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a.merkel
a.merkel, Rechtsanwältin; LL.M. Eur.
Category: German Law
Satisfied Customers: 1535
Experience:  1.+ 2. Staatsexamen; LL.M.(Master of Law)
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What are the debt collection laws and practices in Germany?

Resolved Question:

What are the debt collection laws and practices in Germany? What are the steps involved and approximately how long does each step take?
Submitted: 11 months ago.
Category: German Law
Expert:  a.merkel replied 11 months ago.

a.merkel :

Dear customer,

a.merkel :

Thank ypu for using justanswer.

a.merkel :

1. extrajudicial efforts by reminders, etc. to get mney from the debtor. is this not successful:

a.merkel :

2. judicial procedure (gerichtliches Mahnverfahren) § 688 ZPO.

a.merkel :

http://dejure.org/gesetze/ZPO/688.html

a.merkel :

This is an automated procedure, which is cheaper and faster than a payment claim.

a.merkel :

There is also no evidence procedure.

a.merkel :

how much time the Court needs, depends on the volume of work and can not determine.

a.merkel :

The debtor may oppose.

a.merkel :

Then, you must submit a payment claim.

a.merkel :

If you be successful with the "gerichtliches Mahnverfahren", you may request a writ of execution (Vollstreckungsbescheid). With the enforcement answer a bailiff can be instructed to the enforcement.

a.merkel :

3. It is clear that the debtor is contrary to the claim, so a payment claim should rise immediately. As a result of the judgment a bailiff can collect the debt.

Customer:

Guten Tag. I'm not sure if you are online now (chat), or if this is more of a forum style posting.

a.merkel :

I cannot give you an answer, how long this steps take, because, it depends on volume of work, if you have full documentation, etc.

a.merkel :

Yes, I'm online...

Customer:

Very good. However, before we continue, can I have your assurance that everything discussed is covered by attorney client privilege?

Customer:

I am not asking for legal advice.

a.merkel :

What does you mean with attorney client privilege? Data protection?

Customer:

That what is discussed here cannot be discussed with anyone else, including officials. There is no criminal activity involved, I simply wish to protect the debtor in this situation

a.merkel :

ok. Please contact the portal operator, that this chat will not published. I have no power to do this, I only give legal advice.

Customer:

OK. We can avoid discussing any specifics. So there are actually two parts to this question. I am not asking for the creditor (the person to whom the money is owed) but for the debtor (the person who owes the money).

Customer:

First part: What are the general procedures for collecting a debt in Germany.

a.merkel :

ok.

Customer:

Second part: This is an international debt. The creditor is a company out of the USA. The debtor lives in germany

Customer:

Let me give you a list of the specifics needed...

Customer:

please wait one moment

Customer:

- How can US loans be pursued overseas?
- What agencies are involved in the process?
- What are the steps and how long does each step generally take?
- When does EU law supersede German law, and vice versa?
- Does the EU/Germany allow for garnishment of wages, and if so what is the maximum allowable amount?
- Are debts where only one married person is a signatory considered community property (I.e. is the repayment obligated to both spouses? And is this obligation affected by whether the loan was indebted before or after marriage?)

a.merkel :

Please clarify. What action has already been made by the creditor?

Customer:

None. However the debt is in arrears and could be pursued as a bad debt.

Customer:

The borrower is in bankruptcy (in the US system) however, this debt can not be discharged by a bankruptcy.

Customer:

The borrower is interested in the legalities of being pursued in Germany so that he can negotiate with the company and begin repaying the debt.

a.merkel :

So, is the debt incurred in the United States?

Customer:

Correct

a.merkel :

Does an enforceable judgment exists?

Customer:

Not in Germany. I do not believe there is one in the US.

a.merkel :

Ok.

a.merkel :

The creditors will effect an American enforceable judgment.
Does the enforceable judgment exists, this can acknowledge by the German court.

Customer:

OK. And then what happens if it is acknowledged by the German court?

Customer:

- Can the enforceable judgement be appealed to the German court?

Customer:

- What actio nwill a German court take to enforce the judgement?

