How to Collect a Debt from a Company: A Creditor's Playbook
To collect a B2B commercial debt from a company, follow seven sequential steps: verify the debt is valid and within the limitation period; check the debtor’s commercial registry status for insolvency risk; send a formal written demand in the debtor’s legal language via the correct statutory channel; evaluate the response; instruct a licensed local collection agency or counsel at day 60 to 75 of non-payment; file a payment order or civil action if amicable recovery fails; and enforce the judgment through a local bailiff. The critical threshold is day 60: recovery probability declines at 3 to 4 percentage points per month past this point, and internal AR efforts after day 60 consistently produce lower yields than external professional collection on the same file. Approximately 70 to 80% of undisputed B2B commercial files placed with a professional agency within 90 days resolve amicably — without court proceedings.
You shipped EUR 220,000 in machine parts to a buyer in Frankfurt. The invoice was due 120 days ago. Your CFO has sent three reminders. The sales rep who closed the deal has moved on, and no one internally knows exactly what documentation was exchanged at contract stage. Finance is asking whether to write it off or pursue. What this article maps is the exact sequence of decisions between now and recovered funds — starting with the step that determines whether the file is worth pursuing at all.
How do you collect a debt from a company?
The process is a sequence, not a single action. Skipping steps almost always costs money later — in legal fees on uncollectable files, in agency commissions on documentation-deficient cases, or in missed limitation deadlines that render the entire claim unenforceable. Here are the seven steps in order.
Step 1: Verify the debt is real and collectible. Confirm the invoice is valid. Was the contract executed in writing. Was delivery accepted without written objection. Does the claim sit within the limitation period of the debtor’s jurisdiction — 3 years in Germany (§195 BGB, Jahresultimo), 5 years in Spain (Art.1964 CC), 5 years in France (Art.2224 Code civil), 6 years in England (§5 Limitation Act 1980), 10 years in Italy (Art.2946 c.c.), 2 years in Canada (Ontario Limitations Act 2002).
Step 2: Check the debtor’s commercial registry status. Five minutes on the relevant national registry can reveal that the company is already in insolvency — before you spend money on collection. Companies House (UK), Handelsregister (Germany), INSEE/Infogreffe (France), KRS (Poland), Registro delle Imprese (Italy), Registro Mercantil (Spain), Registrul Comerțului (Romania). An insolvent debtor is a creditor’s nightmare handled through a completely different process.
What is the correct demand channel for each jurisdiction?
Step 3: Send a formal written demand in the debtor’s local language via the correct channel. In Spain: burofax via Correos (the only instrument that both interrupts the Art.1964 limitation and creates court-admissible evidence simultaneously). In Italy: raccomandata con ricevuta di ritorno or PEC (certified electronic mail). In France: lettre recommandée avec accusé de réception (LRAR). In Germany: registered post with return receipt (Einschreiben mit Rückschein). In the UAE: Arabic-language formal demand letter via registered post or notary. The demand must cite: the invoice amounts and due dates; the applicable statutory interest rate; and the fixed recovery compensation (EUR 40 per invoice under EU Directive 2011/7/EU for intra-EU B2B debts).
Step 4: Evaluate the response. Payment resolves the file. A denial of liability requires legal review of the documentation before escalation. Silence is the most common response to an initial formal demand and signals either deliberate deferral or deteriorating solvency. A partial payment requires written reservation of rights before banking — accepting a partial payment without reservation can be construed as acceptance of the partial amount as full settlement in some jurisdictions.
When should you instruct an external collection agency?
Step 5: Instruct a licensed local collection agency or counsel at day 60 to 75. The optimal referral point is when: the internal demand has been sent and the response has been silence or inadequate; the debt is at or approaching 60 days past due; and the file has clear documentary support (signed contract, delivery confirmation, and unambiguous invoices). At this point the statistical case for external professional collection is compelling: external agencies recover 50 to 70% of 90-day debts versus 20 to 30% internal recovery on the same vintage. The 3 to 4 percentage point monthly decay means that a file placed at day 90 is materially harder to recover than the same file placed at day 60.
Step 6: File a payment order or civil action. If the amicable phase (typically 30 to 45 days of professional collection contact) does not produce payment, the file proceeds to judicial escalation. The correct procedure is jurisdiction-specific: Mahnverfahren in Germany (ZPO §§688-703d, 4 to 6 weeks uncontested); decreto ingiuntivo in Italy (CPC Arts.633-656, 30 to 60 days); proceso monitorio in Spain (LEC Arts.812-818, no ceiling, 20-day response window); injonction de payer in France (CPC Arts.1405-1425); European Order for Payment across the EU (Reg.1896/2006, no ceiling, 30-day opposition window); Article 62 payment order in Dubai (Decree-Law 42/2022); statutory demand in England (Insolvency Act 1986 §123, for uncontested claims ≥ £750).
Step 7: Enforce the judgment. Once an enforceable title exists — an uncontested payment order or a court judgment — the local bailiff executes against identified assets. The fastest enforcement tool in almost every jurisdiction is bank account attachment: German Pfändungs- und Überweisungsbeschluss, Spanish embargo via Punto Neutro Judicial, Italian pignoramento presso terzi, French saisie-attribution. All of these freeze funds at the debtor’s bank within days of the bailiff receiving the enforcement order — often without prior notice to the debtor.
You know the debt is real. What you need now is someone on the ground in the right jurisdiction who can make it cost the debtor more to ignore it than to pay it. Contact Cosmopolite for a free case assessment. No win, no fee.
