You may engage a debt collection agency as soon as your claim is due, undisputed, and your customer is in default. As a rule, the fees are borne by the debtor; since 2021 their amount has been capped by law. From an economic perspective, handing the matter over typically makes sense starting at around a claim amount of 200 euros—and when two of your own payment reminders have gone unanswered.
This article shows you the three prerequisites for debt collection, the cost logic following the 2021 debt collection reform, the handover process, and when a dunning notice (Mahnbescheid), a lawyer, or factoring are the better route.
Prerequisites for initiating debt collection
Before you can instruct debt collection, three conditions must be met: the claim is due, it is undisputed, and your customer is in default.
An invoice becomes due as soon as the agreed payment term has expired. If no payment term is stated, it becomes due upon receipt of the invoice.
In practice, default is what most often causes problems. Under Section 286 (3) BGB, your customer automatically falls into payment default at the latest 30 days after the due date and receipt of the invoice. For consumers, this automatic rule applies only if you expressly pointed out this consequence on the invoice. If the notice is missing, you need a payment reminder. There is no statutory requirement for three reminders—this is a persistent misconception.
If default has not occurred, you will be stuck with the collection costs. These costs count as damages for default. If you hand the case over too early, you cannot pass them on to the debtor.
“Undisputed” means: your customer has not objected to the claim, has not asserted defects, and has not set off claims. As soon as they dispute the claim with substantive grounds, the debt collection process loses its advantage. Then it becomes a legal issue rather than an unwillingness to pay.
Before handing the case over, also check whether your invoice contains all mandatory information under Section 14 UStG. A formally incorrect invoice gives the debtor an argument and delays the process.
When debt collection is worth it
Three factors answer the question of the right time: the amount of the claim, the age of the claim, and the debtor’s response.
A practical lower threshold is around 200 euros. This is not a legal rule, but a guideline. Below that, the situation becomes clear: for an amount in dispute up to 50 euros, Section 13 (2) RVG caps the fee at 30 euros. The effort for opening the case, determining the address, and following up stays the same, while the return decreases. For very small amounts, writing it off is often the more honest decision.
For the age of the claim, a hard deadline matters. The regular limitation period is three years (Section 195 BGB) and, under Section 199 BGB, begins only at the end of the year in which the claim arose. An invoice from March 2024 therefore becomes time-barred on December 31, 2027. This creates a real cut-off date in the fourth quarter for all older receivables. A dunning notice (Mahnbescheid) suspends the limitation period; another reminder of your own does not.
Anyone who does not respond to two reminders usually will not respond to a third either. At the latest then, you have reached the point at which you should have debt collection proceedings initiated. However, partial payments, follow-up questions, or a request to pay in installments suggest that you should keep handling the case yourself for a bit longer.
One point cost tables do not capture is the customer relationship. For a B2B repeat customer with an ongoing master agreement, a phone call is the cheaper first step. For a one-time buyer who has been silent for eight weeks, there is little reason for patience.
What does it cost to engage a debt collection agency?
As long as the debtor pays, you will not incur any costs with most providers. The collection fee is part of the damages for default and is therefore borne by the debtor. Since the 2021 debt collection reform, its amount has been limited.
The relevant basis is the business fee under No. 2300 VV RVG, calculated based on the amount in dispute of your claim.
| Case | Maximum fee rate |
| Debtor pays after the first letter | 0.5 |
| Undisputed claim, standard case | 0.9 |
| Particularly extensive or difficult case | 1.3 |
| Amount in dispute up to 50 euros | Fee capped at 30 euros |
In addition, default interest accrues. For consumers, it is five percentage points above the base interest rate (Section 288 (1) BGB); for payment claims without consumer involvement, nine percentage points (Section 288 (2) BGB). The base interest rate has been 1.52% since July 1, 2026. This results in 6.52% in consumer business and 10.52% in B2B. The Deutsche Bundesbank resets the rate on January 1 and July 1, so check it before each interest calculation.
If your debtor is not a consumer, you may demand a lump sum of 40 euros under Section 288 (5) BGB. This lump sum is credited against damages to the extent they consist of the costs of legal enforcement. The 40 euros therefore are not added on top.
Default interest and the lump sum must be included in the statement of claim that you hand over. Anything missing there can no longer be collected.
The residual risk remains with you: if the debtor is insolvent, your reimbursement claim does not help you. What you pay yourself in that case is set out in your contract with the debt collection service provider.
Handing a claim over to a debt collection service provider: how it works
If you want to engage a debt collection agency, the process is similar for all registered service providers. Out of court, it usually takes two to eight weeks.
