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A five step process to succesful DEBT COLLECTION in France : words of advice from a french DEBT COLLECTION attorney

Welink Legal

Welink Legal

Article written by Baptiste Robelin


The ongoing covid-19 crisis continues to generate confusion and uncertainty throughout the business world. Business-to-business debts (b2b), a leading source of funding for a large majority of French SMEs, has taken a toll throughout these past couple of years. However, debt collection laws and procedure in France are far from inefficient. If you are an international creditor seeking repayment from your French debtor, you maintain a number of options for successful debt collection. Hiring a debt collection attorney is a first step towards ensuring you recover the amounts due. French lawyers and agencies will provide you with rapid service due to their familiarity with the country’s system of civil litigation. 


Successful debt collection in France starts off with an initial attempt at an amicable settlement of disputes. A debt collection lawyer should ensure that you have fulfilled all possible steps towards avoiding legal action and the involvement of the Courts. 


As an international creditor there are five basic steps to ensuring a successful recovery of your unpaid debts in France: 



1. Send a formal demand letter (« lettre de mise en demeure ») to your debtor


In France, the formal demand letter serves to signal to your debtor that you are willing and prepared to take legal action against them is they do not pay their debts. It also marks the official date as of which they are to be held legally overdue. 



2. Contact your defaulting debtor directly 

This next step should be executed by your debt collection attorney. By hiring a third-party actor, the interpersonal ties amongst parties will be eliminated. This simplifies the procedure and allows for an efficient resolution of the debt collection dispute. 

Your lawyer will typically seek to establish direct contact with your debtor in order to come up with an alternative solution to litigation. 



3. File for an Interim Injunction Order (“saisie conservatoire”) 


The final step before litigation is filing for an interim injunction order. This allows the creditor to have a guarantee on the sums they are owed. Your debt collection attorney can file with the Courts a request for the provisional freezing of your debtors relevant assets while the creditor awaits the trial’s ultimate judgement. This is done so as to protect the weary creditor from the debtor entering into a re-organization of assets or insolvency proceedings. The creditor is therefore reasonably protected for 30-days before the starts of the legal proceedings. 


Under French debt collection laws, if you have doubts surrounding your debtor’s solvency you may want to consider filing for an interim injunction order. 



4. Evaluate your options for civil litigation 


Pursuing legal action is almost always costly. However, under French debt collection laws the proceedings progressively escalate in their expenses. The different options open to you when looking to enter into judicial proceedings are therefore the following: 


  • 4.1: File for an Order for Payment Proceedings (“Ordonnance d’Injonction de Payer”) 


Filing for an Order for Payment may be the cheapest option available to you as an international creditor in France. It is a simple procedure that allows the judge to declare an immediate repayment of your debts by your defaulting debtor. This otherwise profitable measure is however, applicable only in cases wherein the claim is uncontested. 

Since this is rarely the case in a debt collection dispute, there are prominent alternatives such as opening summary or ordinary civil proceedings. 


  • 4.2: File for an European Order for Payment Proceedings (“L’Ordonnance d’Injonction de Payer Européenne”)


Before we get that however, we remind our readers of the EU-level measure created in the 2006 EU Regulation (EC) No 1896/2006 – creating A European Order for Payment Procedure. The European Order for Payment (EOP) allows for an efficient and standardized method for cross-border debt collection claims. Through the simple filing out of Standard Form A, the plaintiff is able to request an Order for Payment from the Competent Courts. The delays are brief, with a 30-day timeframe, and the Orders are enforceable across member states (with the noted exception of Denmark). This cost-efficient option is limited by the same conditions as that of the national level Order for Payment – the claim must be uncontested. The debtor has a 30-day window to challenge the Order. Following this the Order is automatically enforceable. 


  • 4.3: Open Summary Proceedings (“Procedure de référé”)


If your claim is challenged by your debtor, you will be brought to open judicial proceedings. In France, summary proceedings are a significant piece of the legal puzzle. They grant plaintiffs an expedited decision process by bypassing the traditionally lengthy process of ordinary civil proceedings. 


Opening summary proceedings is typically done in large and contentious claims. The Court will grant an expedited decision. This significantly increases your chances of recovering your claims as it limits the time your debtor has to reorganize their finances and open insolvency proceedings. 


However, summary proceedings have three rather strict conditions for their application: the issue at hand must have (1) an element of urgency; be either (2) without valid challenge or (3) justifiable with the Courts through the existence of a dispute. The appreciation of these conditions are left to the Competent Courts. 

  • 4.4: Open Ordinary Civil Proceedings (“Procédure au fond”) 


If your claim is neither uncontested nor urgent, your debt collection lawyer will be brought to advise you to open a case for Ordinary Civil Proceedings. In such proceedings the judge is meant to rule on both legal and procedures elements of your case. It is understood as being a more complex measure than the above mentioned and is most often successful in cases where the existence of the debt itself is challenged. 



5. The final step… Recovering your money 


Successful debt collection proceedings for international creditors in France are likely to be achieved by following this quick and easy five-step process. However, a favourable judgement is not sufficient to recovering your unpaid dues. In France, hiring a bailiff is widely practiced in order to ensure the proper payment of the debtor’s assets.  


By Baptiste Robelin, in collaboration with Morgane Briere





About the author : Baptiste Robelin regularly advises on commercial leases and business transfers. Partner of NovLaw Avocats, you can find all his news on his website.


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