Cross-border debt collection tools

When you have an outstanding claim for payment with a company in the Netherlands there are ample possible options enabling you to recover your claim. You can, for instance, choose to request a distraint on the debtor’s bank balances. The balance of the amount of the claim for payment is then “secured” until it is ascertained that you do have a claim on this amount. But how does this work out if there is a claim against a company outside the Netherlands?

Ensure your Accounts Receivable is in good order
No businessman needs to be told of the importance of the prompt payment of invoices by debtors. Good receivables management is vitally important for cash flow and thus a company’s viability. A complete, up to date debtor file comprising the invoices, correct debtor details and copies of all correspondence undertaken with the debtor in the form of reminders and warnings is a  minimum requirement for the successful collection of your receivables.

If a debtor, despite reminders, does not voluntarily proceed to pay, then legal action comes into play, including the issuing of a distraint order. In the Netherlands a distraint can be served without the creditor having received a ruling: this is called a preservation order. In doing this, the creditor has more certainty that, following a definitive court judgment, the outstanding amounts will actually be paid.

Foreign debtors
The following scenarios can be distinguished with regard to foreign debtors. A preservation order can be applied on a foreign debtor with no known place of domicile in the Netherlands if the debtor has goods, including bank balances, credits etc. that are located in the Netherlands; this is known as foreign attachment. It becomes more difficult if the foreign debtor has no goods or credits in the Netherlands. The new European bank attachment can help in this situation.

Read the full article on page 32 in Cargo Magazine click here

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