Debt recovery

Debtor who does not pay / Remedies / How we can help you

The debtor who does not pay

In the case of contractual obligations, the creditor has the right to obtain from his debtor the exact, timely and full performance of all obligations incumbent on him.

This rule applies irrespective of the object, nature and purpose of the obligations undertaken (e.g. supply of a product, payment of a sum of money, provision of a building, ensuring the use of a building for its intended purpose, maintaining securities at a certain value, keeping certain information confidential, completion of a construction, delivery of documents, receipt of goods, etc.).

In certain situations debtors do not meet their obligations or meet them in a deficient manner and/or overdue.

In certain situations, the non-performance of obligations is due to the bad faith of the debtor, while in other situations the non-performance of obligations is due to circumstances beyond the debtor’s control (e.g. the existence of force majeure, the existence of a fortuitous event, etc.).

Remedies

If the debtor fails to perform his obligations and/or performs them poorly and/or late, the law provides the creditor with a number of remedies.

Remedies are diverse and may consist of, as appropriate:

• termination or rescission of the contract (termination of the contract either retroactively or only for the future);
• the creditor’s refusal to fulfil his own obligations (exception of non-performance of the contract);
• introduction of promissory notes for payment;
• the initiation of enforcement proceedings (insofar as there is an enforceable title);
• taking the debtor to court;
• termination of the contract;
• order the debtor to pay damages for the harm caused;
• the initiation of insolvency proceedings against the debtor.

A number of the remedies outlined above can be helped by introducing specific clauses in contracts with debtors that sanction non-performance, such as:

• clauses obliging the debtor to pay even in the event of force majeure;
• clauses obliging the debtor to pay a certain amount of interest for late payment;
• clauses whereby the debtor guarantees the fulfilment of obligations by setting up guarantees (e.g. mortgages, endorsed promissory notes);
• clauses whereby the contract concluded with the debtor becomes enforceable in case of non-performance.

For more details on how to enter into contracts to prevent defaults, please visit the section Contracts with customers.

For more details on the enforcement of debtors please visit the Enforcement section.

How we can help you

Our lawyers can advise you and provide you with legal assistance and representation in dealing with your company’s debtors, such as:

• assistance in negotiating and concluding contracts;
• drafting and sending notices of default and/or termination/termination of contracts;
• taking debtors to court or arbitration;
• the start of enforcement proceedings,
• the initiation of insolvency proceedings,
• negotiating a transaction.

More information about debt recovery