- Gather the documents and do a final reconciliation of the outstanding balance.
- Place the order—online via the provider’s portal or using a form.
- Review and case setup by the service provider, including address verification and a credit check.
- Out-of-court recovery: payment request, follow-up, and, if needed, an installment agreement.
- Closeout through payment or transition into the judicial dunning procedure.
The handover should include the invoice with all mandatory details, evidence of the service provided such as the order, contract, or delivery note, proof that the invoice was sent, the complete dunning history with dates, the debtor’s contact details and legal form, and all incoming payments including partial payments. List any default interest charged separately from the principal amount.
The completeness of this data set affects the outcome more than the choice of provider. If proof of service is missing, follow-up work is required. If the payment status is incorrect, the service provider will pursue an amount that no longer exists in that form.
Initiate debt collection or a court dunning procedure: Pros and cons
Anyone who wants to initiate a debt collection process is rarely faced with an either/or decision. Both are two stages of the same path. Most debt collection service providers will also handle the court dunning procedure if requested.
| Criterion | Out-of-court debt collection | Court dunning procedure |
| Duration | two to eight weeks | eight to twelve weeks |
| Upfront costs | generally none | court fee, minimum amount EUR 38.00 |
| Result | payment or installment plan | enforceable title |
| Effect on limitation period | no suspension | suspension from service |
| Risk | debtor does not respond | objection leads to contested court proceedings |
You start the court dunning procedure via the central dunning court, including online. The court charges a 0.5 fee under KV 1100 GKG, but at least EUR 38.00 (as of 2026). After the dunning order (Mahnbescheid) is served, the debtor has two weeks to file an objection. If none is filed, you apply for the enforcement order (Vollstreckungsbescheid). This gives you a title you can enforce for 30 years.
If the debtor objects, the matter moves into contested court proceedings. That is exactly why the preliminary review is important: a court dunning procedure shows its strength with undisputed claims, not disputed ones.
Attorney for receivables management instead of a debt collection agency
An attorney for receivables management bills under the same statute as a debt collection service provider: the RVG. In the standard case, the fee rate differs hardly at all. The difference lies in the type of case.
A debt collection service provider is strong at volume: many similar, undisputed claims, a standardized process, a portal with case status, long-term monitoring of uncollectible cases.
A case belongs with an attorney as soon as legal issues are involved. This applies where the debtor disputes the claim with substantiation, alleges defects, or sets off with a counterclaim. It also applies to complex contractual situations, impending insolvency of the debtor, or questions regarding Sicherungsübereignung. Anyone who wants to sue immediately can use an attorney for receivables management to avoid the detour via a court dunning procedure.
A practical middle path: many debt collection service providers work with affiliated law firms and pass the case on if an objection is filed. Clarify before signing the contract what this handover costs and who decides on it.
Factoring as an alternative to debt collection
Factoring and debt collection take effect at different times. Factoring applies before due date; debt collection after default.
| Criterion | Factoring | Debt collection |
| Timing | directly after invoicing | after default has occurred |
| Purpose | liquidity available immediately | collection of an outstanding receivable |
| Costs | ongoing fee as a percentage of revenue plus interest | case-by-case fee, usually paid by the debtor |
| Default risk | with true factoring, borne by the factor | remains with you |
| Suitable for | recurring invoice volume, long payment terms | a single overdue receivable |
With true factoring, the factor assumes the default risk (Delkredere); with non-recourse factoring it remains with you. In both cases, the fee is incurred on an ongoing basis, including for all customers who pay on time. For a single old receivable, factoring is therefore the wrong lever. For a business with predictable invoice volume and payment terms of 60 or 90 days, however, it can noticeably relieve the dunning process.
Debt collection for B2B claims abroad
For B2B claims abroad, your contract is the first deciding factor, not the service provider. Clarify three points in advance: which place of jurisdiction is agreed, which law applies, and how long the limitation period is in the debtor’s country. After that, you have three options.
The first is a debt collection service provider with its own network in the destination country. This is worthwhile when language, payment habits, and local enforcement practice matter.
The second is the European Order for Payment under Regulation (EC) No. 1896/2006. You apply using Form A; it applies in all EU states except Denmark; and the debtor has 30 days to file a statement of opposition. For undisputed claims, this route is often faster than cross-border debt collection and leads directly to a title enforceable throughout the EU.
The third is the European Small Claims Procedure under Regulation (EC) No. 861/2007, applicable up to EUR 5,000. It is conducted in writing and without a requirement to be represented by an attorney.
