Lending money to someone carries risks, especially if clear agreements are not made. It is important to take the right steps to protect your financial interests and, if necessary, to recover the borrowed amount through the legal route.
Before lending money, it is advisable to prepare a written loan agreement. This lays out the principal amount, repayment terms, interest rate (if applicable) and consequences in case of default. Such a document is an essential piece of evidence if the debtor later refuses to repay.
When the debtor does not pay (anymore), there are several legal steps possible. Initially, you can send a registered notice of default, formally requesting the debtor to pay the amount owed within a certain period of time. If this is unsuccessful, you can resort to a collection agency or start legal proceedings directly.
For debts up to 5,000 euros, you can follow a simplified procedure through the justice of the peace. For higher amounts, the corporate court or the court of first instance has jurisdiction. In some cases, the debtor's assets can also be seized to recover the debt.
It is also possible to obtain a writ of execution, which can then be executed by a judicial officer. The judicial officer can then seize movable property, bank accounts or even the debtor's wages (wage garnishment).
Whether you are an individual who has lent money to a friend or family member, or a business owner dealing with a defaulter, Novex Lawyers will assist you at every stage of the collection process. Contact us for a no-obligation consultation.
