WHEN SHOULD I ENTRUST A CLAIM TO A DEBT COLLECTION AGENCY?
The earlier the claim is entrusted, the greater the chance of recovery!
This might seem obvious, but practice shows that creditors generally wait too long. Either out of concern for “client relationships”, negligence, disorganisation, lack of resources, or more simply because the creditor believes their debtor will “end up paying”, like they promised… In the meantime, the creditor’s financial situation deteriorates, it is forced to refinance its WCR, its development projects are put on hold, postponed or cancelled…
WHEN DO I HAVE THE BEST CHANCE OF RECOVERY?
Lawyers are very familiar with this question, it even has a name: “the price of the race". This is the situation where you have every chance of “winning the race”… as long as you’re one of the first, or even the first, to claim your due.
Your client received goods or benefitted from services, they received your invoice, they received your payment reminder 15 days after the due date. They cannot ignore the amount they owe you.
Don’t wait any longer to be "in the race", because other creditors will act faster than you...
WHAT SHOULD I WRITE TO MY DEBTOR CLIENT WHEN THEY DON’T PAY ME?
After sending your invoice, and your payment reminder(s), you can claim the payment by sending your debtor client formal notice to pay by registered letter with acknowledgement of receipt.
WHICH METHOD SHOULD I CHOOSE TO RECLAIM THE AMOUNT DUE: “SUMMONS TO PAY” OR “REGISTERED LETTER”?
The law provides – and the courts scrupulously enforce this rule – that "the registered letter" constitutes "official notice." There is therefore no point in issuing a summons, which is much more costly and has no more judicial efficacy than a registered letter with acknowledgment of receipt.
WHAT SHOULD I DO WHEN MY DEBTOR DISPUTES THE AMOUNT DUE UPON RECEIVING MY REGISTERED LETTER?
Respond, being very careful – and brief – in the content of your message. If you believe that the dispute is unfounded, you simply need to confirm the claim for the amount owed without going into the details of the dispute. Indeed, if you were ultimately to refer your payment claim to the courts, this message would be in the file of your client-debtor. They could use your reply to confirm that you did in fact acknowledge that goods were not suitable upon delivery, deadlines were not respected, services were not properly completed, etc.
HOW DOES A COPY OF MY MESSAGE END UP ON THE JUDGE’S DESK?
Under the great principle of "communication of documents to the adversary", the law provides that the documents used by the applicant and by their adversary must be "exchanged", i.e. they must be known to both parties to the case.
WHEN IS IT REALLY WORTH STARTING PROCEEDINGS?
It is "worth" starting proceedings:
- If your debtor is solvent. This does not mean that they will still be solvent by the execution phase of the court ruling, but you will have put the odds in your favour.
- If you have the file documents that establish the reality of your claim: signed order form or signed delivery note.
WHAT ARE THE POSSIBLE REMEDIES IF I DO NOT HAVE AN ORDER FORM OR DELIVERY NOTE SIGNED BY MY CLIENT DEBTOR?
If you have been "trapped" by a verbal order, for example, and your file simply consists of an invoice, the situation is tricky: you can take legal action, but your chances of success are lower because the courts demand proof of your claim and your invoice is not sufficient proof. You will have to develop arguments reconstituting this proof.
For example, the fact that your debtor customer has not challenged your invoice, that they did not respond to your recommended reminders... etc.
However, you will need to gather all the necessary documents because the judge will pay close attention to the order of events before handing down a decision in your favour.
WHAT ACTION CAN I TAKE AGAINST THE MANAGER OF THE COMPANY WHO OWES ME MONEY?
The law has established a great rule: the assets of one person cannot be used to settle the debts of another!
Therefore, if the manager of the company that owes you money has personal property, it is not legally possible to consider having it seized to pay you.
The manager’s assets are legally "separated" from those of the company. If you want the manager to be liable for the amount owed, he would need to commit himself "personally" and not just in his capacity as manager of the company.
WHY AREN’T FRANCE CREANCES’ FEES PAID BY MY DEBTOR?
The law provides that collection costs cannot be charged to the debtor "without a writ of execution".
This means that you can only recover the costs necessary to start legal proceedings if you obtain a ruling in your favour that includes – in addition to the principal, which is commonly referred to as "costs", meaning expenses – any legal costs advanced.
However, even with a favourable legal ruling, some costs are still borne by the creditor: lawyers' fees, the proportional fee of the process server, etc.
HOW CAN I BEST PROTECT MYSELF AGAINST THE COSTS OF A POSSIBLE PROCEDURE?
Your general conditions of sale are your best guarantees.
When they apply and are included in an order form or delivery note, they may set out a "penalty clause" which will penalise late payment and the amount of which will compensate, in full or in part, the recovery fees you have to pay.