What is the process for a court collection procedure?

If the creditor's out-of-court requests for payment do not lead to any results, the creditor can choose to have his/her overdue claim enforced in court. In this case, the creditor can choose between options - legal action and court collection proceedings. As a result, both types of proceedings lead to an execution deed entitling the creditor to initiate foreclosure. The processes for the court dunning procedure and legal action, however, are materially different. Legal action is the right decision if the creditor has to expect resistance or delaying tactics on the part of the debtor. In this case (and based on the amount involved), both parties can try to settle the potential claim before a local or regional court. The outcome of this form of legal action is a legally binding, provisionally enforceable ruling. On the other hand, compared to a lawsuit, court collection proceedings are faster and more cost-effective making them the right choice if the debtor does not willfully delay the proceedings. The court collection proceedings are characterised by the fact that the parties cannot dispute the fact that the claims was rightly asserted by the debtor (simplified examination of whether the conclusions are warranted, based on facts). The court default summons concludes the court collection proceedings.

Process for court collection proceedings - conventional and automated proceedings

If we look at the process for court collection proceedings, we can differentiate between the conventional and automated proceedings. If the creditor chooses court collection proceedings based on the traditional procedure, he/she can buy an application form at office supplies stores. The creditor then submits the filled-in form to the local court at his/her residence to initiate the court collection proceedings. In the case of the automated court collection procedure, the creditor submits an electronic application to the central dunning court having competence for his/her federal state. In addition, the creditor also has the option of commissioning a lawyer to file a motion for the issue of a default summons to the competent dunning court.

Court collection proceedings - Reviewing the motion and issue of the default summons

In the further course of the court collection proceedings, the dunning court reviews the motion submitted for formal correctness. However, the accuracy of the content of the claim is not checked in the process of the court collection proceedings (simplified examination of whether the conclusions are warranted based on fact). If the formal requirements are fulfilled, the dunning court issues a default summons which is directly served to the defaulting debtor in the further course of the proceedings. This summons includes the request to pay the outstanding account, plus interest and further listed costs, within a period of two weeks.

The further course of the collection proceedings after the service of the default summons

The debtor then has various options as to whether and how to respond to the default summons. The debtor can comply with the request and settle the outstanding account, plus costs of proceedings, within a period of two weeks as of receipt of the default summons. In addition, the debtor also has the option to object to the default summons within a period of two weeks. In order to enforce his/her claim, the  creditor will then file a motion for the execution of adversary proceedings. Alternatively, if the debtor does not respond to the default summons and does not object to it, an enforcement order can be requested.