DEBT COLLECTION LAW BELGIUM

 

Belgium had no specific law regarding debt collection until 2002 where two laws were published.

  • In August 2002, an EU regulation was implemented in Belgian legislation addressing the issue of unpaid commercial debts (i.e. where the debtor is a company).  It was revised in 2016, as a consequence of the EU legislative work. This legislation is essentially aimed at protecting the creditors.  Creditors are granted a minimum interest rate (8 points of percentage above the EU Central Banks’ main refinancing rate – currently 0 + 8 = 8%); and the debtor has to compensate the creditor for all collection costs (under certain conditions).
  • In December 2002, the Official Journal published a law regulating amicable consumer debt collection.  This latter one was quite unique in Europe in terms of limitations and sanctions.  It was extended to attorneys at law and to bailiffs in 2009.  This legislation actually protects consumers from unfair debt collection practice.  Please read below for additional details.
  • On 19th October 2015 the so called « Pot-Pourri I » act included a new procedure to enforce payment of uncontested monetary claims.  This legislation being quite new, its benefits or flaws have not been demonstrated yet.

 

There is other minor legislation.  This includes “the lawyer letter” that extends the period within which a claim is time-barred by one year at most.  This legislation has been forgotten the day after its publication because it is useless.

 

The main issue on Belgian legislation are twofold:

  1. The legislator consults professional in most cases but sometimes omits to do so.  We anticipate the Pot-Pourri act on uncontested claims to be quite damaging for business, hence the opposite of the result openly sought.
  2. The Public Administration is relatively inefficient at searching and stopping fraud.  This is due to a lack of resources.  It has a significant impact on the economy as unfair players benefit from their wrongdoings and can invest such benefits to grow; pushing fair actors out of the picture.

Having said that, legislation is paramount to any business and to debt collection too.  Belgian debt collection legislation is quite good.  We hope to see an improvement in the coming years on cooperation between the legislator and the professionals as well as better controls.

Debtor’s privacy

Belgium has a privacy protection legislation since 1992.  It has been modified regularly since then and will experiment a significant change after 25 May 2018 when the latest EU Regulation enters into force.

Data protection laws do not aim specifically at debt collection, far from that.  But this set of regulation ensures that personal data is treated with respect for the citizen’s privacy; also when the citizen is a debtor.

Consumer debt collection act

The 20 Dec 2002 law on amicable consumer debt collection is worth some more detailed explanation.

  • It applies to amicable (out of courts) recovery of consumer debts.
  • It applies to any debt collection action but has additional specific rules for third party debt collection.
  • Debt collection actors have to be listed with the controlling authority.
  • It bans misinformation, the use of untrue legal threatening, claiming unjustified amounts, and a few other unfair practice.
  • It demands to start the procedure with a letter to the debtor and to grant the debtor 15 days before to make a new action.  Such letter needs to include specific information comprising the address of the controlling authority.
  • It forbids to claim any cost or interest except if such costs and interests have been agreed in the underlying contract between the creditor and the debtor.
  • It specifies rules for to visits to debtors (which is a specific and quite unique activity of TCM).
  • Sanctions for parties who do not comply are heavy.

 

This law has had a positive impact on the trade. The controlling authority registered only 420 complaints in 2015.  And not every complaint is substantiated, far from that. Besides, the Belgian Collectors Association reported over 1,700,000 new debt collection cases for the same year and many of the 420 complaints are about lawyers and bailiffs or on debt collectors that are not a member of the Association.

 

For further information about the debt collection law in Belgium you can consult our publications on:

 

You wish more information, please contact us via our website or directly!

 

 

DEBT COLLECTION LAW BELGIUM

 

Belgium had no specific law regarding debt collection until 2002 where two laws were published.

  • In August 2002, an EU regulation was implemented in Belgian legislation addressing the issue of unpaid commercial debts (i.e. where the debtor is a company).  It was revised in 2016, as a consequence of the EU legislative work. This legislation is essentially aimed at protecting the creditors.  Creditors are granted a minimum interest rate (8 points of percentage above the EU Central Banks’ main refinancing rate – currently 0 + 8 = 8%); and the debtor has to compensate the creditor for all collection costs (under certain conditions).
  • In December 2002, the Official Journal published a law regulating amicable consumer debt collection.  This latter one was quite unique in Europe in terms of limitations and sanctions.  It was extended to attorneys at law and to bailiffs in 2009.  This legislation actually protects consumers from unfair debt collection practice.  Please read below for additional details.
  • On 19th October 2015 the so called « Pot-Pourri I » act included a new procedure to enforce payment of uncontested monetary claims.  This legislation being quite new, its benefits or flaws have not been demonstrated yet.

 

There is other minor legislation.  This includes “the lawyer letter” that extends the period within which a claim is time-barred by one year at most.  This legislation has been forgotten the day after its publication because it is useless.

 

The main issue on Belgian legislation are twofold:

  1. The legislator consults professional in most cases but sometimes omits to do so.  We anticipate the Pot-Pourri act on uncontested claims to be quite damaging for business, hence the opposite of the result openly sought.
  2. The Public Administration is relatively inefficient at searching and stopping fraud.  This is due to a lack of resources.  It has a significant impact on the economy as unfair players benefit from their wrongdoings and can invest such benefits to grow; pushing fair actors out of the picture.

Having said that, legislation is paramount to any business and to debt collection too.  Belgian debt collection legislation is quite good.  We hope to see an improvement in the coming years on cooperation between the legislator and the professionals as well as better controls.

Debtor’s privacy

Belgium has a privacy protection legislation since 1992.  It has been modified regularly since then and will experiment a significant change after 25 May 2018 when the latest EU Regulation enters into force.

Data protection laws do not aim specifically at debt collection, far from that.  But this set of regulation ensures that personal data is treated with respect for the citizen’s privacy; also when the citizen is a debtor.

Consumer debt collection act

The 20 Dec 2002 law on amicable consumer debt collection is worth some more detailed explanation.

  • It applies to amicable (out of courts) recovery of consumer debts.
  • It applies to any debt collection action but has additional specific rules for third party debt collection.
  • Debt collection actors have to be listed with the controlling authority.
  • It bans misinformation, the use of untrue legal threatening, claiming unjustified amounts, and a few other unfair practice.
  • It demands to start the procedure with a letter to the debtor and to grant the debtor 15 days before to make a new action.  Such letter needs to include specific information comprising the address of the controlling authority.
  • It forbids to claim any cost or interest except if such costs and interests have been agreed in the underlying contract between the creditor and the debtor.
  • It specifies rules for to visits to debtors (which is a specific and quite unique activity of TCM).
  • Sanctions for parties who do not comply are heavy.

 

This law has had a positive impact on the trade. The controlling authority registered only 420 complaints in 2015.  And not every complaint is substantiated, far from that. Besides, the Belgian Collectors Association reported over 1,700,000 new debt collection cases for the same year and many of the 420 complaints are about lawyers and bailiffs or on debt collectors that are not a member of the Association.

For further information about the debt collection law in Belgium you can consult our publications on:

 

You wish more information, please contact us via our website or directly!

 

 

Don’t wait another second – collect your money

Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.

Don’t wait another second – collect your money

Focus on your business, we’ll take care of your outstanding payments. Contact us to find out more.