedure.
Enforcement of the decision
Cross-border small claims (up to EUR 5,000)
The decision:
- is recognised and enforced in the State where the debtor resides;
- may be re-examined on its merits in the Member State where the decision was issued, in the following exceptional circumstances:
- the claim form was not served on or notified to the debtor, or, where a hearing has taken place, the debtor was not given sufficient notice to appear to allow them to prepare a defence;
- the debtor was unable to contest the claim for reasons of force majeure or as a result of exceptional circumstances, due to no fault of their own.
Upon the creditor's request, the court may issue a certificate attesting to its decision. In order to have the decision enforced, the creditor must submit the certificate, along with an authenticated copy of the decision itself, to the court or competent authority to implement decisions made in the context of the European small-claims settlement procedure.
The European Consumer Centre Luxembourg can be contacted in case of questions about the European small-claims procedure.
Other cross-border disputes (over EUR 5,000)
If no objection is filed, the order for payment will become enforceable in the Member State where the debtor resides, without the need for an enforcement order. It is recognised legally and enforced under the procedural law of the executing Member State.
The creditor can then submit the matter to the competent authority in the executing Member State (in Luxembourg, the Huissier de Justice, Officer of the Court), presenting an authenticated copy of the decision (translated, if necessary, into the official language, or one of the official languages, of the executing Member State by an authorised translator), to have it enforced.
Online services and forms
Online services
Who to contact
Europäisches Mahngericht Deutschland (district and dunning courts in Germany)
-
Europäisches Mahngericht Deutschland
- Address:
-
Berlin
Germany
13343 Berlin
European Consumer Centre
-
European Consumer Centre
- Address:
- 271, route d'Arlon L-1150 Luxembourg Luxembourg
- Phone:
- (+352) 26 84 64 1
- Fax:
- (+352) 26 84 57 61
- Email address:
- info@cecluxembourg.lu
Open Closes at 16.00
- Thursday:
- 9.00 to 16.00
- Friday:
- 9.00 to 16.00
- Saturday:
- Closed
- Sunday:
- Closed
- Monday:
- 9.00 to 16.00
- Tuesday:
- 9.00 to 16.00
- Wednesday:
- 9.00 to 13.00
Related procedures and links
Procedures
Links
Further information
-
General information on small claims
on the European e-Justice Portal
-
Annuaire des juridictions
sur le site du ministère de la Justice de la République Française
-
Recouvrement de créances
sur le site de la Chambre des Métiers
-
Injonction de payer - Recouvrement de créances
sur le Portail Service-Public.fr
Legal references
-
Règlement (CE) n° 861/2007 du Parlement européen et du Conseil du 11 juillet 2007
instituant une procédure européenne de règlement des petits litiges
-
Loi modifiée du 8 juin 1999
relative aux régimes complémentaires de pension
- Nouveau Code de Procédure Civile
