Debt Collection in The Netherlands

The law firm Lassche Advocaten offers professional debt collection for any size commercial debts in The Netherlands.

We have comprehensive facilities to deal with all aspects of our clients' debt recovery requirements, whatever the size of their business.

Our team has a high success-rate for collecting debts. The team has over 20 years experience of dealing with debts using various collection tools. We are able to offer a fast and efficient collection service.

Our clients have the reassurance that recovery of all debts is personally supervised by a specialised solicitor. As a result, all debts are processed in the most efficient and appropriate manner.

If the debt is disputed, we have (unlike ordinary debt collection agencies) full facilities to pursue contested proceedings on our clients' behalf and to progress the matter to the earliest possible conclusion.

Debt collection procedure

Our debt collection service is suited to claims which are not disputed based on payments which have been invoiced for or are otherwise overdue.

Before starting the collection procedure, we will check the information supplied. Normally, we only require the identity of the debtor and details of the debt (for example, copy invoices) in order to initiate recovery.

Assuming that the information is sufficient to enable us to proceed, the debtor is contacted directly via formal letters and telephone calls and all efforts are made to settle the debt amicably without having to instigate legal action.

Unless details are provided of a contractual rate of interest, statutory interest and our fee (15% of the debt plus VAT) is added to the amount claimed from the debtor.

Most of the assignments are completed at this stage.

Occasionally, the debtor asks for payment to be made by installments. If the proposal is accepted, we will arrange a payment scheme and monitor the fulfillment of this scheme.

If payment is not made within the time limit specified and the debtor refuses to respond to our attempts to negotiate the recovery, we shall report to you accordingly, advise you if legal action in our opinion is warranted, and if so what costs would be involved.

This ensures that you retain at all times control of the costs associated with such legal actions.

Debt collection fees

Our debt collection service is generally based on a no-cure, no-pay commission basis on monies collected whether paid direct or through our office, once the file is placed with us.

Our fee is 15% of the collected amount plus VAT (called 'BTW' in Dutch). There may be additional costs for business extracts or other information to check the debtors? address

.

If it is necessary to institute court proceedings, our standard charging rates apply and there is also a court fee payable. The court fee varies according to the value of the claim. Our rates are based on the time spent dealing with the matter and the value of the claim.

We may require advance payment of the fee before instituting proceedings. However, we will give you the option of deciding whether to proceed before these charges are applied.

Litigation

If it is necessary to institute court proceedings, it is good to know that in The Netherlands we have a broad range of possibilities for creditors to collect their debts.

  1. .Obtain a title to enforcement, either through ordinary proceedings, summary proceedings or an exequatur.
  2. .Effect a conservatory arrest (before judgement).
  3. .Filing a petition for bankruptcy.
  4. . Methods of enforcement.

1. Obtain a title to enforcement, either through ordinary proceedings, summary proceedings or an exequatur.

Ordinary proceedings

A party wishing to commence civil proceedings will in first instance start at the District Court (Rechtbank). These proceedings can take up to one year to conclude.

Summary proceedings

When the debtor has no reasonable grounds not to pay the debt, summary proceedings might be considered. The proceedings take place at a date and time determined by the President of the District Court after hearing the plaintiff. The defendant is summoned to attend the proceedings. On the day the proceedings take place the plaintiff explains his case and his opponent pleads the defence. The President hears all parties, takes notice of the evidence presented and pronounces judgement within 1 or 2 weeks.

The party loosing his case in summary proceedings has a duty to observe the summary judgement.

From this judgement an appeal may be taken to the Appeal Court. Furthermore, the party who lost the summary proceedings may take the issue that was litigated to the ordinary District Court.

Exequatur

Foreign judgements do not provide a title to enforcement. An exequatur must be obtained from the District Court in accordance with the provisions of international agreements and those contained in possible statutes pursuant to a treaty, before any executory measure can be taken on a foreign judgement. An exequatur must be refused by the Court trusted with granting it, if they hold the proceedings, as they were conducted abroad, to be contrary to Dutch notions of fair trial.

2. Effect a conservatory arrest

Conservatory arrest

A creditor, who is not entitled to execution as he lacks a title to enforcement, may nevertheless attach the assets of his debtor or garnish debtors? assets under a third party.

There are general principles that apply to all types of conservatory arrest. Leave of the President of the District Court is needed to authorise one to effect a conservatory arrest. This leave is obtained through a simple petition to be filed by a solicitor. The creditor must show that his claim is prima facie a valid one. Usually it is adequate when he states that he has a claim against his debtor which has accrued due.

He does not have to prove anything about the claim being due at that stage. A creditor does not normally have to provide security beforehand in respect of costs, damages and interest that might be caused by the arrest. However, if the creditor is a foreign entity, the President of the District Court may decide otherwise.

The debtor has the possibility of obtaining a Court order lifting the arrest in summary proceedings. That is why obtaining leave to arrest is relatively easy. The President will always order lifting of the arrest where the debtor provides suitable security, i.e. a guarantee by a (first class) bank. The President shall also lift the arrest when, having heard the parties, he finds the claim to be invalid or the arrest needless.

A creditor who wrongfully arrests is liable for damages and costs. The party whose assets were wrongfully arrested, however, has to make a reasonable effort to limit losses, for instance by demanding lifting of arrest in summary proceedings. Similarly he may have to accept security.

A conservatory arrest must be followed by proceedings. It is essential that within a term set by the President of the District Court (which normally is 14 days), a writ is issued and served with regard to the claim secured by the arrest. As these proceedings are ordinary proceedings, it may take longer than a year before final judgement. In the meantime the property which is subject to attachment may not be sold, neither by the creditor, nor the debtor.

3. Filing a petition for bankruptcy.

Bankruptcy

A petition in bankruptcy is often used in The Netherlands as a means to get unwilling debtors to pay their due. Insolvency can only be declared by a juridical decision of the District Court. Dutch law does not distinguish between bankruptcy proceedings taken against merchants or non­merchants. A petition in bankruptcy by which such a decision is asked may be filed by any creditor, regardless of whether he has obtained a title to enforcement or not.

The only prerequisite is that the debtor has reached the position of insolvency, whereas the creditor filing the petition must show summarily the validity of his claim. In addition, judicial practice requires that it's to be shown that there is more than one creditor still claiming payment, before the District Court will consider the petition.

4. Methods of enforcement.

Enforcement

Once judgement has been entered, we will advise concerning the best method of enforcement according to the circumstances of the debtor. Options include securing the debt by a charge against property, arranging for payments to be deducted directly from the debtor's salary and securing payment directly from the debtor's bank account.

Further information?

It is not possible to address in detail Dutch law. For further information, please contact our law firm.