Unpaid invoice in Luxembourg: the steps to recover your money

The first step is to send a formal notice. This letter formalises the claim, sets a payment deadline, starts default interest running and announces the legal steps to follow. A significant share of cases is settled at this stage, without proceedings.

A formal notice is strongly recommended and often a useful preliminary. It starts default interest running, shows the creditor's resolve and forms part of the file. In many cases it is enough to obtain payment without a trial.

It is a simplified procedure before the justice of the peace court, reserved for claims of limited amount that are not seriously disputed. On presentation of the documents, the judge may issue an order requiring the debtor to pay, which becomes enforceable if no objection is lodged.

The injunction to pay is a fast procedure before the district court for certain and undisputed claims above the justice of the peace threshold. If the debtor lodges no objection, the creditor obtains an enforceable title without a full trial.

If the dispute is serious, the injunction procedures are not enough: the dispute is decided on the merits by the competent court, in adversarial proceedings. This route is longer but leads to a full judgment that settles the entire dispute.

An enforceable title is a document (an order, a judgment, certain deeds) that authorises the use of enforced recovery. Without an enforceable title, no attachment is possible. Obtaining this title is the central aim of the judicial phase of recovery.

On the basis of the enforceable title, the bailiff may serve a demand for payment and then carry out attachments: on bank accounts, on salary or on movable property. The choice of measure depends on the debtor's assets and solvency.

The timescale depends on the route chosen. An undisputed order for payment or injunction can succeed within a few weeks. Proceedings on the merits take several months. The enforcement phase comes on top, and its duration varies with the debtor's assets.

A formal notice is useful even for small amounts. For modest claims, the order for payment before the justice of the peace court is suitable. For larger amounts, the injunction to pay or proceedings on the merits become relevant.

An unpaid invoice gives a right to default interest from the formal notice or from the agreed due date. Between businesses, the European framework on late payment also provides for a fixed recovery fee.

For an undisputed claim, the European order for payment makes it possible to obtain a decision recognised throughout the Union. The European small claims procedure exists for small amounts. The decision is then enforced in the debtor's country.

It is a European instrument that allows a creditor to obtain, for an undisputed monetary claim, an enforceable decision recognised in the other Member States. It simplifies cross-border recovery by avoiding having to start a new trial abroad.

An enforceable title against an insolvent debtor has limited value as long as there are no assets that can be attached. You should assess solvency beforehand, act quickly and, where appropriate, identify assets or watch for a return to better circumstances.

Waiting increases the risk of the debtor's insolvency and exposes you to limitation, which can extinguish the claim. An old debt is harder to recover. Acting from the first delay, with a reminder and then a formal notice, maximises the chances of payment.

Amicable recovery is faster, less costly and preserves the business relationship. It suits a debtor acting in good faith. Judicial recovery becomes necessary in the event of silence, an unfounded dispute or bad faith, since only an enforceable title allows attachment.

It is not always compulsory, but the support of a lawyer secures the choice of procedure, the calculation of interest, the drafting of the formal notice and the enforcement. A lawyer steers you towards the fastest route depending on the amount and the risk of a dispute.