Case Study: Debt recovery in Europe

Recovering a commercial debt in Europe is achievable, but the path depends heavily on jurisdiction, debtor behaviour, and the value at stake. Creditors who act within the first 90 days of default recover significantly more than those who delay. This article walks through the legal tools available across major European jurisdictions, the procedural mechanics of cross-border enforcement, common strategic mistakes, and the practical economics of each route - giving international business owners a clear map before they commit resources.

Debt recovery in Europe is not a single process. It is a layered system of national procedures, EU-level instruments, and bilateral enforcement mechanisms that interact differently depending on where the creditor is based, where the debtor is domiciled, and where the debtor';s assets are located.

The starting point for any cross-border claim is Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I Recast). This regulation determines which court has jurisdiction and makes a judgment obtained in one EU member state directly enforceable in another without a separate exequatur procedure. For creditors based outside the EU, the picture is more complex: enforcement depends on bilateral treaties or national rules of the debtor';s country.

The European Payment Order (EPO) procedure, established under Regulation (EC) No 1896/2006, offers a fast-track option for uncontested cross-border monetary claims within the EU. A creditor files a standardised application with the competent court, and if the debtor does not oppose within 30 days of service, the order becomes enforceable across all EU member states. The EPO is cost-effective for straightforward claims but collapses into ordinary national proceedings the moment the debtor files opposition.

The European Small Claims Procedure (ESCP), governed by Regulation (EC) No 861/2007, covers claims up to EUR 5,000 and is designed to reduce the cost of cross-border litigation for smaller disputes. It operates largely on paper, without oral hearings, and produces a judgment enforceable throughout the EU.

Understanding which instrument applies - and which court to file in - is the first strategic decision a creditor must make. A common mistake is filing in the creditor';s home jurisdiction simply because it is convenient, only to discover that enforcement in the debtor';s country requires additional steps that could have been avoided by filing there from the outset.

The choice of forum in European debt recovery is both a legal and a commercial decision. Brussels I Recast provides the default rules: a defendant domiciled in an EU member state is generally sued in the courts of that member state. However, the regulation allows parties to agree on jurisdiction through a valid choice-of-court clause under Article 25. If the contract contains such a clause, the designated court has exclusive jurisdiction, and other courts must decline.

In practice, many commercial contracts between European parties contain jurisdiction clauses pointing to English courts, German courts, or arbitral tribunals. Post-Brexit, English court judgments are no longer automatically enforceable under Brussels I Recast in EU member states. Enforcement of English judgments in the EU now depends on national rules of each member state - a non-obvious risk that has caught several international creditors off guard since 2021.

For contracts without a jurisdiction clause, the creditor can choose between the debtor';s domicile (Article 4 of Brussels I Recast) and the place of performance of the obligation in question (Article 7(1)). For a sale of goods, the place of delivery is typically the place of performance. For services, it is where the services were provided. This distinction matters because filing in the wrong jurisdiction can lead to a jurisdictional challenge that delays proceedings by months.

Pre-trial procedures vary by country. Germany requires no mandatory pre-litigation mediation for most commercial claims, but courts expect a formal demand letter (Mahnung) before proceedings. France has introduced mandatory pre-litigation conciliation for certain disputes under the Civil Procedure Code. The Netherlands requires a summons (dagvaarding) served by a bailiff before proceedings can commence. Skipping these steps does not always invalidate the claim, but it can affect costs awards and judicial attitude.

Electronic filing is available in Germany through the beA (besonderes elektronisches Anwaltspostfach) system, in France through the e-Barreau platform, and in the Netherlands through Mijn Rechtspraak. In jurisdictions where electronic filing is mandatory for legal representatives, submitting paper documents can result in procedural rejection.

To receive a checklist on pre-litigation steps for debt recovery in Europe, send a request to info@vlolawfirm.com.

German debt recovery for uncontested claims typically begins with the Mahnverfahren (court order for payment procedure), governed by sections 688-703d of the Zivilprozessordnung (ZPO, Code of Civil Procedure). The creditor files an application with the centralised Mahngericht (order court), which issues a Mahnbescheid (payment order) without examining the merits. The debtor has two weeks to oppose. If no opposition is filed, the creditor requests an enforcement order (Vollstreckungsbescheid), which becomes a full enforcement title.

The entire Mahnverfahren can be completed in four to eight weeks for uncontested claims. Court fees are modest and calculated on the claim value. If the debtor opposes, the matter is transferred to the competent district court (Amtsgericht for claims up to EUR 5,000, Landgericht for higher amounts) and proceeds as ordinary litigation.

