news and information
How does the law firm Feinen deal with Corona / COVID-19?
In the current situation, we too are aware of our social and professional responsibility towards our clients.
Of course you can still reach us by telephone or - better - by e-mail.
However, we have decided not to hold any more personal meetings in our offices in the coming weeks.
Our office is a modern and dynamic law firm with a flexible working environment.
Our team usually works from our office in Cologne. Here we manage the worldwide debt collection and customer service. Our international customer service has always been carried out via telephone and e-mail.
The recent development of the pandemic has not affected our customer service. We are accustomed to providing excellent customer service to all our customers worldwide via e-mail, telephone and WebFile system.
Our entire team is protected and now works mostly from the home office, which we have further expanded to the best and most secure technical standard.
A video conferencing system is in progress and will be available shortly.
In response to recent advice from the Robert Koch Institute, WHO, NHS and the government, the team has taken all recommended personal health precautions and works from home.
Fortunately, we are all used to flexible working and therefore you should not notice any change in our customer service.
German Legislation intervenes deeply in debt collection because of the COVID 19 pandemic
I. Mitigating the effects of the Corona pandemic
The German legislation sees that consumers are particularly affected by the corona pandemic in terms of their income opportunities and micro-enterprises like UG and salesmen in terms of securing the economic basis of their business. Other people may also experience temporary liquidity problems, at least temporarily.
The legislator wants to ensure that, through the (justified) assertion of claims by creditors, debtors who find themselves in distress through no fault of their own do not jeopardise their livelihood or the economic basis of their acquisition business.
Section 1 of the COVID-19 Insolvency Suspension Act (COVInsAG) suspends the obligation to file for insolvency pursuant to section 15a InsO and section 42 (2) BGB until 30.9.2020. According to § 4 of the Act, the deadline can be extended until 31.3.2021 by decree of the BMJV depending on further developments. If there was no insolvency as of 31 December 2019, it is assumed by law that the insolvency maturity is due to the pandemic and that there is a reasonable prospect of eliminating the existing insolvency.
Section 3 COVInsAG corresponds to this provision. According to this provision, the creditor can only file for insolvency within three months of the Act coming into force if the reason for opening insolvency proceedings (inability to pay, imminent insolvency and over-indebtedness) already existed on 1 March 2020.
III. Provisions regarding "material continuing obligations" in contract law
In Art. 240 § 1 EGBGB, the legislator grants consumers and micro-entrepreneurs the right to refuse benefits on the basis of a material continuing obligation which was established before 8 March 2020 until 30 June 2020, extendable until 30 September 2020, if the payment would jeopardise the reasonable livelihood or the economic basis of the acquisition business. A further condition is that the lack of performance is due to the COVID 19 pandemic.
Material continuing obligations are those that are necessary to cover them with services of appropriate general interest (consumers) or to cover them with services for the appropriate continuation of the business (micro-entrepreneurs). Special regulations for tenancies and loan agreements must also be observed here.
The moratorium does not apply if it is unreasonable for the creditor because it jeopardises the coverage of his reasonable subsistence or the economic basis of his business.
A right to refuse performance calls into question the enforceability of the claim and thus a prerequisite for default. Since the enforceability is part of the objective facts, it does not have to be asserted - at least not out of court - in order to make the default lapse.
Actual information: A frequently occurring problem is the effectiveness of an agreed pallet exchange in transportation industry
What is to be considered here?
The pallet exchange represents a separate part of the contract, which is to be seen separately from the actual freight contract. The regulations in a transport order are therefore a mixed contract.
Case law has determined that a pallet exchange may not be included in the transport order within the framework of general terms and conditions. Rather, the prerequisite for effectiveness is that the pallet exchange is regulated within the framework of an 'individual agreement between the parties. In order to effectively agree on a pallet exchange, the parties must therefore negotiate individually in advance about the obligation to exchange pallets. A further prerequisite according to case law is that a separate remuneration is agreed for the pallet exchange. The freight contract must therefore show a remuneration for the actual transport and a remuneration for the pallet exchange.
Are lump-sum compensation claims frequently used? Are these effective?
