Instructing a collection agency online: how the handover works for businesses

Which claims can you hand over online?

Instructing online does not mean uploading every open invoice. A collection agency takes on claims that meet three conditions:

• Due: Your work has been delivered, the invoice issued and any agreed payment term has expired. If nothing was agreed, payment can be demanded immediately under the German Civil Code (BGB), and for contracts for work on acceptance (Abnahme).
• Undisputed: The customer has not raised specific objections, such as defects, wrong quantities or a set-off. Silence is not an objection.
• In default, and provably so: through a reminder after the due date, through a payment date agreed in the contract or through the 30-day rule after the due date and receipt of the invoice. With consumers, the 30-day rule only applies if the invoice points out this consequence.

Two practical points come on top: the claim must not be time-barred, and you must be able to identify the debtor clearly. Whether your customer is a company or a private individual makes no difference to the handover. The rules on interest and flat fees do differ, however.

If the customer has raised a specific objection, resolve it before the handover. No reputable collection agency takes on disputed claims. If the customer has simply stayed silent or stalled, your claim is a typical case for handover. How to decide after an ignored reminder is shown in the article Final reminder ignored.

Which documents do you need?

The more complete the file, the fewer the queries. These documents belong to a handover:

For the debtor you need the full name, for companies the legal form and if possible the commercial register number, plus the current address. Email address and phone number help with contacting them. Be careful with brand and branch names: the contracting party is the company, not the shop sign.

How to proceed: create one folder per claim and name the files with the invoice number, for example “R-2026-118_invoice.pdf”. Entering the claim in the portal then works without searching.

Step by step: how online instruction works

At incaseof.law the handover takes place entirely in the client portal. There is no minimum volume; you can hand over a single invoice.

1. Register: You create an account and enter your company details.
2. Create the claim: You enter the debtor, the outstanding amount and the due date.
3. Upload documents: Invoice, reminder, proof of performance and relevant correspondence.
4. Check and submit: Compare amount and debtor with your accounts. If the same claim is already being handled elsewhere, do not hand it over twice.
5. Follow the status: The portal shows which stage the case is at.

If you regularly hand over many claims, you do not need to type anything. For larger volumes there is a connector for your accounting system or a REST interface; you then receive the status by webhook. The page How the handover works describes the whole process from handover to payout.

What happens after the handover?

First, the claim is checked against the requirements. If a document is missing, you will get a query. Then the out-of-court phase begins: the debtor receives a payment demand with a clear statement of the claim. For private individuals, the German Legal Services Act (RDG) prescribes what must already be in the first letter, including your name as the client, the basis of the claim, the interest calculation, the type and amount of collection costs and the competent supervisory authority. These mandatory details do not apply to businesses. A clear breakdown of principal claim, interest and costs still belongs in every letter, because it takes away the debtor’s excuse of not knowing what they are paying for.

The case team decides on the reminder stages. If the debtor asks to pay in instalments, they can apply in the debtor portal. Applications are accepted according to fixed rules that are the same for everyone. Your task in this phase is small but important: if the customer pays you directly or comes back with a new objection, report it immediately in the portal.

If the debtor still does not pay, the court route is open. In Germany that is the court payment order (Mahnbescheid). Registered collection service providers may represent creditors in the payment order procedure until the case is transferred to the court for contested proceedings. After the handover, court proceedings such as a court payment order are only initiated once you approve them; the case team agrees the procedural route and any representation required with you case by case. There are no automatic court filings. The guide Court payment order procedure in Germany explains the procedure. Recovery and duration are not guaranteed.

Who bears the costs of debt collection?

In principle, the defaulting debtor. If your customer is in default, they must compensate you for the damage caused by the delay. This includes the costs of a collection service provider. The law caps them: at most, what a lawyer could charge for the same work is recoverable. For an undisputed claim, the lawyer’s fee is normally capped at 0.9 times a full fee, and at 0.5 times in simple cases. A case is normally simple if the debtor pays within two weeks of the first payment demand.

In addition, the customer owes late-payment interest. Between businesses that is 9 percentage points above the base rate, so 10.52 percent a year since 1 July 2026. If your customer is not a consumer, a flat fee of 40 euros is added, which is offset against the collection costs. There is one limit: if it was clear from the outset that even a collection agency would not get the debtor to pay, for instance after a definitive refusal to pay, the debtor does not have to reimburse its costs.

At incaseof.law you receive 100 percent of the principal claim. There is no success fee on the principal claim. The defaulting debtor bears the default costs within the legal limits. No costs from incaseof.law, even if the debtor doesn’t pay. Court fees and, in Austria, MANZ transmission fees only arise once you approve court proceedings. You will find the breakdown under Pricing.

Example: An electrical contractor invoices a limited company (GmbH) 2,380 euros on 4 August 2026. The order confirmation agrees “payment by 18 August 2026”. The company does not pay and is therefore in default from 19 August without a reminder. A reminder sent on 2 September also goes unanswered. On 1 October the contractor hands the claim over online. By then, 30.18 euros of interest has accrued for 44 days of default (2,380 × 10.52 % × 44 ÷ 365), plus the flat fee of 40 euros. The company therefore owes 2,450.18 euros, plus collection costs within the legal limits, against which the flat fee is offset. If it pays, the contractor receives the full principal claim of 2,380 euros.

How do you recognise a reputable provider?

In Germany, debt collection is a legal service that requires registration. Anyone collecting claims for others must be registered with the Federal Office of Justice (Bundesamt für Justiz). The Legal Services Register (Rechtsdienstleistungsregister) is public, and anyone can look it up. Search for the provider’s name there and check that the registration covers debt collection services and that the address matches the imprint.

Other good signs: the provider states its costs before you instruct it, accepts only undisputed claims and explains what happens after an unsuccessful out-of-court phase. incaseof.law is licensed in Austria and registered in Germany (Legal Services Register, reg. no. 2024 0000 8388).

How to proceed: before your first handover, spend five minutes on the register entry. Do not upload customer data to a provider you cannot find there.

When is a handover worthwhile, and when not?

A handover is worthwhile as soon as you have sent one clear reminder and nothing happens, or as soon as an agreed payment date has passed. From then on, each further reminder of your own achieves little and costs your time. This applies especially when many small invoices accumulate or a customer has been stalling for weeks.

In three cases a different route is right:

• The customer disputes specific points: Resolve the objection, with a lawyer’s help if necessary. Debt collection does not replace resolving the dispute.
• Insolvency proceedings have been opened against the customer: You then file the claim in writing with the insolvency administrator. A collection letter to the debtor no longer helps.
• Limitation is approaching: A collection letter does not suspend the limitation period. If the period ends at year end, you need a court payment order or a lawsuit in good time.

Your checklist before submitting

• Work delivered and invoice received by the customer
• Payment term expired, default provable by reminder, agreed date or 30-day rule
• No open objections, no running instalment agreement
• Balance checked after partial payments and credit notes
• Debtor with full name, legal form and address
• Invoice, contract or order, proof of performance and reminder ready as PDF
• Provider found in the Legal Services Register

If every point is met, you can hand the claim over today. Registration and entry start on the page Submit a claim.