It is a fact that companies in Netherlands are known for paying their invoices much faster than most other European countries. However not many know that about a third of invoices is paid late or remains unpaid.
Companies function on its turnover, and can go into a loss if they have too many unpaid invoices. If you do not know your Dutch business partner’s trade customs, debt collection can be rather complicated to handle if you have a non-paying customer in the Netherlands.
You need the help of a professional law firm with professional and experienced debt collection solicitors to help you collect all your unpaid invoices. We are a law firm which has successfully recovered debts in the Netherlands for quite a few years. We put in all our efforts in the debt collection process once you hand over your case to us.
Our debt recovery lawyers speak your language and Dutch, and are vastly learned about Dutch legislation and regulations. They also know Netherlands commercial traditions and culture which helps at getting your Dutch debtors pay quickly.
We offer customized debt recovery approaches as we know each debt recovery case is unique. We also put your interests first and provide honest advice about the chances of success in your debt recovery endeavours.
We take great care in handling our cases by making sure we use the right timing and tone. We have the expertise to handle any sized commercial debts in Netherlands and can collect outstanding debts for our international clients.
If required, our debt consolidation solicitors will also take your debtors to court in their own jurisdiction to ensure maximum returns at minimal costs to you. In fact, using our services is perhaps one of the most efficient and cost-effective means of recovering any bad debt you may have!
How to handle non-paying customers
There are a few things you can try out to try and get your invoices paid before contacting us:
- Call your Dutch customer to find out why they haven’t made any payments yet.
- Send them a written reminder if there’s no response to your phone calls
- Make sure you clearly mention the period of payment in the reminder
- If you communicate digitally with your customer, you can always send a demand letter by email
- Do mention that you will be forced to hand over their case to a debt collection solicitor for collection, if they do not pay on time. Clearly mention that all related debt recovery costs will be included in the claim
Once you hand over your case to us, our collectors first check the information provided and initiate a recovery with the help of the debtor’s identity and debt details. If we find there is sufficient information to start the proceedings, we next contact the debtor through formal letters and phone calls. We try our best to settle the debt without instigating unnecessary legal action.
Our debt collection solicitors usually complete most cases at this stage while adding fees and statutory interest to the amount claimed from the debtor. Some debtors may ask for instalments to make payments. If the arrangement is accepted, we make the payment scheme arrangements and ensure the scheme is fulfilled.
In case the debtor doesn’t pay within the specified time limit, and doesn’t respond to our recovery negotiations, our lawyers shall contact you and advice about legal proceedings. We then inform you about the involved costs if legal action is warranted and keep you informed about all related costs.
There are various methods for creditors to collect their due debts in the Netherlands if court proceedings are initiated. It can be done by:
- Getting an enforcement title by ordinary or summary proceedings, or through an exequatur
- a) Ordinary proceedings- If you opt to start civil proceedings, it starts at the District Court and takes about a year for the proceedings to conclude.
- b) Summary proceedings- This option is usually resorted to if there are no reasonable reasons for the debtor to not pay the debt. The President of the District Court determines the date and time of the proceedings upon hearing the plaintiff. A bailiff summons the defendant to attend the proceedings.
The President listens to both the plaintiff and opponent on the day of the proceedings, examines the presented evidence and passes judgement in a week or two. The losing party has to observe the summary judgement. If necessary, an appeal may be taken to the Appeal Court after the judgement while the losing party may take the litigated issue to the ordinary District Court.
- c) Exequatur-As the Netherlands doesn’t provide any titles for enforcing foreign judgements, an exequatur from the Dutch District Court is needed for its enforcement. It should follow the provisions of international agreements before any decision can be made on a foreign judgement. For the exequatur to contradict Dutch notions of fair trial, it has to be refused by the Court entrusted with granting it, if they were responsible for conducting the proceedings abroad.
- Conservatory arrest
Creditors who cannot execute as they lack a title to enforcement may attach his debtor’s assets or assign a third party to attach the assets. These arrests have to follow proceedings and may sometimes take longer than a year to reach final judgement. The attached property in the meantime cannot be sold to the creditor or debtor. However creditors who wrongfully make arrests are liable for damages and costs.
iii. Filing for bankruptcy
Debt collection solicitors in the Netherlands usually resort to a bankruptcy petition to get unwilling debtors to pay their dues. However the District Court has to declare a juridical decision to declare insolvency. While the debtor has to reach the position of insolvency, the creditor filing the petition should prove the validity of his claim and prove that more than one creditor are claiming payments for the District Court to consider the petition.
- Enforcement methods
Our debt collection solicitors will suggest the best method of enforcement to adopt based on the debtor’s circumstances once the judgement is entered. Possible options are to secure the debt by charging against property, arrange to directly deduct payments from the debtor’s salary or secure direct payments from the debtor’s bank account.