Debt Collection Agency Netherlands
Amicable Debt Collections Netherlands
1. General information
Cosmopolite Collections maintain a professional collection process, focusing on the relationships between our clients and their debtors at all times.
Our team of collection specialists carry out the collection process in-house, contacting debtors both verbally and in writing whilst adhering to applicable laws.
When there is a case of dispute, we may call on our experienced team of Dutch legal collectors, who each has a master’s degree in law, to help us.
They mainly take a consultative role but may take over the case if the dispute is related to legal aspects.
In the event that mediation by legal collectors might not lead to an agreement and legal proceedings are indicated, the file will always be dealt with by the Dutch legal team.
1.2. Local agents
Cosmopolite Collections do not offer a general service for visiting debtors through a local agent, but at a case level, it will always be possible that (legal) collectors visit debtors.
If the debtors wish to visit our premises, we will gladly arrange a face-toface meeting to discuss the situation. We can provide clients with a high-quality professional network of experienced lawyers and/or law firms (LDCs) in the Netherlands at very competitive rates.
The LDC network covers the whole of the Dutch territory, and the LDCs are able to carry out all legal action in all district courts.
We can also offer the services of a high-quality network of professional and experienced bailiffs, who are appointed by law to carry out the enforcement of verdicts or judgments.
Cosmopolite Collections always charge debtors with interest calculated at 12% per annum on a daily basis.
This percentage is higher than the one embodied in the European Directive concerning legal business interest, but is in accordance with the clauses in the majority of purchase conditions and/or other business conditions.
Interest will always be claimed in both the amicable and judicial phases.
In the Netherlands, it is common practice to receive interest on overdue invoices, and there are rarely discussions as to the liability of the debtor when paying interest.
In court, interest payments are considered a justified demand in relation to overdue accounts. If the creditor is able to prove that the business or purchase conditions are applicable, interest can be charged at 12% per annum.
In the event that no specific conditions were agreed, it is possible to request interest according to the European Directive, and in the Netherlands the so-called legal business interest rate, which is variable.
1.4. Debt Collection Costs Netherlands
In the amicable phase, Cosmopolite Collections are able to collect the client’s invoices and interest to a certain extent with collection costs.
Debtors are charged an extra 15% in collection costs over the principal amount, and we are fully focused on collecting costs within the bounds of law and jurisprudence.
From a legal point of view, the collection costs can only be recovered from the debtor on a scale related to the principal amount, which has been entrusted for collection.
If it is successful in collecting the principal amount, it is possible to recover a certain amount of collection costs from the debtor through legal proceedings.
The court uses a tariff table related to the legal proceedings in order to identify what amount of collection costs can be recovered from the debtor. It is a complicated issue in jurisprudence, and there is usually only a small amount granted, despite clauses in a written agreement and/or purchase conditions.
In fact, the judge is free to condemn the debtor to pay collection costs as long as they are considered reasonable, but the granted costs are normally part of the provision agreed with the client. In 2012, a bill was passed that sets out the levels of collection costs to be paid by private persons or consumer debtors who are in default.
These specific legal collection costs are more or less aligned with the jurisprudence. It should be noted that the legal collection costs also apply in the businessto- business segment as long as the parties do not agree otherwise.
Since legal proceedings concerning collection costs are time-consuming and costly for debtors and creditors, we are quite successful in reaching agreements with debtors with respect to collection costs.
The Dutch law has several terms on the prescription of debts, the most common of which relates to commercial (business) claims (e.g. purchasing, rendering services, contracting).
For these transactions, the general prescription term is five years, calculated from the due date of an invoice. Prescription can be opposed by registered mail and/or a written announcement through a bailiff, with the effect that a new term of five years will commence.
It must be noted that the creditor has to prove that the debtor received the announcement. Exceptions are possible; for example, in the transport sector, shorter terms of prescription of debts are used, according to the Convention on the contract for the international carriage of goods by road (CMR) Treaty.
1.6. Accepted and most common payment methods
The most common payment method is bank transfers. In international cases, cheque payments can be accepted by Cosmopolite Collections.
1.7. Types of companies
Like most other countries, the Netherlands have two major groups of companies.
The first group consist of the so-called person companies: Companies with a sole owner (‘eenmanszaak’). The owner is fully liable for debts, as well as with their private assets. Companies with several natural persons or partners involved (‘vennootschap onder firma’, or VOF).
