FAQs about the judicial dunning procedure

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Table of contents:
  1. What is the judicial dunning process?
  2. When is the judicial dunning process appropriate?
  3. What does the judicial dunning process cost?
  4. How can the judicial dunning process be prematurely ended or interrupted?

What is the judicial dunning process?

The judicial dunning process is a legal procedure designed to help creditors collect outstanding debts. It becomes relevant when prior reminders have failed to resolve the issue.

The goal is to obtain an enforceable title, which allows the creditor to enforce the claim over a period of 30 years. During this time, the statute of limitations is suspended, enabling the creditor to take measures to recover the debt.

The judicial dunning process has two distinct stages:

Dunning notice

  • Filed with the competent district court (dunning court) of the debtor.

  • Officially informs the debtor about the claim and sets a deadline for payment or objection.

Enforcement notice

  • If the debtor does not object within the deadline, the creditor can apply for an enforcement notice.

  • The enforcement notice is an enforceable title that enables compulsory enforcement actions.

The process concludes with the issuance of the enforcement notice, which includes an enforcement clause.

If a creditor obtains an enforceable title (e.g., an enforcement notice) and the debtor still does not pay, the following steps can be taken:

Compulsory enforcement

  • If the debtor does not file an objection to the enforcement notice within the deadline, the creditor can apply for compulsory enforcement.

  • The court orders the seizure and liquidation of the debtor’s assets.

Contentious proceedings

  • These are necessary if the debtor objects to the dunning notice or files an objection against the enforcement notice.

  • The court resolves the dispute between the parties and makes a binding decision.

When is the judicial dunning process appropriate?

The judicial dunning process is useful when:

  • All other out-of-court attempts to collect the claim have failed.

  • The claim is clear and undisputed, meaning the creditor has an unequivocal right to demand payment.

  • The statute of limitations is approaching, and quick legal action is needed.

The process is not suitable if:

  • The debtor disputes the claim or raises counterclaims. In such cases, litigation is more appropriate.

  • The exact amount of the claim is uncertain. This should be clarified first.

  • The debtor resides outside the EU, as the European dunning process only applies within the EU. International procedures are required in such cases.

What does the judicial dunning process cost?

The costs consist of various fees, including court fees. These are payable when applying for a dunning notice and cover the entire process, including the enforcement notice. The amount depends on the claim's value (dispute value).

Examples of court fees:

  • Dispute value up to €1,000: €36

  • Dispute value over €1,000 to €1,500: €39

  • Dispute value over €1,500 to €2,000: €49

  • Dispute value over €2,000 to €3,000: €59.50

  • Dispute value over €3,000 to €4,000: €70

  • Dispute value over €4,000 to €5,000: €80.50

  • Over €5,000: Fees increase accordingly.

Additional attorney fees may apply if a lawyer is involved, calculated based on the German Attorneys’ Fees Act (RVG) and the dispute value. Costs for debt collection agencies or legal service providers must also be considered.

Who bears the costs?

  • The debtor: In principle, the debtor bears the costs, which are added to the main claim and included in the dunning and enforcement notices.

  • Advance payment by the creditor: The creditor must initially advance court and possibly attorney fees. These can later be reclaimed from the debtor.

  • Reimbursement claim: If successful, the creditor recovers the costs upon payment by the debtor. If compulsory enforcement is initiated, these costs can also be recovered through asset seizures.

  • Risk of non-recovery: The creditor incurs losses only if the process fails or the debtor is insolvent.

How can the judicial dunning process be prematurely ended or interrupted?

There are several ways to terminate or interrupt the process. Some decisions rest with the creditor, while others depend on the debtor's actions.

1. Settlement or out-of-court agreement

The process can be halted if an out-of-court settlement is reached. Both parties agree on an alternative solution, ending the procedure. This saves time and costs, providing a swift resolution without further legal steps.

2. Withdrawal of the procedure

The creditor can withdraw the procedure at any time before an enforcement notice is issued or an objection is filed. This often occurs when pursuing the claim is deemed unviable. Withdrawal ends the procedure without further costs or measures. However, the claim itself does not expire, leaving the creditor free to pursue it later.

3. Immediate transition to contentious proceedings

In some cases, the process transitions to litigation without the creditor’s choice:

  • Objection to the enforcement notice:
    If the debtor objects, the case automatically moves to contentious proceedings. The creditor must pursue the claim in court, incurring additional court and legal fees and requiring significant effort. If the creditor loses, they bear all costs, including the debtor's.

  • Objection to the dunning notice:
    If the debtor objects to the initial dunning notice, the creditor decides whether to file a lawsuit. This also entails additional costs and risks, as the creditor may have to pay both parties’ expenses if they lose. Thus, the creditor must carefully weigh the risks before proceeding.