Unpaid invoices and outstanding payments are among the most common problems in both business and private spheres. A lawsuit is not always immediately necessary to enforce a claim. The judicial dunning procedure offers creditors the opportunity to proceed against defaulting debtors quickly, relatively cost-effectively, and without immediate contentious dispute. The central instrument of this procedure is the order for payment.
What is an Order for Payment and what purpose does it serve?
The order for payment is a formalized judicial payment demand issued within the framework of the judicial dunning procedure. It serves to assert an existing monetary claim without initially having to justify or prove its content. The court does not examine whether the claim actually exists, but only whether the formal requirements are met. The essential purpose of the order for payment is to prompt the debtor to pay or – if they do not react – to create the basis for an enforcement order. At the same time, the application for an order for payment suspends the statute of limitations for the claim, which is of considerable importance, especially for claims nearing their expiry date, particularly before the end of the calendar year in cases of imminent limitation.
Course of the Judicial Dunning Procedure
The dunning procedure begins with the application for an order for payment at the competent (central) dunning court. The application can be submitted electronically or in writing and contains information about the parties as well as the amount and type of claim. Upon receipt, the court issues the order for payment and serves it to the debtor. From the date of service, the debtor has 14 days to either settle the claim or file an objection. If an objection is filed, the procedure is transferred to a regular litigation procedure upon request and forwarded to the competent court. If, however, the debtor remains inactive, the creditor can apply to the dunning court for an enforcement order. The enforcement order is equivalent to a court judgment and enables compulsory enforcement, for example, through account or wage garnishment or instruction of the bailiff. An appeal against the enforcement order is still possible, but only within strict deadlines.
Advantages and Risks of the Order for Payment
The order for payment offers several advantages: It is significantly cheaper than an immediate lawsuit, involves less effort, and in many cases already leads to payment, as debtors wish to avoid the consequences of an enforcement order. Furthermore, the procedure is standardized and comparatively fast. However, the order for payment is not always the right tool. If the debtor files an objection, the enforcement of the claim is delayed, as a contentious procedure then becomes necessary. In addition, the order for payment is only suitable for monetary claims aimed at the payment of a specific sum. Other claims, such as for surrender or injunction, cannot be asserted in the dunning procedure. Another risk is that incorrect or incomplete information in the application can lead to delays or invalidity of the procedure. Especially with multiple claims, interest, or ancillary claims, careful examination is essential.
Responding to an Order for Payment
Anyone who receives an order for payment should under no circumstances ignore it. If there is no reaction, an enforcement order with significant consequences is imminent. If the claim is justified, payment within the deadline can avoid further costs. If there are doubts about the claim, an objection should be filed in due time. The objection does not need to be justified but must be filed within the deadline. If the debtor misses this opportunity, it becomes significantly more difficult to defend against the claim.
Conclusion
The order for payment is an effective instrument for enforcing outstanding monetary claims and offers creditors a fast and cost-efficient alternative to a lawsuit. At the same time, it is a serious warning signal for debtors that should under no circumstances be ignored. Both when applying for and responding to an order for payment, legal review is recommended to avoid unnecessary risks and costs. Please feel free to contact me about this.