For contested claims, German courts are thorough and relatively slow. A first-instance judgment at the Landgericht typically takes 12 to 24 months. Appeals to the Oberlandesgericht (regional court of appeal) add another 12 to 18 months. Lawyers'; fees in Germany are regulated by the Rechtsanwaltsvergütungsgesetz (RVG, Lawyers'; Remuneration Act) and are calculated on the value in dispute (Streitwert). For a EUR 100,000 claim, total legal costs at first instance typically start from the low tens of thousands of euros.

French commercial debt recovery for B2B claims proceeds before the Tribunal de commerce (commercial court), composed of elected judges who are themselves business people. The procedure is governed by the Code de procédure civile (Civil Procedure Code). For uncontested claims, the injonction de payer (payment injunction) under Articles 1405-1424 of the Civil Procedure Code offers a fast-track route: the creditor files a petition, the judge issues an order without hearing the debtor, and the debtor has one month to oppose.

If the debtor opposes, the matter proceeds to ordinary commercial litigation. French commercial courts are generally faster than civil courts, with first-instance judgments often delivered within 12 to 18 months in major commercial centres. Provisional enforcement (exécution provisoire) is now the default under the 2019 reform of civil procedure, meaning a first-instance judgment is enforceable immediately even if appealed.

A non-obvious risk in France is the prescription period. Under Article 2224 of the Code civil (Civil Code), the general limitation period for commercial claims is five years from the date the creditor knew or should have known of the debt. However, certain sector-specific rules shorten this period. Missing the limitation deadline extinguishes the claim entirely.

Dutch debt recovery is governed by the Wetboek van Burgerlijke Rechtsvordering (Code of Civil Procedure). For uncontested claims, the kort geding (summary proceedings) before the voorzieningenrechter (judge in preliminary relief proceedings) can produce an enforceable order within weeks. This procedure is designed for urgent matters but is widely used in commercial debt recovery when speed is essential and the claim is straightforward.

For contested claims, ordinary proceedings (bodemprocedure) before the Rechtbank (district court) apply. Dutch courts are efficient by European standards, with first-instance judgments typically delivered within 12 to 18 months. The Netherlands also has a strong tradition of commercial mediation, and courts actively encourage parties to attempt settlement before or during proceedings.

Polish debt recovery uses the nakazowe postępowanie (order for payment procedure) under Articles 480-497 of the Kodeks postępowania cywilnego (Code of Civil Procedure). The court issues a nakaz zapłaty (payment order) based on documentary evidence without hearing the debtor. The debtor has two weeks to file a sprzeciw (objection). If no objection is filed, the order is enforceable.

Polish courts have faced backlogs in recent years, and contested commercial litigation at first instance can take 18 to 36 months in major cities. However, enforcement of judgments through a komornik sądowy (court bailiff) is generally effective once a title is obtained.

Spanish debt recovery for uncontested claims uses the proceso monitorio (monitorio procedure) under Articles 812-818 of the Ley de Enjuiciamiento Civil (Civil Procedure Act). The creditor presents documentary evidence of the debt; the court notifies the debtor, who has 20 days to pay or oppose. If no opposition is filed, the court issues an enforcement order directly. The proceso monitorio has no upper limit on claim value, making it one of the most powerful fast-track tools in Europe.

For contested claims, ordinary proceedings before the Juzgado de lo Mercantil (commercial court) apply for commercial matters. Spanish courts are slower than their German or Dutch counterparts, with first-instance judgments often taking two to three years in major jurisdictions.

Obtaining a judgment is only half the battle. Enforcement - actually recovering the money - requires a separate set of steps that many creditors underestimate.

Within the EU, Brussels I Recast (Regulation 1215/2012) allows a judgment creditor to enforce directly in another member state by presenting the judgment and a standard certificate (Form I of Annex I to the Regulation) to the enforcement authority of the member state where enforcement is sought. No separate recognition procedure is required. The enforcement authority applies the procedural law of its own state to execute the judgment.

The European Account Preservation Order (EAPO), established under Regulation (EU) No 655/2014, is a powerful tool for freezing bank accounts across EU member states before or after judgment. A creditor can apply for an EAPO without notifying the debtor (ex parte), preventing asset dissipation. The order freezes the amount claimed in any bank account the debtor holds in a participating EU member state. The creditor must then commence or continue main proceedings within 30 days of the EAPO being served.

In practice, it is important to consider that the EAPO requires the creditor to identify the bank or at least the member state where the debtor holds accounts. Courts in some member states have information-gathering mechanisms to assist with this, but the process adds time and cost. The EAPO is most effective when the creditor already has intelligence on the debtor';s banking relationships.

