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EXPLAINED: What happens if you don't pay a bill in Germany?

Sarah Magill
Sarah Magill - [email protected]
EXPLAINED: What happens if you don't pay a bill in Germany?
A man speaks on the phone while reading a letter. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

Whether due to financial constraints, oversight, or unexpected events, failing to pay a bill in Germany can have significant consquences.

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If you have to pay for a service or product in Germany, you will often receive an invoice or eine Rechnung by post or digitally.

The invoice will include details such as the amount owed, who to pay and the date payment is due (Fälligkeitsdatum).

If you don’t pay the bill before the due date, the first thing you will get is a Mahnung or a "reminder" from whoever you owe the money to, which serves as a formal request for payment and most often will be without additional fees.

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However, if you don't respond to the initial reminder, a second reminder may be sent.

From the second reminder, merchants can add extra charges called reminder fees (Mahnungsgebühren) and interest (Zinsen).

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If you still haven't paid the invoice after the reminders, the company may engage a collection agency (Inkassobüro) to recover the debt on their behalf. The collection agency will then contact you directly, usually by post, to request payment.

A letter from a debt collection agency sticks out of a post box.

A letter from a debt collection agency sticks out of a post box. Photo: picture alliance/dpa/dpa-Zentralbild | Jens Büttner

Such letters can be confusing at first as they are from a company whose name you might not recognise. If you receive such a letter, it's important to check the amount they are asking for against any outstanding invoices you may have. 

Legal proceedings

If, after being contacted by the debt collection agency, you still have not paid the invoice, then they may initiate legal proceedings against you (Rechtsverfahren).

This can involve taking the case to court, where a judgment (Gerichtsurteil) may be issued against you. If a court determines that you owe the debt, it may issue a court order that requires you to pay via eine Zwangsvollstreckung or "enforcement proceedings".

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This order can be enforced through various means, including actions such as taking money directly from your paycheck, freezing your bank account, or selling your property to ensure that the debt is paid.

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It's important to note that the specific steps and terminology may vary depending on the type of bill, the creditor, and the amount owed. If you find yourself in a situation where you are unable to pay a bill, it is generally advisable to contact the creditor as soon as possible to discuss potential alternatives or payment arrangements.

What happens to your credit rating?

Failure to pay a bill can negatively impact your credit rating in Germany, which can make it more difficult for you to obtain credit, loans or even find an apartment in the future.

A person's credit rating (Schufa), also known as Bonität in German, is a measure of an individual's creditworthiness and ability to fulfil their financial obligations.

READ ALSO: Schufa: How foreigners can improve their German credit score

When you don't pay a bill, it may be reported to credit bureaus or credit reference agencies in Germany, which collect and maintain information about individuals' credit histories and payment behaviour. Non-payment or default on a bill can be recorded as a negative entry on your credit report.

Having a negative entry on your credit report can make it more challenging to obtain credit, loans, or other financial services in the future as lenders and creditors often review credit reports to assess an individual's creditworthiness and determine the risk of lending them money.

A history of non-payment can lead to a lower credit score and may result in higher interest rates or being denied credit altogether.

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