Amicable recovery: recovery and demand to pay
Verified 27 November 2024 - Directorate for Legal and Administrative Information (Prime Minister)
When a company finds that its customers are late in paying, it must react quickly. It can first try to recover its unpaid debts amicably without taking legal action. This usually results in a revival and then, in case of failure, a formal notice.
Amicable receivables are those whose payment date has passed and which have not yet been settled by the customer.
The time taken to pay an invoice varies depending on whether the customer is an individual or a professional:
- When the customer is a individual, payment is usually due immediately, there is no specific time limit. We are talking about cash payments.
- However, when the customer is a professional, time varies between 30 and 60 days. The length of the payment period depends on the seller's industry. It is only at the end of this period that the payment becomes due.
For more information on payment terms, you can consult our dedicated card.
Amicable recovery can be done in 2 steps which are not not required : Recovery and formal notice.
For small claims (less than €5,000), the company may entrust the amicable recovery to a Commissioner of Justice. To learn more about this procedure, see the dedicated card.
FYI
The company may also delegate the recovery of its claims to a overlay business. However, there is a cost.
Restart your customers
Revival is not a mandatory step, however it is used almost systematically by companies who wish to recover their unpaid debts. The company contacts its client by telephone and/or in writing to remind him that he has not paid his bills. Usually, reminders are made by the company's accounting department.
Stimulus can be effective when the unpaid is the result of a forgetting of the customer or of a temporary difficulty.
On the other hand, when the unpaid amount is linked to a dispute between the company and its client, it is not necessary to revive it. A solution to the dispute must be found with the client before an amicable recovery operation can be set up.
When a reminder to recover unpaid amounts is in progress, it may be useful to contact the sales department to avoid new orders being placed or specific payment terms being requested.
If the stimulus does not work, there is no need for more stimulus. You have to go through the formal notice.
Please note
Recovery is not a mandatory prerequisite for sending a formal notice or summons for payment to the court.
Putting customers on notice
When a company faces unpaid debts, it can use the demand notice to recover the money owed to it. The formal notice is not mandatory except in special cases.
Warning
The subcontractor must demand payment from the prime contractor by sending a formal notice. He must send the contracting authority a copy of this letter of formal notice. The subcontractor may request payment for his services directly from the developer only when the contractor does not pay, one month after being served with formal notice.
The formal notice may be given in one of the following ways:
- By summation : it is an act of a commissioner of justice (formerly a bailiff) by which the debtor is ordered to pay a certain sum. The summation can be very effective because it has a strong psychological impact on the debtor . However, the summons has a cost, which is why the summons to pay for a small claim is not necessarily attractive.
- By registered letter with acknowledgement of receipt bearing sufficient inquiry. It must be drafted in sufficiently clear and formal terms to qualify as a formal notice.
- By the contract where it provides that the debtor is to be given formal notice only by the chargeability payment. Payment deadlines have expired and payment must be immediate.
Formal notice is usually used by creditor. However, there are situations in which debtor may take the form of a formal notice. This is the case, for example, where the creditor refuse to receive payment due to him or her, or shall make every effort to prevent the debtor to pay his debt.
In the professional relations, late payment penalties are due from the date on which the payment should have been made (e.g. date indicated on the invoice). The formal notice shall make it possible to put an end to the interest accruing from the default.
If the company has exhausted all means at its disposal to try to recover its unpaid debts in vain, then it may seek recovery of its unpaid debts in court. It is the judge who will order the debtor to pay what he owes to the company appealing to him. This is a legal procedure who goes constrain the debtor to pay the money for which he is liable. This is called judicial recovery.
The different types of court recovery are:
- Order to pay : the company shall file and file with the court a file for an injunction requiring the debtor to pay.
- Application for interim measures : the company applies to the judge for an order for payment of an advance (or provision) by the debtor. In this case, the creditor and the debtor shall be summoned to a hearing.
- Assignment for payment : The company initiates a standard judicial procedure to obtain payment of its claims. It's a longer and more expensive procedure.
Who can help me?
The public service accompanying companies
Do you have a project, a difficulty, a question of daily life?
Simple and free - you will be called back within 5 days by THE advisor who can help you.