Meaning of Dunning Procedure

By | June 10, 2021

What is a dunning procedure?

When can I issue reminders? If a customer does not pay an invoice within the specified period, a creditor has the right to issue a reminder. The reminder does not have to be in writing, but the written form makes sense. So you always have a receipt if the customer does not react to the reminder. The written reminder forms the basis for the judicial dunning procedure. The judicial dunning procedure is used to enforce monetary claims and is a civil law court procedure. According to electronicsencyclopedia, the judicial dunning procedure is not to be equated with the out-of-court dunning by the company itself, by lawyers or debt collection agencies.

Judicial dunning procedure prevents statute of limitations

If the customer does not react despite several reminders, the company, as a supplier or service provider, can initiate the legal dunning procedure. The statute of limitations is suspended with the judicial dunning procedure. Simple claims expire after three years. If the entrepreneur does not use the judicial dunning procedure if a customer does not pay, in the worst case it can happen that he does not receive any money at all because of the statute of limitations.

The creditor must act so that he can collect his claim. As a result of the judicial procedure, the entrepreneur, as the creditor, receives an enforcement order. However, there are a few things to consider if he wants to enforce the judicial dunning procedure. In order for the judicial dunning procedure to be successful, it is important that the specific claim is assigned to the procedure. This assignment is absolutely necessary. Only in this way does the customer know unequivocally what the specific requirement is.

The claim does not have to be comprehensively proven in the dunning request. The mere information is sufficient to initiate the dunning procedure. If necessary, the courts will decide whether a claim is justified or not.

Restricted preliminary examination for the judicial dunning procedure

If a payment order is issued, there is usually only an examination of the formalities. There is no preliminary check of the entitlement of a claim. A substantive examination is not carried out by the court commissioned with the dunning procedure. If the claim is only inaccurately specified in the dunning request, a dunning notice can be issued, but the statute of limitations can continue.

It is important to avoid that. The claim can no longer be enforced if an objection has been lodged and a judicial review has taken place. The copies of the unpaid invoices should be attached to the dunning request and then also to the dunning notice so that it can be proven which claims are involved. The debtor must know which outstanding claims are actually involved so that he can settle them or, if necessary, file an objection.

Reminder: Make the claim clearly recognizable

In legal proceedings, it is important to make the respective claim recognizable. The demand must go with

  • date of invoice
  • bill number
  • Project or customer order

be specified in the application for the judicial dunning procedure. This gives the debtor the opportunity to check whether this claim exists at all, whether it concerns him and whether he has received it. The dunning court itself does not examine the claims. The debtor can use the information about the claims to decide whether to settle the claim or whether to object to the judicial dunning procedure.

Enforcement of the monetary claim with the judicial dunning procedure

With the judicial dunning procedure, the enforcement of the monetary claim is possible without filing a lawsuit, a judgment is not required. It is checked whether this monetary claim is justified. There is no oral hearing or evidence. The judicial process makes it possible to save costs and still successfully enforce the monetary claim. A lawyer does not have to be involved in the judicial dunning procedure. Often the dunning procedure is carried out in an automated form. At the end of the judicial process, there is an enforcement order, with which the creditor can collect his monetary claim and, in the final analysis, have it enforced by a bailiff.

Judicial dunning procedure as an alternative to legal action

The creditor can weigh up whether he wants to initiate a judicial dunning procedure or whether he wants to initiate a civil law action. If the creditor does not know the exact address of the debtor, it is better if he takes legal action. In the case of legal proceedings, a public service takes place, this is not the case with the lawsuit. If the creditor expects an objection to the judicial dunning procedure, he usually gets his money faster with a lawsuit. In the event of an objection, the enforcement procedure is transformed into a civil procedure, the statement of claim must be justified and an oral hearing ensued.

Dunning Procedure