First of all, it should be noted that this is a compensation claim, which is sought if the pallets are not exchanged or returned. It is therefore a compensation instead of the service according to § 281 BGB. According to the law, however, this can only be demanded if the debtor - in this case the carrier - has been set a reasonable period of time for subsequent performance. Before damages can be claimed, the carrier must be requested once again to hand over the pallets, setting a deadline. Setting a deadline is only dispensable if the carrier has seriously and finally refused to hand over the pallets. This regulation cannot be circumvented by setting a deadline for return delivery in the transport order, after which damages shall be due immediately.
And the flat-rate amounts for the replacement of the pallets?
The inclusion of lump-sum compensation amounts should also be ineffective between entrepreneurs if the carrier is not given the opportunity to prove that the compensation is lower. In order to be effective, the clauses on damages must therefore contain a formulation according to which the carrier is at liberty to prove a lower damage.
Invoice send by e-mail - a legal problem?
Debtors sometimes alleged that they need the invoice in paper and originally signed.
It is legally not necessary to sign an invoice.
Do I need a Debt Collection Attorney or shall I choose a specialised Law Firm like Yours?
It s not necessary but advantageous tho hire a specialised Law Firm as ours because a debt collection agency can assist you merely in out of court proceedings.
If court proceedings become necessary each debt collection agency will transfer the case to a Lawyer or Law Firm. It means to spend supplementary costs and a considerable lag of time.
Furthermore the services of a debt collection agency is regularly legally not to cover by the debtor.
Our new Safety Packages - Information counts!
The problem: Often creditors realise impending default firstly if their business partners do not pay the invoices after several reminders. Often it is too late to ensure payment and to trace the debtors.
Please check our offers here: Safety Packages -->>
Reasons why we need a Power of Attorney/PoA/Proxy:
The debtor and – in enforcement proceedings – the bailiff or the court requests to present a signed PoA of the client. Due to the new law provisions for bailiffs they have to request an original signed PoA before transfer of any collected monies.
A PoA is document, a certificate of authority, which proves that the client has mandated the attorney/lawyer to act on his behalf. The debtor or the bailiff must be secured that the attorney is in fact entitled to act on behalf of the client, to claim for the debt, to initiate court proceedings and – this is often most important – to receive payments of the debtor.
The debtor is interested that the attorney is authorized to claim for the debt or to receive payments as if the debtor would pay to the client directly (full power of attorney).
Regularly it is not a legal requirement to present a PoA. But if the debtor/bailiff/court requires to present a PoA we must – otherwise the debtor can ignore our letters and claims like nothing has happened.
Therefore we always recommend to sign and send back PoA by e-mail plus by mail (original) to avoid discussions with the debtor, bailiff or court about our mandate.
If it becomes necessary to terminate a contract it is legally indispensable to provide the debtor with a signed PoA.
The same is in bankruptcy proceedings: The administrator requires to present a PoA in each case.
The PoA is a document directed to the debtor or court/bailiff, a proof of authorization, and not an agreement, contract or a document which changes conditions or establishes conditions between the client and attorney not agreed before.
Here our reply (excerpt):Our thoughts are very easy:It is the decision to waive the claim finally or to invest an amount which is remarkable smaller than the credit you granted the debtor. Therefore you should pursue the claim particularly we found no pending bankruptcy proceedings (no guarantee). I agree that court proceedings could force the debtor to file for bankruptcy proceedings initially. I also agree that the financial standing of the debtor seems bad but for our point of view such a huge claim should not be discarded. The possibility of receiving any payment should not be omitted.
More explanations to bankruptcy proceedings: more
Success of debt collection is depending on ...
Often we are asked for a possible success of collection and prospects to enforce the debt.
Please note that success of collection is regularly not a question of the legal position or applicable law.
Success in debt collection rather is depending on all information about the debtor like complete and valid postal address, full name, Birthday, legal form (corporate company or individual), email accounts, web sites, TelNo. and Fax.No., bank details, assets like shares, real estate (...) of the debtor and the documentation the client provides us with.
Regularly we do not know if the debtor is solvent (anymore).Certainly we gather all information about the debtor in each case by our databases and research proceedings! We check the risk before starting court proceedings and we can get information if the debtor has filed for bankruptcy very quick. On the other hand it is to take in account that the client has concluded the contract. Therefore he was or is much closer to his former business partner as a debt collection agency or lawyer. Furthermore it is regularly not possible to get reliable information about the factual and definite real financial standing of the debtor.
