Glossary

Letter of demand, Summons, Default notice

letter of demand (LOD) or a dunning letter (example) is the written way for a creditor to require payment from his debtor.  The summons or default notice is a more formal text (Dutch: “ingebrekestelling”, French: “mise en demeure”.  In fact, these letter are usually about the payment of an agreed sum of money but they could also require the execution of an obligation to do (or not to do) something.

The demand letter of payment and the default notice inform the debtor that the payment has not been received on time by the creditor.  The wording of such letters should always remain simple and with positive language.  Threats and hard language are counterproductive.

The default notice is essential before to go to courts.  It must be unequivocal and therefore, we advise for the use of the terms: “we summon you to pay” followed by the amount due and by the maximum timespan allowed (could be “immediately”).  If sent by registered mail, a default notice can more effectively be used as a proof if there is a later dispute.  Emails and faxes also leave traces of delivery, please keep these.

The law does not specify any contents for a default notice; except the law of 20 Dec 2002 on consumer debt collection, but the latter applies only to third party debt collection (regarding the article about default notice contents), hence not to the creditor’s own actions.

Note: some creditors also send due date reminders.  These are sent a few days before the debt is due.  It is appropriate for bigger receivables and/or more complex issues (like international trade).

The first demand letter is best send a few days after the date the debt was due.  It is usually followed by a default notice after about 10 days.  Thereafter, it is appropriate to make a phone call to the debtor.  Indeed, repeating demand letters could actually send an unwanted “don’t worry” information to the debtor.   It is advisable to include interests and costs in the demand letters and default notices (either as a reminder that these might be added on the next step or as amounts immediately added to the required payment).

If two letters and a phone call did not trigger payment, it is better to outsource the matter to a debt collection office.  Indeed, at such stage it is likely that there is a problem with this debt.  TCM handles thousands of such receivables.  Less than 1% of these claims end up in court.  That is mainly due to our organized and systematic communication with debtors.

 

Updated 24/10/16

Definitions provided under this section refer to the Belgian situation; unless specified otherwise. The texts are meant to summarize concepts in daily language and should not be considered as comprehensive or definite. We welcome suggestions for modifications or additions at glossary@tcm.be.