For entrepreneurs, the recovery of receivables serves as an important tool for managing their cash flow. Swift recovery of overdue receivables at a minimal cost is therefore key.
Prior to 19 October 2015, entrepreneurs faced with non-payment of overdue receivables, had, in the end, no other option than to introduce costly and time-consuming debt recovery proceedings before Belgian courts.
The Belgian legislator has tried to remedy this situation by introducing a new out-of-court procedure relating to the recovery of undisputed but overdue receivables.
To the benefit of the creditor, this out-of-court procedure is available to all creditors that qualify as professional merchants, regardless of the amount of the receivables, including accrued interests and compensation amounts (limited to ten percent of the principal amount).
The launch of the procedure itself is relatively simple: a bailiff, upon instruction of the creditor’s attorney, must provide the debtor with a written notice requesting payment of the overdue receivable within one month. A response form is to be attached to this notice, and allows the debtor to subsequently clarify whether it (i) accepts payment of the outstanding receivable, (ii) asks for payment facilities, or (iii) disputes the overdue receivable. Any dispute of the receivable must duly be motivated. A simple ‘no’ shall not be sufficient and shall be deemed equal to acknowledgement of the receivable. In case of a motived dispute, the procedure ends. The creditor can than still decide to initiate regular recovery proceedings before the Belgian courts.
The absence of a timely reply (i.e. within one month and eight days), or a non-motivated reply by the debtor, will lead to the confirmation by the bailiff that the receivable is in fact undisputed.
Subsequently, the bailiff will send his certified confirmation to the Central Registry for Seizures (“Centraal Bestand van Beslagberichten”) that will, after verification of the certain formalities, provide the bailiff with an enforceable title against the creditor.
The bailiff can thereafter initiate execution measures against the creditor for the recovery of the undisputed receivable.
The debtor can still oppose to the title, but will have to initiate legal proceedings in front of a Belgian court to do so.
In an attempt to reduce the case overload of the Belgian courts, and to lower the threshold for creditors to proceed to debt recovery, the Belgian legislator has provided creditors with this alternative out-of-court circuit for recovery of undisputed but overdue receivables. This new procedure should allow creditors to, in a fast and low-cost manner, obtain an enforceable title without having to go through the hassle of initiating costly proceedings before a Belgian court.
This procedure is brand new, and it is still too soon to assess whether it truly serves as an alternative for the traditional debt recovery proceedings through Belgian courts. We will in any case closely monitor this subject matter and keep you informed on its effectiveness.