For claims outside the EU, the only remaining route is via a local partner or a court in the debtor’s country.
Hire a reputable debt collection partner online
You can check whether a provider operates reputably yourself in just a few minutes.
Authorization is mandatory. Under Section 10 RDG, debt collection may be carried out only by those entered in the Legal Services Register (Rechtsdienstleistungsregister). The register is public and can be searched free of charge. Membership in the BDIU or BFIF is an additional signal, but it does not replace checking the register.
These points should be clarified before engaging them:
- Written cost breakdown, including the scenario where the debtor is insolvent
- Clear rules on whether the claim is only collected or purchased
- Viewable case status, ideally via a portal
- Interface to your invoicing software so that receivables data does not have to be entered twice
- A transparent approach toward the debtor, without threatening language
Caution is advised with upfront payment just for opening the case, with success promises stated as percentages without a data basis, and with a missing register entry.
Comparing debt collection providers: what you should pay attention to
The usual comparison of debt collection providers based on fees is misleading. The fee charged to the debtor is capped by law and therefore similar for all registered providers. What should be compared is what happens when nothing is collected.
| Review question | Why it matters |
| What do you pay if the claim is uncollectible? | This is where your real costs arise |
| How high is the commission on the collected amount? | A participation is common; the range is large |
| Who advances the court costs? | The obligation to pay an advance ties up liquidity |
| What does obtaining an enforceable title cost? | The transition into the judicial dunning procedure is rarely free of charge |
| How long does the framework agreement run? | Check minimum terms and notice periods |
| What does long-term monitoring cost? | Enforceable titles are valid for 30 years; monitoring is often billed separately |
Reputable debt collection providers answer these questions proactively. Anyone who wants to commission debt collection should get the answers in writing and run the numbers using a realistic case—for example, a claim of EUR 1,500 that is collectible only halfway.
A clean dunning process as a preliminary step: what you prepare in easybill
The more complete your data is at the time of handover, the faster the case can be set up. That is exactly where easybill comes in.
In easybill, you create invoices, payment reminders and dunning notices as separate document types. The payment reconciliation pulls in the account transactions and keeps the outstanding receivables up to date so that partial payments are documented. The automated dunning process is available in the Premium plan; you can send dunning notices manually in any plan.
For the handover, there is the debt collection interface to Debtist. This means that the invoice, dunning history, and payment status are available directly as a coherent data record when you hand over a claim.
Frequently asked questions & answers about commissioning debt collection
Not necessarily. What matters is default, not the number of dunning notices. In business-to-business transactions, default occurs automatically under Section 286 (3) BGB 30 days after the due date and receipt of the invoice. For consumers, this applies only if the invoice contains the corresponding notice; otherwise you need a dunning notice. There is no statutory requirement to send three dunning notices. In practice, one or two reminders of your own make sense because many invoices simply get overlooked.
Legally, the debtor owes the costs as damages due to default. Economically, you bear them if the debtor is insolvent. How much this case costs you depends solely on the contract with your service provider. Some providers work purely on a success basis; others charge a base fee if the claim is uncollectible. Clarify this point in writing before commissioning.
Yes, the requirements are the same. You should be aware of two differences. First, default without a dunning notice occurs only if you explicitly pointed out the 30-day consequence on the invoice. Second, the lump sum of EUR 40 under Section 288 (5) BGB does not apply vis-à-vis consumers, and default interest is five instead of nine percentage points above the base interest rate.
Out of court, usually two to eight weeks. If the debtor does not respond, the judicial dunning procedure is added, which takes another roughly eight to twelve weeks. If the debtor objects to the order for payment, the contested proceedings follow and the matter drags on for over a year. The timeframe is significantly shortened if the documents are complete at the time of handover.
Then the advantage of debt collection ends. A debt collection service provider cannot enforce a disputed claim; only a court can. The case goes to a lawyer and from there into contested proceedings. At this point, take a sober look at whether the objection contains justified arguments, and weigh litigation costs and chances of success against the amount of the claim.
You can hand it over, yes—but you can hardly enforce it. After the limitation period expires, the debtor can refuse payment by invoking the statute of limitations. If they do so, the matter is over. The regular limitation period is three years and runs to year-end. Anyone with older receivables therefore reviews them in the fourth quarter and initiates judicial dunning proceedings in good time because the order for payment suspends the running of the limitation period.
This article is general information and does not replace legal or tax advice. If you have questions about your specific case, contact a lawyer or your tax advisor.