Customer:

- If there is an enforceable judgement in the US, this judgement can be forestalled by a chapter 13 bankruptcy under US law. Can thie German court then be stopped from pursuit as well?

a.merkel :

They can assign a bailiff enforcement.

Customer:

what is a bailiff enforcement?

a.merkel :

Can the enforceable judgement be appealed to the German court?

Customer:

Yes. Is that question understandable?

a.merkel :

The German courts can recognize only under certain conditions.

Customer:

what are those conditions?

a.merkel :

Check for example whether the debtor could defend themselves.

a.merkel :

please read and translate the § 328 ZPO. I cannot find an english translation of that.

a.merkel :

http://dejure.org/gesetze/ZPO/328.html

Customer:

Thank you. Any links you have are greatly helpful. I can have them translated..

a.merkel :

ok.

Customer:

Can you offer an opinion...the debtor did not receive any notifications of a court subpoena or need to appear, has not received any notification of a judgement in absentia, and lives in Germany not in the US. Would the courts see this as being able or unable to defend themselves?

a.merkel :

Unfortunately, no, because I don't know the American Law. It is subject to the obligations to the place of residence, the requirements for tracking and so on.

Customer:

So, if it's enforceable there, it is enforceable here? Is that correct?

a.merkel :

Nearly.

a.merkel :

Recognition of foreign judgments


(1) Recognition of a judgment handed down by a foreign court shall be ruled out if:


1. The courts of the state to which the foreign court belongs do not have jurisdiction according to German law;


2. The defendant, who has not entered an appearance in the proceedings and who takes recourse to this fact, has not duly been served the document by which the proceedings were initiated, or not in such time to allow him to defend himself;


3. The judgment is incompatible with a judgment delivered in Germany, or with an earlier judgment handed down abroad that is to be recognised, or if the proceedings on which such judgment is based are incompatible with proceedings that have become pending earlier in Germany;


4. The recognition of the judgment would lead to a result that is obviously incompatible with essential principles of German law, and in particular if the recognition is not compatible with fundamental rights;


5. Reciprocity has not been granted.


(2) The rule set out in number 5 does not contravene the judgment’s being recognised if the judgment concerns a non-pecuniary claim and if, according to the laws of Germany, no place of jurisdiction was established in Germany.

a.merkel :

found a translation...

Customer:

Im afraid I don't understand. When it says (for example) "...has not been duly served..." in para: 2, does this mean according to German law or according to US law?

Customer:

And in no. 4 "4. The recognition of the judgment would lead to a result that is obviously incompatible with essential principles of German law, and in particular if the recognition is not compatible with fundamental rights;"...this means that German law takes precedence if there is a large discrepancy between them. Correct?

a.merkel :

Frist this is only for non-pecuniary claims. But you asking for debts.

Customer:

yes

a.merkel :

so, (2) is not interesting. But it meansaccording to German law...

Customer:

OK.

a.merkel :

No.4: that means that they cannot regognite,if the foreign law is incompatible to the german law.

Customer:

OK.

Customer:

What is a bailiff enforcement?

a.merkel :

Bailiff...the man how can do the enforcement.

a.merkel :

who

a.merkel :

can do

Customer:

What can s/he do? Can wages be garnished (taken directly from a paycheck)? If yes, what is the largest percentage of the paycheck that can be taken?

Customer:

What other collection actions can a bailiff do?

a.merkel :

please read: § 850c ZPO

a.merkel :

http://dejure.org/gesetze/ZPO/850c.html

a.merkel :

930 Euro per Month

a.merkel :

may not be taken.

Customer:

I am not sure I understand. The court can take EVERYTHING EXCEPT 930Euro per month. Or can take ONLY 930Euro and can not take more than that amount?

a.merkel :

The court can take EVERYTHING EXCEPT 930Euro per month.

a.merkel :

from your wage.

Customer:

That looks like it may only be for spouses (divorce support)

a.merkel :

No, for singles.

Customer:

OK.

a.merkel :

The exemption applies to any kind of monetary claims.

a.merkel :

In addition, items can be seized and exploited.

Customer:

If the debtor is married, can the spouse's income also be garnished this way?

a.merkel :

not direkt from the Employer, but from the joint bankaccount.

