Action (Collection)
If the debtor fails to pay creditor’s receivables, the latter has two options to legally assert the claim: He can either initiate default action or commence an action. Commencement of an action is necessary if the debtor denies the debt or raises any other objections. A default action will prove unsuccessful in that case – as it serves to quickly and economically lead to an enforceable legal document in the event of an indisputable case.
However, if a debt is denied right from the start the collection enterprises are not permitted to process the case. According to the Legal Advice Act, collection businesses are only allowed out-of-court collection of (anticipated) uncontested debts. An action must be commenced directly by the creditor or his authorised legal representatives respectively.
The local court is competent for claims under 5,000 Euros, the regional court is competent for claims exceeding 5,000 Euros and subject to the statutory requirement to be represented by a lawyer.