For enforcement against debtors in non-EU countries - Switzerland, the United Kingdom, or Turkey, for example - the creditor must rely on bilateral treaties or national rules. Switzerland has a bilateral treaty with most EU member states for recognition of judgments, but the process requires a separate recognition application before Swiss courts under the Lugano Convention. The United Kingdom, post-Brexit, has no general treaty with the EU for mutual enforcement; recognition of EU judgments in England depends on common law rules, which require fresh proceedings in most cases.

A common mistake by international creditors is assuming that a German or French judgment can be enforced in Switzerland or the UK without additional legal work. The cost of that additional work - typically starting from the low thousands of euros per jurisdiction - must be factored into the decision of where to litigate in the first place.

To receive a checklist on cross-border enforcement of judgments in Europe, send a request to info@vlolawfirm.com.

A Dutch trading company supplies goods to a German distributor. The distributor fails to pay an EUR 80,000 invoice. The contract contains no jurisdiction clause. The Dutch seller has two realistic options: file in the Netherlands (debtor';s domicile is Germany, but the place of delivery was Rotterdam, giving Dutch courts jurisdiction under Article 7(1) of Brussels I Recast) or file in Germany.

Filing in Germany has a practical advantage: enforcement will be faster and cheaper because no cross-border recognition step is needed. The seller instructs German counsel to initiate the Mahnverfahren. The debtor does not oppose within two weeks. An enforcement order is issued. The seller then instructs a German Gerichtsvollzieher (court enforcement officer) to levy on the debtor';s bank accounts and receivables. Total elapsed time from filing to enforcement: approximately 10 to 14 weeks. Legal costs at this stage: starting from the low thousands of euros.

If the debtor had opposed, the matter would have transferred to the Landgericht, and the timeline would have extended to 18 to 24 months for a first-instance judgment. The seller would need to assess whether the debtor';s financial position justifies that investment.

A French consulting firm provides services to a Spanish company under a contract with a Paris jurisdiction clause. The Spanish client disputes the quality of services and refuses to pay EUR 500,000. The French firm files before the Tribunal de commerce de Paris.

The Spanish client challenges jurisdiction, arguing the services were performed in Spain. The Paris court upholds the jurisdiction clause under Article 25 of Brussels I Recast and proceeds to the merits. The French firm obtains a first-instance judgment with provisional enforcement after 16 months. It immediately applies for enforcement in Spain using the Brussels I Recast certificate.

The Spanish enforcement court (Juzgado de Primera Instancia) receives the application and appoints a procurador (court representative) to serve the enforcement order on the debtor. The debtor challenges enforcement on procedural grounds, adding three to four months. Assets are eventually frozen. Total elapsed time from filing to asset freeze in Spain: approximately 24 to 28 months. Legal costs across both jurisdictions: starting from the mid-tens of thousands of euros.

The lesson from this scenario is that a jurisdiction clause in favour of the creditor';s home court does not eliminate enforcement complexity in the debtor';s country. When the debtor';s assets are entirely in Spain, filing in Spain from the outset - despite the inconvenience - would have been faster and cheaper.

A Polish manufacturer supplies components to a Czech buyer. The buyer fails to pay EUR 15,000. No jurisdiction clause exists. The Polish supplier considers the European Payment Order procedure as a cost-effective cross-border tool.

The supplier files an EPO application with the Polish court (place of performance: Poland). The court issues the order. The Czech buyer does not oppose within 30 days. The EPO becomes enforceable in the Czech Republic without any additional recognition procedure. The supplier presents the EPO and the standard certificate to the Czech enforcement authority, which appoints a soudní exekutor (court executor) to recover the funds.

Total elapsed time: approximately eight to twelve weeks. Legal costs: starting from the low thousands of euros. This scenario illustrates the EPO';s value for straightforward, uncontested cross-border claims of modest value. Had the buyer opposed, the matter would have reverted to Polish national proceedings, and the cost-benefit calculation would have shifted significantly.

The decision to litigate a European debt claim must be grounded in a clear-eyed assessment of four variables: the probability of success on the merits, the debtor';s ability to pay, the cost of proceedings, and the time value of money. A creditor with a strong legal position but a debtor in financial distress may recover more through a negotiated settlement or a structured payment plan than through years of litigation followed by insolvency proceedings.

Many underappreciate the interaction between debt recovery and insolvency. If the debtor is already insolvent or approaching insolvency, a judgment obtained through ordinary litigation may be worthless if the debtor files for protection before enforcement is complete. In that scenario, the creditor becomes an unsecured creditor in insolvency proceedings, subject to the waterfall of priorities under the applicable national insolvency law. Acting quickly - within the first 60 to 90 days of default - maximises the creditor';s options, including the possibility of obtaining a prejudgment attachment or EAPO before other creditors move.

