Duration of the debt collection procedure in Germany
If the claim is not disputed the files might be closed within a time-frame of 3 until 6 months.
In all cases where the claims are disputed, the duration depends on the legal questions involved and under dispute.
Succes Rate and Risk Management in debt collection cases
Legal risk exposure in b2b collection cases depends highly on the industry sector involved, the contractual background, the client’s out of court activities and the debtor’s economical situation. This background has to be explored in order to evalute the individual risk.
Generic risk situation for b2b collections in Germany
Success-rate of undisputed extrajudicial claim collections in Germany lies in an average range of 50 percent (source: Bundesverband Deutscher Inkasso-Unternehmen e.V. 2014). Litigation risk lies at an average exposure range between 30 to 40 percent.
The Federal State of Bavaria shows even a better rate all over Germany. If one focuses on company related collections (“b2b”) the success rate is even higher than the collection rate of private claims. This means that companies with undisputed claims and persistent credit assessment management have sincere prospects of a reflux of liquidity.
Only a smaller portion of the cases is insolvency-related and will either be terminated voluntarily by the customers due to business reasons or do not have legal prospects for a final success.
The practical realization and success rate further on depends highly on the participation of professional legal debt collection partners. As far as legal professional partners are involved, the success rate with undisputed claims lies even higher than the figures mentioned depending again on the industry sector concerned.