When a business debtor does not pay its invoices on time, the consequences can be serious. Not only does the company suffer from financial losses, but also its reputation can be damaged. In some cases, legal proceedings may be necessary to recover the debt.
This guide will give you an overview of the debt collection procedure in Belgium. We will explain the different steps in the process, and list the benefits of using a local debt collection agency. We will also provide some useful tips on how to avoid payment delays.
What Is the Amicable Debt Collection Procedure?
If you're owed money by a Belgian company, the first step is to send them a letter of reminder. This is a formal notification that you're owed money, and it should include all the relevant details about the debt—including the amount owed, the date of the invoice, and any interest or late payment fees that have been incurred.
If this doesn't get results, you can then send them a formal notice. This is the next step in the amicable debt collection procedure, and it's a legal document that demands payment of the debt within a certain timeframe. If payment isn't received, you can then start legal debt collections in Belgium.
How Does the Legal Debt Collection Process Work in Belgium?
When a Belgian business is owed money, there are two routes that can be taken in order to recover the debt - the amicable route or the legal route.
The amicable debt collection procedure is the first step and it does not require the intervention of a judge. The payment order is a simplified legal process that can be used for Belgian debt collection and it will help to speed up the process.
If the debt cannot be recovered through amicable means, then the legal route must be taken. This will involve taking the case to court and the business will need to provide evidence that the debt is owed. The court system in Belgium for commercial debt cases is relatively fast and efficient, and businesses can usually expect a result within six months.
There are a number of benefits to using a local Belgium Debt Collection Agency, including:
- expertise in Belgian law and procedures;
- familiarity with local courts;
- connections with local enforcement agencies; and
- knowledge of local customs and culture.
Benefits of Using a Local Debt Collection Agency in Belgium
When it comes time to collecting business debts in Belgium, using a local debt collection agency can offer a number of benefits.
Here are seven key benefits of using a local debt collection agency in Belgium:
- Faster results: A local debt collection agency will have an in-depth understanding of the Belgian legal system and how to navigate through it quickly and effectively.
- Less stress: Trying to collect a debt on your own can be extremely stressful. Leave the legwork to the experts and focus on your business.
- Greater chances of success: By working with a local debt collection agency, you're tapping into their extensive knowledge and resources, giving you the best chance of success.
- Reduced costs: Working with a professional debt collection agency can be more cost effective than taking legal action yourself.
- Avoid court appearance: One of the main benefits of using a professional debt collector is that you don't have to go to court. Let the experts handle all the legwork for you.
- Professional representation: A good debt collection agency will provide you with professional representation, showing your creditors that you're taking the issue seriously and are willing to do what it takes to get your money back.
- Keep your good reputation: Working with an ethical and reputable debt collection agency will help you maintain your good reputation, both in Belgium and abroad.
Step by Step Guide on Collecting Business Debt in Belgium
Successful debt collection requires a well-defined strategy. The first step is to contact the debtor and inquire about their situation. This can be done by sending a friendly reminder letter to the debtor with clear payment instructions. If that doesn’t work, then it’s time to take legal action.
In Belgium, debt collection agencies are the only entities allowed to take legal proceedings against debtors. Here’s how it works:
- First, the agency will conduct an “extensive inquiry” into the debtor’s financial capacity to pay back their debts.
- Next, if necessary, they will issue a “pre-legal” letter which includes all the relevant details about the case and demands repayment of the debt.
- If this fails to get results, it is time for a “final warning letter” which has more of a formal completion and carries with it threats of legal action should payment not be made promptly.
- After this final notice is sent out, if payment has still not been received, then the collection agency can take the case to court with a view to getting a judgement in their favour.
The Court System for Commercial Debt Cases in Belgium
When your amicable debt collection efforts in Belgium have failed or the debtor is not responding to any of your notices, then it’s time to take legal action. The court system in Belgium is similar to those in other European countries, with different levels of jurisdiction that handle certain types of cases.
Belgian courts are divided into commercial courts, regional courts (which can handle cases such as labour disputes and zoning laws) and court of appeals. All court summonses must be made via registered mail. If the debtor refuses to pay, you can ask the court for a “reciprocal penalty”, whereby a penalty is imposed upon the debtor for not paying their debts. The penalty will depend on the amount of debt owed.
Finally, if necessary, you can request that assets belonging to the debtor be seized or auctioned in order to pay off the debt. This should generally be a last resort, as it may sour relations with the debtor and could even damage their reputation if it becomes public knowledge.
Fun Facts About Debt Collection Services in Belgium
Belgium is the right place to start debt collection process, as the country follows strict EU regulations and offers a wide range of modern facilities and resources to help you recover what you are owed. Here are some fun facts to help you learn more about Belgians’ attitude towards debt collection:
- Did you know that in Belgium, debtors who hire a professional debt collector for an amicable recovery procedure are considered more trustworthy?
- Did you know Bellewether (‘bintlems’) is an old-fashioned word used in Belgium to describe a person who pays other people's debts?
- Did you know that Belgians often joke about using a “debt collection agency” to keep their friends in check?
- Did you know that Belgian law does not allow debt collectors to send empty threats or use forceful tactics? 5. Do you know that a Belgian court order can be sent within 30 days, with payment expected within 7 days of receipt?
- Do you know that Belgians understand the importance of paying as promised, and they take business debts seriously?
Ten Interesting Economic Facts About Belgium
- Belgium has a population of 11.49 million, making it the 72nd most populous country in the world.
- The GDP (Gross Domestic Product) of Belgium is $522 billion, making it the 23rd largest economy in Europe and the 32nd largest economy in the world.
- Belgium is a highly developed country with a high Human Development Index ranking of 0.902 and ranks 4th on the OECD’s Better Life Index.
- Belgium is one of the founding members of the European Union and its currency is the Euro, making it easier to do business on an international level with European traders and customers.
- The primary industry sectors in Belgium are automotive, chemical, IT, pharmaceuticals, food processing and construction industry, which account for more than half of the country's total exports.
- In terms of exports, Belgium is one of the 10 largest exporters in Europe with exports totaling $224 billion in 2017 alone!
- The Belgian banking sector is highly regulated and has some of the most stringent rules for commercially-oriented activities like debt collection within Europe!
- Belgium has some of lowest corporate tax rates among developed countries at 25%, making it appealing to foreign companies looking to set up businesses outside their own home countries!
- According to recent data from Eurostat, Belgium’s unemployment rate stands at 8% as opposed to other European countries like Spain (18%) or Greece (27%).
10 . One final fun fact about debt collections services in Belgium? Debt collection services fees are regulated by laws which also ensure that all parties receive fair treatment regardless of nationality or language spoken!
When it comes to the process of collecting business debts in Belgium, it's important to be aware of the fact that there are two separate procedures that can be followed: the amicable debt collection procedure and the legal debt collections procedure.
Both of these procedures have their own set of steps, and it's important to understand which one is the best option for your particular situation. Additionally, there are a number of benefits to using a local debt collection agency in Belgium, including the fact that they will have a deep understanding of the Belgian court system and economy.