Debt recovery

Debt collection is the process by which a creditor attempts to obtain payment from a debtor. Payment can be obtained either amicably, after formal notice has been served, or following legal proceedings and, possibly, the implementation of an enforcement measure.

To secure a debt whose recovery appears to be in jeopardy, precautionary measures can be put in place. These measures make the debtor's assets unavailable or allow a special security right to be registered. The aim of such measures is to protect the creditor's interests and prevent any risk of insolvency on the part of the debtor.

Conflict of laws rules

In principle, a contract is governed by the law chosen by the parties. In the absence of a choice, the applicable law must be determined in accordance with the rules of private international law, taking into account the specific rules applicable to consumer contracts.

Formal notice

Contrary to popular belief, a creditor wishing to recover a debt from a debtor is not always obliged to send a formal notice. However, if a formal notice is required, it must comply with a specific form and content.

Late payment interest and collection indemnities

The payment periods, late payment interest rates and recovery indemnities applicable depend on the type of addressee of the transaction and are governed by the law of 18 April 2004 relating to payment periods and late payment interest.

All debtors must pay their invoices within the time limits stipulated in the contract, if not within the legal time limits. If they fail to do so, the creditor may claim late payment interest and compensation for collection costs.

Rules governing territorial jurisdiction

While the court of the defendant's domicile has jurisdiction in principle, attention must be paid to alternative or special jurisdictions.

The rules of material competence

In civil and commercial matters, either the Justice de Paix or the District Court has jurisdiction.

The debt collection procedure for debts of less than 15,000 euros in Luxembourg

Before the Justice de Paix, conditional payment orders and summonses (“citation”) are used to recover debts of up to €15,000.

Both the conditional payment order and the summons must comply with certain formalities.

Debt collection procedures for debts over €15,000 in Luxembourg

Proceedings involving claims in excess of €15,000 fall within the jurisdiction of the District Court, which is seised by writ of summons (“assignation”).

When the District Court deals with commercial disputes, the involvement of a lawyer is not compulsory, but is strongly recommended to ensure effective representation. On the other hand, if the debtor is not a trader, the summons must be served before the District Court in civil matters, and in this case the assistance of a lawyer is compulsory.

It should not be forgotten that it is possible to take action by way of summary proceedings when, in particular, the claim is not seriously disputable. However, if the obligation is disputed or likely to be disputed, it is preferable to take action by way of a writ of summons on the merits.

Cross-border debt collection

There are three instruments that are complementary and optional to national procedures for recovering a claim against a private individual or a company located in another Member State of the European Union (with the exception of Denmark):

The European Enforcement Order is a certificate that accompanies a judgment, court settlement or authentic instrument and enables a claim to be enforced in another Member State, with the exception of Denmark, without having to go through time-consuming and costly formalities.
The European order for payment is a simplified procedure that enables creditors to recover uncontested claims in civil and commercial matters by means of a non-contradictory procedure against a debtor domiciled in another Member State, with the exception of Denmark.
The European Small Claims Procedure is an adversarial procedure common to the Member States of the European Union, with the exception of Denmark, covering claims up to a maximum of €5,000.

Decisions taken under this procedure are recognised and enforceable in the other Member States, and cannot be challenged (except in the case of inconsistency with an existing decision between the parties in the other country concerned).

Whether it's a trade debt, unpaid invoices, rent arrears, salary arrears or any other type of debt, our team will handle your case with professionalism and tenacity.

Debt recovery

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