But there are simple steps to reduce risks and to get an impression on the standing of the debtor:
- Is the phone of the debtor working, also fax and email? Is the Homepage still online?
- Which results can be found about the business by using a search engine like Google, Bing or Yahoo? Do we find different addresses, phone numbers, negative reviews, kinks to different business activities ...?
- Is a contact to the debtor possible? Is it possible to get information by employees, commercial agents or common business partners?
What do I have to do if I want you to collect our debt?
Here our simple answer: Please send us the invoices via email! We will contact you immediately.
(if possible no zip-, msg, eml- or rar-files, not more than 3MB per mail or by fax 0049-22116844619/30520048045 and inform us if you not receive a confirmation of receipt within 48 hours).
Statute of limitations/Limitation of action:
Please note that Your claims of Year 2014 could become time-barred on 31.12.2017!
Please note that a claim based on purchase is legally statute-barred after 3 years starting from conclusion of contract (order, confirmation of order).
After 3 years it is no longer possible to sue the debtor at court (end of the year).
Please note that a claim based on transport is legally statute-barred after 1 year. The regular limitation period for all claims of the buyer/purchaser for defects liability/implied warranty is 2 years.
If you claim for a different cause in law (f.e. loan) please contact us.
Hence, the regular limitation period is basically 3 years for all claims based on civil law (with lot of exceptions). Exceptions are stipulated in the law (please note: the regular limitation period for all claims of the buyer/purchaser for defects liability/implied warranty is 2 years).
The legal meaning and consequence of the Statute:
The Statute is not to check and judge by the court but if your debtor objects the Statute the court has to prove and judge it. This means that you can sue your debtor at court and you can win court proceedings but you have the risk that the debtor object the Statute and you would llose the case.
How to calculate:
The limitation period generally starts end of the year in which the claim legally comes into existence regularly by concluding a contract, not the date of delivery.
Example: if the claim came into existence on 30.07.2015 the limitation period starts on the 31.12.2015 and ends on the 31.12.2018. If the last day is not a working day the period defers to the following working day.
But there are further exemptions: f.e. in case of transport the limitation period starts at the date of delivery (not end of the year).
How to suspend or interrupt lapse of time?
The only fail-safe method to interrupt lapse of time is to initiate court proceedings on 31.12. each year at the latest! It is only necessary to file legal action to court by application.
The application or plaint must definitely be received by the court before that day. Otherwise your debtor can plead the statute of limitations and it is not possible anymore to force the debtor to payment.
The expiry of period of limitation shall be suspended in cases of negotiations between the parties about the claim or the facts which are the basis of the claim or initiation of court proceedings. The limitation period is extended by that time period. That is what we cannot assess without further information. Attention: often it is difficult to prove such "negotiations".
Please contact us if you need further information.
Our debt collection services in other European countries:
We offer our services in debt collection to the same conditions all over Europe as well! Therefore we collect outstanding debts also in Belgium, Netherlands, Switzerland, Austria ... free of charge in out of court proceedings. Please note that our service is provided in English language. In case the debtor does not react or definitely refuses to pay out of court we have to recommend to take court action by Lawyer's in the country of the debtor. For that purpose a Law Firm in the homeland of the debtor must be mandated and we can assist to communicate.
Please contact us if you need further information.
What to do if the debtor does not keep his promises to pay? The most effective way to secure payments:
Generally we recommend to take the debtor to court to obtain an enforcable writ of execution/judgment even if he acknowledged the claim, made payment offers but did not keep his promises or is in delay of payment.
Please note: In cases the debtor agreed to pay, acknowledged the debt, confirmed that he has to pay, offered a payment plan a.s.o. it is legally not possible for him to contest his obligation to pay in court proceedings. Hence prospects to obtain a judgement to the favour of the client fast are very promising.
By an enforcable writ of execution/judgment it is possible to take immediate steps to enforce the writ of execution/judgment by seizure/attachment of the bank accounts, wages, earnings, to order a bailiff or to force the debtor to affidavit of means (to compile a schedule of his income and assets) a.s.o.
Such a handling does not exclude an amicable payment plan but in contrary secure that the debtor keeps his obligations and the dates of payment.