Customer:

Is it required for the spouse's money to be taken? For example, if the debtor does not have a joint account with the spouse, does the spouse have to volunteer the money to the court?

a.merkel :

no. because the spouse is not the deptor.

Customer:

OK. So the courts can only take the money from the debtor...not from the spouse.
I would like to clarify...it is NOT against German law for the debtor's wife or husband to put their money in a separate account, and not have it be taken by the court for a debt. Is this right?

a.merkel :

yes.

Customer:

Is it possible to provide a link that confirms this?

a.merkel :

http://dejure.org/gesetze/ZPO/739.html

Customer:

Thank you :-) I apologize, but I want to be sure there is no confusion because we are speaking in english. I will ask the question again, differently.

The German court will NOT garnish or take the wages of the spouse of the person who owes the debt. Is this correct?

a.merkel :

yes, but you can check whether the debtor only exploited this.

a.merkel :

Section 739
Presumption of custody and control in the case of compulsory enforcement against spouses and partners in a civil union


(1) Insofar as it is presumed, to the benefit of the creditor of the spouse in a marriage pursuant to section 1362 of the Civil Code (Bürgerliches Gesetzbuch, BGB), that the debtor is the owner of movable objects, then solely the debtor shall be deemed to be, in the context of implementing the compulsory enforcement, the person having custody and control of those objects and their possessor, notwithstanding any rights of third parties.


(2) Subsection (1) shall apply mutatis mutandis to the presumption provided for by section 8 (1) of the Act on Civil Unions (Lebenspartnerschaftsgesetz, LPartG) to the benefit of the creditor of one of the partners in a civil union.

Customer:

"...but you can check whether the debtor only exploited this." I am not sure what this means. The debt was created by the debtor BEFORE the debtor was married. Is this what you mean?

a.merkel :

No, if the debtor give his money to the spouse, only for the reason, that he is not able to pay his dept.

Customer:

Ah...I understand. No, I am referring to money the spouse earns by themselves.

The court will NOT forcibly take any money PAID TO THE SPOUSE of a debtor. Correct?

a.merkel :

The court will not take any money the spouse earns by themselve.

Customer:

Thank you for clarifying this. We are almost done. I very much thank you for your patience. One more question...

Customer:

If the debtor works...
and the spouse works...
and the courts begin forcibly taking money from the debtor's wages...
but they DO NOT take money from the spouse's wages...
Will the court take everything EXCEPT 2000 euro (because the debtor is married) or will the court take everything except 980Euro because they are taking just the debtors wages?

a.merkel :

the court will take everything except 980Euro because they are taking just the debtors wages. Useally they take from the employer before he can give it to you.

Customer:

Very good. I understand. Of course, I will advise that the debtor seek the live advice of an attorney to handle these concerns. Can you tell me what type of attorney might handle this issue? In the US we would look for a consumer debt protection attorney. Or perhaps a banking attorney.

Can you recommend for what type of attorney the debtor should search to continue understanding this?

Customer:

I mean, what type of attorney should the debtor hire for assistance with this matter?

a.merkel :

Looking for a Laywer who has knowlegde also in the american law. if they do Insolvency proceedings, they need a Insolvency administrator.

Customer:

Insolvency is the German term for bankruptcy?

Customer:

Can you make recommendations for any specific attorneys or law firms in the Frankfurt region?

a.merkel :

Yes.

Customer:

Wonderful. Can you recocomend one who is also familliar in American law and speaks english?

a.merkel :

No, not personal, but you can get help from the Rechtsanwaltskammer at Frankfurt/Main.

a.merkel :

http://www.rechtsanwaltskammer-ffm.de/raka/nmain/index.html

Customer:

Wonderful. Thank you for all your time. Your service has been exccellent.

a.merkel :

Please give me a positive rating by using the Smileys.

Customer:

I will. Have a good evening. And thank you again.

a.merkel :

thank you!

a.merkel, Rechtsanwältin; LL.M. Eur.
Category: German Law
Satisfied Customers: 1535
Experience: 1.+ 2. Staatsexamen; LL.M.(Master of Law)
a.merkel and 2 other German Law Specialists are ready to help you

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