Final payment reminder ignored: your next step in Germany

Is your customer already in default?

Before you decide on the next step, answer one question: is your customer legally in default (Verzug)? That determines whether they have to bear interest and costs. The German Civil Code (BGB) provides three routes into default.

Two traps are common. A payment term that you print unilaterally on the invoice is not an agreed date. “Payable within 14 days” therefore does not put the customer in default automatically; your reminder or the 30-day rule applies instead. And a reminder sent before the due date is ineffective. It does not become effective later either.

Default also requires that the customer is responsible for the delay. Someone who simply does not pay normally is. If the customer wants to show otherwise, the burden of proof is on them.

How to proceed: put the invoice, the payment terms and the reminder side by side and note the date from which default runs. You will need this date for interest, for the collection handover and for the court application.

Do you need a third or final reminder?

No. A single reminder that reaches the customer after the due date is enough for default. It does not have to set a deadline or threaten consequences. If you do set a deadline, default only begins once it has expired. It is sufficient that you clearly demand payment. A friendly “payment reminder” (Zahlungserinnerung) is also a formal reminder if it names the invoice and asks for payment.

Three reminder stages are commercial habit, not law. Each further round costs you around two weeks and changes nothing legally. Customers who want to pay do so after the first reminder or get in touch. Customers who stay silent usually stay silent after the third.

A “final reminder” is only worth sending if you announce a specific step in it and then take that step. State the date and the consequence: “If the amount is not received by 21 October 2026, we will pass the claim to a collection agency.” Only announce what you really intend to do. An empty threat devalues every further letter.

You will find wording for a reminder and a final demand in the guide Writing a payment reminder: template and deadlines. If you have already sent one clear reminder, do not write another stage; decide on the next route instead.

What does default cost the customer?

From the start of default your customer bears the consequences of the delay. The BGB gives you three claims:

• Late-payment interest: Between businesses, 9 percentage points above the base rate. Since 1 July 2026 the base rate has been 1.52 percent, so late-payment interest is 10.52 percent a year. Where a consumer is involved, it is 5 percentage points above the base rate, currently 6.52 percent.
• Flat fee of 40 euros: If your customer is not a consumer, you are also entitled to a flat fee of 40 euros for a payment claim, without proving any effort. It is offset against later costs of legal action.
• Further damage caused by default: This includes the costs of a collection agency. The customer must reimburse them up to the amount a lawyer could charge for the same work.

The costs of the reminder that first triggers default are not recoverable. So you do not charge a fee for your first reminder.

Example: An advertising agency invoices a retailer 6,000 euros on 1 July 2026, payable immediately. No payment term is agreed, and the invoice is received by email on the same day. The retailer ignores a reminder in August and a “final reminder” in September. Under the 30-day rule the retailer has been in default since early August at the latest. For 60 days of default the agency is entitled to 103.76 euros in interest (6,000 × 10.52 % × 60 ÷ 365), plus the flat fee of 40 euros. The claim now stands at 6,143.76 euros, and every further day adds around 1.73 euros of interest. Its own reminder costs do not come on top, because the flat fee is offset against costs of legal action.

Check your own case with the late-payment interest calculator and select Germany there. You need the amount for your court application. If you hand the claim over to incaseof.law, you receive 100 % of the principal claim; the defaulting debtor bears the default costs.

Is the customer silent or disputing the claim?

Before you pass the case on, classify your customer’s reaction. Silence is not an acknowledgement, but it is not an objection either. Four situations come up in practice:

• The customer stays silent: The classic case for a collection agency. The claim is undisputed; all that is missing is pressure.
• The customer stalls: “We will pay next week.” Record the promise in writing with amount and date. If it is not kept, hand the claim over without another round.
• The customer names specific defects: Resolve the objection first. No reputable collection agency takes on disputed claims, and a court payment order would predictably end in an objection.
• The customer refuses payment outright: A collection letter achieves little here, and the customer may not have to reimburse its costs. Court action is the more direct route.

Record every response with its date. A short note in the customer account is enough. It will later decide which route fits and what you can prove.

Collection agency or court payment order: which route fits?

The two routes are not mutually exclusive. A registered collection service provider may also represent you in the court payment order procedure until the case is transferred to the court for contested proceedings. The question is where to start.

Watch the limitation period. In Germany, claims are normally time-barred after three years, counted from the end of the year in which they arose. A claim that fell due in 2023 therefore normally becomes time-barred at the end of 31 December 2026. More on this in the guide Limitation periods for claims in Germany. Check now whether older items are affected.

When is it worth handing over to a collection agency?

As soon as the claim is due and undisputed and your customer has not reacted to the reminder. From that point your time is more expensive than any further reminder of your own. A collection agency writes as a neutral third party, calculates interest and costs correctly and keeps the file until payment or until the decision on court action.

At incaseof.law the handover takes place online in the client portal. You register, enter the debtor, amount and due date and upload the invoice and supporting documents, including your reminder with its date. There is no minimum volume. We accept due, undisputed claims with documented payment default. The case team decides on the reminder stages. 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. If your customer 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.

You receive 100 percent of the principal claim, with no success fee on it. 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. Recovery and duration are not guaranteed. All steps and requirements are on the page Submit a claim.

When is a court payment order the better step?

When limitation is pressing or the customer will clearly only react to a court. You file the application online with the central payment order court (Mahngericht) responsible for your place of business. The court only checks formally whether the application is complete, not whether your claim exists. The court fee is half a fee based on the amount in dispute, at least 38 euros.

After service your customer has two weeks to lodge an objection. If they stay silent, you apply for the enforcement order. This must be done within six months of service of the payment order, otherwise it loses its effect. How to file the application online step by step is shown in the article Applying for a court payment order online. The guide Court payment order procedure in Germany explains the procedure with all deadlines.

Your decision path in five questions

1. Is the invoice due and your work delivered? If not: clarify the work and the invoice first.
2. Is the customer in default? If not: send one clear reminder now, with invoice number and amount.
3. Does the customer dispute specific points? If yes: examine the objection. No collection and no court payment order while the dispute is open.
4. Does limitation run out on 31 December? If yes: apply for a court payment order in good time.
5. Everything else: hand the claim over instead of writing a third reminder.

Take ten minutes today for your list of open items and go through every item older than 30 days with these five questions. Most cases are decided after that.