The partners are fully liable with their business funds and private assets. Companies with a managing partner and a silent partner (‘commanditaire vennootschap’, or CV).
The managing partner is fully liable with their business funds and private assets, whereas the silent partner is only liable with company capital.
Companies as professional partnerships. Partners are natural persons executing a profession (e.g. lawyers, doctors, architects).
The partners are together fully liable for the total business debts with their private funds or assets. The second group include limited companies or a legal person or a legal entity, of which the most common are: ‘Besloten vennootschap’, or B.V. ‘Naamloze vennootschap’, or N.V.
For these companies, the (managing) directors are not liable with their private assets, unless there is documented proof of mismanagement.
1.8. Sources of information
Cosmopolite Collections work in close cooperation with experienced information agencies and a network of bailiffs to evaluate the solvency of debtors.
Using online checks with public registers, we can gather information about the financial situation of the debtor, including any officially booked goods, estates and other assets. Additional information can be obtained on shareholders, historical (financial) developments and balance sheets.
We can decide on a case-by-case basis whether to hire a private investigator. Investigating the debtor’s financial situation is useful for determining which legal action might lead to results in the end.
2. Retention of title
The Netherlands have a creditor-focused regulation on retention of title (ROT).
According to law, a creditor can appeal to the so-called ‘recht van reclame’ (the right to terminate a contract), which results in rescission of the contract with the obligation to return goods to the creditor, which is also applicable if the debtor becomes bankrupt.
To appeal this right, the creditor has only a six-week term calculated from the due date of the invoice.
The most common method is stipulating retention of title through a clause in the general purchase conditions. In order to use such a clause to the advantage of the creditor, the specific clause or general conditions must be agreed upon before or, at the latest, at the moment the contract was concluded.
The creditor should be able to produce written evidence that the conditions were handed over to the debtor, e.g. by means of a line in the order confirmation.
There are two kinds of retention of title: Basic ROT The goods supplied remain the legal property of the supplier until full payment.
The supplier can get the goods back whenever there is a payment default. Increased ROT Open account retention. In the course of on-going business relations, the supplied goods remain the legal property of the supplier until all outstanding amounts from the open account or business relations have been paid fully.
The most common method is the open account retention (increased ROT), to be stipulated by a contract or clause in applicable purchase conditions. Note that whenever a debtor is not cooperative in returning goods, it will be necessary to go to court in order to get an approval from the judge to take back the goods using a bailiff.
3. Safeguarding measures
According to Dutch law, a petition with the district court must be filed before starting legal proceedings, so it is possible to seize assets from the debtor.
The creditor is obliged to start legal proceedings within a fortnight after the date of the seizure, or it will be considered expired. Seizures will also expire if the debtor goes bankrupt.
Once the creditor has a verdict, the assets seized can be liquidated by a bailiff. During the procedure, the debtor is not allowed to do anything with the seized assets.
Preservative seizure might also be considered if it is known that a third party has to pay an amount to the debtor, and it might be possible to go over to a seizure under this third party, meaning the third party is not allowed to pay the debtor to ensure the funds are available for the creditor.
The debtor is also able to offer other means of security, such as mortgages, assignments of debts or assets, either through a contract or via a notary.
4. Legal Collections Netherlands
4.1. General information
All rules concerning commercial private law are codified in the Dutch Civil Code (‘Burgerlijk Wetboek’), whereas rules concerning procedures, courts, competencies and the likes are dealt with in the Civil Process Code (‘Wetboek van Burgerlijke Rechtsvordering’).
Entering into legal proceedings is possible without a prior formal warning to the debtor. However, all courts demand evidence that there have been pre-court efforts to try to get payments and/or to come to an amicable settlement.
During these pre-court efforts, an announcement to start legal proceedings is common and should be done.
4.2. Legal system
The judicial organisation recognise several kinds of courts, whereas competencies are related to the amount or the level of the claim.
The system includes the following courts:
- County court, one judge tribunal (‘kantongerecht’)
- Tribunal or district court (‘rechtbank’) Court of appeal (‘gerechtshof’)
- Supreme Court (‘Hoge Raad’)
For collections, it should be noted that for disputed civil claims up to EUR 25,000, Dutch legal collectors can handle the legal proceedings themselves in front of the county court. Beyond this amount, the district court is deemed as competent, and the law prescribes an obligatory legal representative or lawyer.
Cosmopolite Collections manage these procedures through our LDC network, whereas the legal team will monitor the lawyers involved.