Therefore we can put more pressure on the debtor and we do not lose time to obtain a court order or judgment.
To initiate court proceedings we can offer favorable, competitive terms and reasonable fixed-rates.
Because clients from abroad often are reluctant to incur costs and fees for court proceedings we have restructured our conditions related to undisputed claims up to 15,000 EUR.
From our experience debtor's increasingly ignore reminders and dunning letters from the clients as well as from Lawyer's. The background often is to wait out if the creditor takes the matter serious and take the claim to court or waive the claim some day. Even in cases of a bad financial situation it mostly possible to find an instalment agreement anyway if the pressure of pending court proceedings forces the debtor to react.
The step to court is important because the debtor has to note that now court proceedings are pending and the creditor is definitely willing to pursue his claim and is able to enforce the claim in near future.
Court and Lawyer's fees in Germany regularly are related to a legal table. Related to court fees we have no possibility to change any conditions but related to our fees we can offer different conditions.
In Germany we can initiate court proceedings by electronical court proceedings to achieve a court order to pay a debt. Because our workflow is well organized in data processing with all courts in Germany we can offer different conditions for our services as long as the debtor does not contest the claim. Even in this case we have to provide the court with a detailed statement of claim in written and we have to attend to a court hearing, so that processing of the file means considerable work for us we can not afford without being paid for our services.
Please contact us for details.
The advantage for the client is that he has to invest less money than usual and get notice shortly if the debtor contests and he has to invest more money and has the risk to lose the case or if it is possible to obtain an order to pay a debt in around 8-12 weeks. In cases the debtor raises objections or file an appeal to the court the client can decide to stop all activities or to pursue the claim at court further on.
The debtor is obliged to refund all court fees, if he is defeated in the lawsuit. Hence, all lawyer's and court fees and costs are basically recoverable from the debtor.
Our new Service in tracing a debtor:
Not only for court proceedings a valid postal address of your debtor is important: A company without postal address is probably out of business.
To check the postal address, telephone connections, pending bankruptcy proceedings, affidavit of means, we offer a flat of 80 Euros for companies and 3,90 EUR for individuals. Please use Paypal (contact) for fast processing or send us an email, we will instruct you how to proceed in detail.
Recommendations in debt collection by view of German Lawyers:
Because of the recent economic developement German business partners which were in financial difficulties in the past years probably won't come out of this situation in the next future.
They will try further on to delay payments by promises, false allegations about the bad financial situation, excuses and far-fetched legal objections like defective of goods a.s.o.. Your attempts to force the debtor to payment by phone calls and emails failed...
Based on our experience of 25 years we have to state that in the past it was mostly sufficient for us as Lawyer's to force a debtor to a fast reaction by letter and phone calls. Nowadays debtor's do not react anymore, they bury their heads in the sand, ignore the situation, sit out the situation, hope that never serious steps will follow ... . Moreover if they react the play further on, instalment payments are delayed, promises to pay next week ...
The only measure to get strength, seriousness and severity in proceedings is to take them to court from the beginning. This measure disclose to the debtor that the situation becomes serious and that it is possible that enforcment proceedings can follow immediately if the debtor does not keep his promises or instalment agreement.
Such a handling does not exclude an amicable payment plan but in contrary secure that the debtor keeps his obligations and the dates of payment.
By this we can put more pressure on the debtor and we do not lose time to obtain a court order or judgment.
In Germany it is possible to institute electronical proceedings (electronic data processing by the court) very fast and easy. The advantage is that (court) fees are less than in ordinary proceedings at court. Please call us if you require more information.
The 10 most important problems to collect a debt:
1. Neither the full company name and legal entity nor the name of the legal representative of your business partner is known.
2. The exact postal address of your business partner is not known (P.O. Box is not sufficent)
3. You do not know all contact details of your business partner (fax, email, Homepage)
4. You don't have checked telephone connection, nor the Internet to find information about your business partner.
5. You do not know bank details of your business partner.
6. You do not have something in written concerning the business deal (order, confirmation of order, delivery notes, emails) or those information are deleted (emails)
7. Your invoice is not correct (Invoice-date, Invoice No., VAT-Id-No., kind of performance)
.... to be continued