Have you received a collection letter?

After you have received a collection letter, it is important that you check it in detail regarding its content and sender. A collection letter first of all informs you of the fact that there is an outstanding accunt regarding you. The owner of the outstanding account is named and the due date of the invoice the customer has failed to pay is specified. Various costs, including the amount of the principal and accessory claims, e.g. dunning costs, are listed. In accordance with section 11a RDG [German Legal Services Act], collection companies have information and explanation duties towards individuals for the first assertion of a claim.

You have received a collection letter – now is the time to react!

First, you should check the correctness of the claim to which the reminder refers. Check your documents and find out whether the claim referred to actually exists and whether you have perhaps already paid it. You can also retrieve the claim and see further information online. If you have received a collection letter, you should also find out more information about the collection agency. The internet can help you in this; moreover, consumer advice centres can also provide information. In addition, you should also examine whether the collection agency even has the right to issue a reminder regarding the claim referred to. Not everyone is allowed to engage in collection services as these services require a registration with the competent registration authority - depending on the registered seat of the collection company. The debtor should only pay after all of these facts have been established and it has been confirmed that there actually is an outstanding overdue claim.

Received a collection letter - what happens if you do nothing?

If you have received a collection letter and failed to respond to it, you will either receive a second letter with an agreement regarding payment by instalment or the collection company will contact you via phone shortly. Debt collection via phone is another option for the collection service provider to settle the matter out of court. If the debtor again fails to respond, he/she has to expect that court collection proceedings will be initiated. Since court collection proceedings require an application, the creditor must submit an application for a default summons to be issued. If you have received a collection procedure letter, you should react during the initial phase. This because, at the latest, as of the time of service of a default summons, you will incur substantial costs since the legal costs will be added to the princial and accessory claims. Even after the service of the default summons, the debtor has the possibility to pay or to object to it within a period of two weeks as of the service of the default summons.