4.3. Required documents
In order to apply the legal dunning procedure or file a petition for bankruptcy, Cosmopolite Collections need copies of the contract, invoices and a clear statement of account.
In the case of regular lawsuit procedures that are normally related to disputed cases, copies of the complete contractual documentation or proof of the trading relationship have to be supplied, such as:
-Other relevant information or evidence to rebut the dispute
-Information about the witnesses (names, residences)
-A description of the dispute
-Counterarguments from the creditor regarding the dispute.
-In case of dispute, all notes of conversations between the creditor and the debtor via letter and email that may assist our lawyers should be kept.
Every document supporting the claim or the argument to be defended has to be submitted to the court with a writ of summons, as do the names and residences of the witnesses.
4.4. Legal dunning procedure
The Netherlands do not have a legal dunning procedure, but, if the debt is undisputed, it is possible to use very specific legal action in order to press the debtor to pay on a short term.
The most effective and least costly procedure is filing a petition for bankruptcy. For this procedure, Cosmopolite Collections need to hand over the file to one of our LDCs, as it must be done by a lawyer.
The petition is designed to put so much pressure on the debtor that if there are any monies, they will be paid with preference to the creditor that filed the petition.
As an alternative, it might be possible to come to a payment plan, as this is also a very efficient action. We usually know within a month whether any monies can be collected.
4.5. Lawsuit in Netherlands
Legal proceedings in the Netherlands are always related to disputed matters.
For legal proceedings, a written approval from the client will be sufficient, so a formal power of attorney is not necessary.
Before starting legal action, our collectors investigate the debtor’s financial situation, and if it is considered that there are assets that can be taken in enforcement once a verdict has been received, the file will be handed over to one of our legal collectors.
The legal collector will then study the case, contact the client and give advice on how to act further from a legal point of view. If documents are missing or additional evidence needs to be supplied, the legal collector will ask the client to supply the relevant information.
Our legal collectors can handle the procedures for claims up to EUR 25,000, and for larger claims, the fully documented file will be sent to one of the lawyers (LDCs) in the Cosmopolite Collections’ network in the Netherlands. Once either the legal collector or LDC completes a summons, the debtor will be notified by a bailiff (obligatory) and immediately presented to the court.
In procedures before the county court, the debtor can defend themselves, whereas in procedures before the district court and beyond, the debtor must be represented by a lawyer.
Once a writ of defence has been presented, it is usual practice for the court to direct a personal appearance of all parties and their legal representatives to gather further information about the facts and to try to come to an agreement between them.
If no settlement can be concluded, the procedure will continue, usually with further written documents, witness statements, appointments of experts and the likes, until the court has a clear view on all details and can reach a final judgment.
An appeal against the judgment (the threshold is EUR 1,750) is possible, which will trigger a second verdict by the court of second instance (local court to district court, district court to court of appeal).
In case of third instance, the review will be restricted to a check of whether or not statutes were applied correctly.
Any later amendments of facts or proof are not permissible.
4.7. Debt Collection Costs Netherlands
The costs of legal proceedings are firstly related to the amount of the outstanding debt and are determined by the court, following a complex legislative tariff table using a wide range of calculations.
The losing party will be liable for court costs and a legislative fee for procedural assistance according to the tariff table.
The fee is related to the number of legal handlings in the procedures and does not take into account the real legal fees.
The way the legislative fee is calculated makes it difficult to predict the total costs, as does the complexity of the case, the number of court appearances, the eventual hearing of witnesses and the appointment of experts.
Whenever legal action is necessary, a cost estimation will be provided on a case-by-case basis.
The difference between the legislative fees determined by the court and the legal fees for LDCs and/or our legal collectors will be collected from the client’s account and cannot be recovered from the debtor.
The cost of filing a petition for bankruptcy is approximately EUR 1,350.
4.8. Expected time frame
The average duration of a regular lawsuit is dependent on what incidents might occur and can vary from about eight months, when there are no specific hearings, up to a minimum of 18 months, depending on the complexity and the hearings of all the witnesses and experts.
The availability of the judge and lawyers on all sides also has an influence on the time frame. The time frame of the outcome of filing a petition for bankruptcy is approximately eight weeks.
4.9. Interest and costs in the legal phase
Any interest calculated from the date of the writ of summons, court costs and legal fees can all be claimed as part of the outstanding monies during the legal proceedings.