The risk of inaction is concrete: in most European jurisdictions, a creditor who waits more than 12 months after default without taking formal steps loses negotiating leverage, may face limitation arguments, and allows the debtor time to restructure assets or transfer them to related parties. Article 423 of the French Civil Code and equivalent provisions in German law (Anfechtungsgesetz, Act on Avoidance of Transactions) allow creditors to challenge fraudulent asset transfers, but these actions are complex and expensive.

A common mistake is relying on a contract governed by English law while the debtor';s assets are in France or Germany. English governing law does not give English courts jurisdiction under Brussels I Recast; jurisdiction depends on the domicile of the defendant or a valid jurisdiction clause. A creditor who files in England expecting to enforce easily in France will face the post-Brexit enforcement gap described above.

Another frequent error is underestimating translation requirements. Most European enforcement authorities require certified translations of foreign judgments and supporting documents. Translation costs for a complex commercial judgment can start from several thousand euros and add weeks to the enforcement timeline.

A non-obvious risk is the interaction between debt recovery and data protection law. Regulation (EU) 2016/679 (GDPR) imposes restrictions on the processing of personal data in the context of debt collection, particularly when using third-party debt collectors or sharing debtor information across borders. Non-compliance can expose the creditor to regulatory action in addition to the underlying dispute.

Legal costs in European debt recovery vary widely. In Germany, fees are regulated by the RVG and are predictable. In France, the Netherlands, and Spain, fees are freely negotiated, and hourly rates for commercial litigation specialists start from the low hundreds of euros. For a EUR 100,000 claim, total legal costs across first instance and enforcement in a single jurisdiction typically start from the low tens of thousands of euros. For cross-border matters involving two or more jurisdictions, costs can double.

The cost of non-specialist mistakes is higher. A creditor who files in the wrong jurisdiction, misses a procedural deadline, or fails to serve documents correctly may lose months and incur wasted costs before the error is corrected. In some jurisdictions, a procedural defect at the enforcement stage can require the creditor to restart the enforcement process entirely.

The business economics of the decision are straightforward: for claims above EUR 50,000, professional legal representation across the relevant jurisdictions is almost always cost-justified. For claims between EUR 10,000 and EUR 50,000, the EPO or national fast-track procedures offer a proportionate route. For claims below EUR 5,000, the ESCP is the most efficient tool.

To receive a checklist on selecting the right debt recovery procedure in Europe for your specific claim, send a request to info@vlolawfirm.com.

What is the biggest practical risk when recovering a debt from a European debtor?

The biggest practical risk is obtaining a judgment that cannot be enforced because the debtor has dissipated assets or entered insolvency by the time enforcement is attempted. Creditors should assess the debtor';s financial position before committing to litigation and consider applying for a European Account Preservation Order or national prejudgment attachment at the earliest possible stage. Acting within the first 90 days of default gives the creditor the widest range of options. Waiting beyond 12 months significantly narrows those options and may trigger limitation arguments in some jurisdictions.

How long does cross-border debt recovery in Europe typically take, and what does it cost?

For uncontested claims using the European Payment Order or national fast-track procedures, the process from filing to enforcement title typically takes eight to sixteen weeks. For contested commercial litigation, first-instance judgments take 12 to 36 months depending on the jurisdiction, with enforcement adding further time. Legal costs for a single-jurisdiction contested claim of EUR 100,000 typically start from the low tens of thousands of euros. Cross-border matters involving enforcement in a second EU member state add translation costs, local representation fees, and procedural delays that can increase total costs by 30 to 50 percent.

Should a creditor litigate in its home country or in the debtor';s country?

The answer depends on where the debtor';s assets are located. If all assets are in the debtor';s country, filing there from the outset avoids the cross-border enforcement step and is usually faster and cheaper. If the contract contains a valid jurisdiction clause in favour of the creditor';s home court, that clause is enforceable within the EU under Brussels I Recast, but enforcement of the resulting judgment in the debtor';s country still requires following that country';s enforcement procedures. For post-Brexit UK creditors, filing in the debtor';s EU country is often the more practical choice given the absence of a general mutual enforcement treaty.

European debt recovery rewards creditors who act early, choose the right procedural tool, and plan enforcement before filing. The EU';s harmonised instruments - Brussels I Recast, the European Payment Order, and the European Account Preservation Order - provide powerful cross-border mechanisms, but they operate within national procedural frameworks that vary significantly. Understanding those variations, and matching strategy to the specific debtor, claim value, and asset location, is the difference between recovering a debt and writing it off.

Our law firm VLO Law Firms has experience supporting clients across European jurisdictions on commercial debt recovery matters. We can assist with jurisdiction analysis, pre-litigation strategy, filing under EU fast-track procedures, cross-border enforcement, and coordination with local counsel in debtor countries. To receive a consultation, contact: info@vlolawfirm.com.