How German Law Treats an Unpaid Invoice
German civil law is codified in the BGB, with procedure set by the ZPO. For a foreign creditor the practical benefit is predictability: steps, deadlines and cost bands are statutory rather than discretionary. Claims are heard at first instance by the Amtsgericht or the Landgericht depending on value, and commercial matters before the Landgericht may go to a Kammer für Handelssachen, where a professional judge sits with two lay judges drawn from business.
Representation by a German-admitted lawyer is mandatory before the Landgericht - one reason the choice of route matters. As an EU member state, Germany also gives creditors elsewhere in the Union access to the European Order for Payment and the European Enforcement Order, which matters when the debtor holds assets in more than one member state.
The Mahnverfahren: an Enforceable Title Without a Hearing
The Mahnverfahren is the most useful mechanism available on a clear German debt. You apply to a central Mahngericht; the court issues a Mahnbescheid to the debtor without examining the merits or requiring your contract and invoices at that stage.
The debtor then has two weeks to object. If none arrives, you apply for a Vollstreckungsbescheid - an enforceable title valid for thirty years. If the debtor does object, the file converts into ordinary contested proceedings with your claim already formally on record. The downside is a few weeks and a modest court fee; the upside is a title without a hearing, which is why the route is worth taking even where an objection is possible.
How Long Does a German Claim Take?
| Stage | Typical Duration | Cost |
|---|---|---|
| Pre-legal demand Formal demand, negotiation, payment plan | 2–6 weeks | Low |
| Mahnverfahren Mahnbescheid, then Vollstreckungsbescheid | 6–10 weeks | Low |
| Contested proceedings Amtsgericht or Landgericht, first instance | 8–18 months | High |
| Enforcement Bailiff, attachment, asset disclosure | 2–4 months | Medium |
Indicative. Actual timing depends on claim value, the court's list, whether the debtor objects, and the strength of the documentation.
The Three-Year Clock, and What You Can Add
The limitation period under section 195 BGB is three years - but section 199 is what catches foreign creditors out. Time runs not from the invoice date but from the end of the calendar year in which the claim arose and you knew of it. Claims from a given year therefore tend to expire together on 31 December three years later, which means a December invoice and the following January invoice can have limitation dates a full year apart. Commencing the Mahnverfahren interrupts the period.
On interest, Germany implements the EU Late Payment Directive through the BGB: statutory default interest in B2B transactions runs at the base rate plus nine percentage points, plus a flat sum in compensation for recovery costs. On an aged claim that is a material addition to the principal - and putting a correctly calculated figure in front of the debtor early tends to change the tone of the negotiation.
Turning a Title Into Money
A judgment is a title, not a payment. Movable assets and direct collection go through the Gerichtsvollzieher (court bailiff); receivables and bank accounts are attached by a Pfändungs- und Überweisungsbeschluss. Where assets are unknown, the debtor can be compelled to give a Vermögensauskunft - a sworn statement of assets. Refusal means entry on the Schuldnerverzeichnis, the public debtors' register, which credit agencies read and most operating companies cannot afford. That exposure frequently produces payment on its own.
How Does SXB Global Handle a German Case?
We open a German file by settling two questions: is the debt genuinely undisputed, and how close is the limitation year-end. Those answers set the route. Contact with the debtor is conducted in German - a demand that correctly states the statutory interest, the flat recovery compensation and the consequences of a Vollstreckungsbescheid reads very differently to a German finance department than a reminder in English.
Where legal proceedings become appropriate, SXB Global coordinates the instruction of appropriately authorised local counsel. Legal services are provided by the relevant independent legal professionals.