In all cases, the losing party has to bear the costs of the legal proceedings. If a claim is granted for part of the claim, the court can decide that both parties have to bear costs in proportion to their prevailing or failing in the case.
In the case of a legal settlement, it is common that the parties bear their own costs (e.g. lawyers and court fees) of the proceedings.
5.1. Enforcement in debt
In the Netherlands, only a bailiff is authorised to take care of the enforcement of judgments, within the boundaries of the law.
Cosmopolite Collections have a network of professional and experienced bailiffs covering the whole country.
Based on a judgment, a bailiff can seize part of the debtor’s salary, block the bank account of the debtor or their claims against tax offices, life insurances and shares in a business, corporate shares or any possible claims the debtor may have against any third party.
Very specific information, such as bank account details, the name and address of the employer and any information about the corporate shares or shares in businesses, is required for this kind of enforcement.
5.2. Enforcement in movable property
This is the standard procedure where the bailiff visits the debtor to take away movable property that can be liquidated in favour of the creditor.
The bailiff cannot seize the property necessary for the debtor’s basic daily life or that enables them to maintain their business activity.
5.3. Enforcement in immovable property
If the debtor owns real estate, it is possible to receive a record of the claim in the land register and to then force the attachment, the attachment and sale or, in case there are tenants, the sequestration of the real estate by court order.
All of these processes are more expensive than those mentioned previously, and it can be a long process to get a copy of the record.
Afterwards, it can also take time to sell or sequestrate the land and real estate.
5.4. Expected time frame
Enforcement in monies is usually time-consuming. In order to receive monies, it is often necessary to agree on longterm payment plans.
An alternative may be selling property, which may not always lead to a net result. An attachment of salary may result in small instalments of funds, and the total time frame of enforcement can fluctuate from three to 24 months.
6. Insolvency proceedings
6.1. General information
All debtors can be declared bankrupt at their own request or at the request of just one creditor, provided that evidence is supplied to the court that more than one debt is left unpaid by the debtor. Insolvency proceedings – whether regular insolvency, insolvency plan or individual insolvency – are a kind of collective enforcement by all the creditors to one debtor.
With a verdict of the court, the bankruptcy is established with the result that all proceedings and enforcement (also from a preservative kind) will be suspended.
The aim of the insolvency proceedings is to pay out all creditors with the same percentage of the debt by liquidating the assets of the debtor company or by collecting the enforceable income of the individual who is declared bankrupt.
Besides bankruptcy, there are two other types of insolvency: Suspension of payment
Companies and/or natural persons, who are temporarily in a position where they are not able to pay their debts, might file a petition for suspension of payment.
The court often allows provisional suspension for a certain period (two to six months), after which the debtors have to submit all records about their financial situation, as well as a plan towards the future and how they will meet obligations towards the creditors.
Law-enforced composition with creditors for natural persons’ debts (WSNP) This insolvency procedure is related to natural persons (owners of small shops, farmers and the likes) who are personally liable for debts.
Dutch law provides such debtors with the possibility to request to the court that they be allowed to enter a WSNP.
Fulfilling certain obligations towards good faith, the court can allow such debtors to enter a WSNP by appointing a type of official receivers, who is monitored by a member of the court.
The court that declared the debtor bankrupt will appoint an official receiver, as well as a member of the court who will monitor the official receiver.
The official receiver will act on behalf of the creditors and can implement several (business) actions, with the approval of the member of the court, to liquidate the assets in favour of the creditors.
All the creditors must lodge their claims with the official receiver and take back any goods delivered under retention of title. For goods in stock, the official receiver can choose whether to pay the original price to the creditors or to return the goods.
In case the goods will be returned, there might be a request to pay an insolvency contribution, varying from 4% to 9% of the invoiced value.
This contribution has been sanctioned in jurisprudence but has to be deemed as reasonable. There is no specific deadline for lodging claims, but it is advised that the creditors do so as soon as possible to prevent goods delivered with retention from being liquidated. All claims lodged are checked by the official receiver and, if agreed, are placed on a list of recognised creditors.
The official receiver may dispute a claim and a specific procedure might follow, but this depends on whether there are any dividends for creditors to be expected.
At the end of the proceedings, the official receiver will inform the court about the settlement or ending of the bankruptcy.
Most insolvencies are ended without any dividend for non-privileged creditors. If there is a dividend available, it will usually be a small percentage of the debts varying from 1% to 20% of the original claim.
Suspension of payment Like in bankruptcy, the creditors have to lodge their claims with the official receiver. If it is judged that there is the possibility of achieving a positive outcome in the future, including a payment plan for the debts, the suspension will become definitive.
It is also possible to come to an agreement with the creditors, which then has to be approved by the majority of the creditors for each debt and the court. With a payment plan approved by the court or a composition, the suspension will end. However, often suspension becomes bankruptcy.
Law-enforced composition with creditors for natural persons’ debts (WSNP) The creditors have to lodge their claims as described above.
The official receiver has to determine in which capacity the debtor has to pay instalments for a period of three years.
After this period and provided that the debtor meets their obligations as agreed with the official receiver, the total reserved amount will be divided amongst the creditors in a full and final settlement. It should be noted that if a natural person has been declared bankrupt, it often comes – on request from the debtor – to a transfer to the WSNP.
Most of the time, the creditors will receive only a small percentage of their debts (varying from 1% to 10%).
6.3. Required documents
In order to lodge a claim on behalf of our client, Cosmopolite Collections do not need an official or an original power of attorney, but what is required is:
- Copies of invoices
- Copies of contracts
- Order confirmations and delivery notes
- Copies of general conditions of sales.
6.4. Expected time frame and outcome
In the Netherlands, there is no specific deadline for lodging claims, but it is advised to act as soon as possible on acknowledgement of any insolvencies.
A bankruptcy procedure normally lasts between one and five years, depending on the size of the insolvent company and the quantity of assets to be liquidated.
The duration of suspension of payment also depends on several factors, such as the economic outlook, and usually lasts between two and 24 months.
The total time frame of a law-enforced composition with creditors for natural persons’ debts is normally three years.
6.5. Limited companies
The main reason for filing a petition for bankruptcy at the debtor’s request or at the request of the creditors is the debtor’s inability to pay, which is supposed to be the case when at least two debts (of a reasonable amount) remain unpaid.
Filing a petition for bankruptcy at the request of a creditor is normally an efficient action to get payment.
6.6. Unlimited companies / individuals
For unlimited companies with personally liable partners or individual debtors, it is not common for them to request bankruptcy themselves.
Filing a petition for bankruptcy against these debtors at the request of the creditors is merely used as an efficient collection tool.
6.7. Pool of creditors
In the Netherlands, there is no legislation towards pools of creditors.
In practice, however, such pools exist on a voluntary basis, especially when a bigger company goes bankrupt.
A pool of creditors is mainly founded by credit insurance companies and/or the largest creditors, with the aim of accumulating all claims of the creditors who delivered goods under the retention of title clause and instructing official receivers to take appropriate legal action against managing directors if there are grounds for mismanagement.
The official receiver can dispute any juridical act by the debtor carried out one year before the date of the insolvency on a voluntary basis, and from which the debtor knew or had to know that this would damage the position of the creditors.
It is assumed that the debtor has this knowledge if the legal act was executed one year before the date of the insolvency. If the liquidator disputes these legal acts, which include payments, the creditors have to indemnify the official receiver or refund the payments.
The creditors can only lodge the corresponding claims or debts instead.
If a creditor receives payment the moment they know that a petition for bankruptcy was already filed against the debtor, the creditor is obliged to refund the monies at the request of the liquidator.
7. Arbitration and Mediation
If the creditor and the debtor agree on an alternative disputesolution, there are two options: arbitration and mediation or conciliation.
Agreeing to a private arbitral tribunal has advantages compared to a regular legal proceeding:It is quicker, as the courts are less occupied and there areusually no appealsGenerally more cost-efficient Expertise for certain branches (e.g. contracting,engineering, graphical industry, metal industry).
An informal way of fact finding, where processes and hearings are confidential . There is no obligation to be represented by a lawyer (the legal collectors from Cosmopolite Collections can handle arbitration procedures regardless of the outstanding amount).H
owever, agreeing to arbitration also means exclusion of the jurisdiction of the ordinary courts. The second way of solving a dispute is by mediation or conciliation proceedings, which focus on finding the root cause of the dispute in order to find constructive agreements and solutions for both the creditorand the debtor.
Mediation or conciliations are carried out byprofessional organisations like the Chambers of Industry and Commerce or by professional mediators.
There are now increasingly more attorneys who specialise in mediation. Also, the legal collectors from Cosmopolite Collections often act as mediators to try to solve the dispute and create a solutionor a settlement.
The new agreement is not a judgment, but a kind of contracts.