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"For legal reasons, we will pay this invoice in half a year"... !!!
Thread poster: Magdalena Kowalska
Charlie Bavington
Charlie Bavington  Identity Verified
Local time: 10:03
French to English
Seems legit in theory Dec 9, 2015

Magdalena Kowalska wrote:

A German agency I did a few jobs for wants to pay one of my invoices in March next year, for a reason which is completely unclear to me. Apparently this is because the company is in the process of restructuring (in German "Schutzschirmverfahren"), and "due to legal reasons no outstanding invoices sent before November 18, 2015, can be paid until March 2016."


Google some of the German terms they are throwing at you + English words like insolvency and moratorium and you'll see that their statements seem plausible. German firms can get a stay or moratorium on payments to creditors while they try to sort themselves out, as indeed they can in many countries. I haven't found a time limit (you only usually get 6 weeks in the UK but obviously that doesn't apply here).

AFAIK, once that happens, late payment provisions can be on hold (Article 1 of the Late Payments Directive - you'll need to check its application in Germany), so I'm not sure it's worth trying to charge interest - you'll be lucky if they eventually pay what they originally owed, since this kind of procedure is rarely a sign of blooming financial health, never mind anything extra!

I have to say plausible because obviously there is the chance they are merely pretending to avoid paying you. You'll have to investigate to see if it's true.


 
Richard Foulkes (X)
Richard Foulkes (X)  Identity Verified
United Kingdom
Local time: 10:03
German to English
+ ...
Yes Dec 9, 2015

Magdalena Kowalska wrote:

Would administration be a good reason not to pay invoices?


Yes. In fact, that's kind of the point - to temporarily suspend liabilities and restore the company to a firmer footing. See the below from the UK government website. However, from the point of view of recovering your money, it's not that useful to conflate the UK and German systems when you obviously need sound advice on the German system. Good luck recovering your money.

https://www.gov.uk/put-your-company-into-administration

You can put your company or limited liability partnership (LLP) into administration if it’s in debt and can’t pay the money it owes.

You’ll be protected from legal action by people or organisations who are owed money (‘creditors’) and nobody can apply to wind up your company during administration.

Administration can mean your company doesn’t have to pay all its debts in full - but your company can still be wound up.


 
Sheila Wilson
Sheila Wilson  Identity Verified
Spain
Local time: 10:03
Member (2007)
English
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Thing is, you rarely get to know the whole picture Dec 9, 2015

Magdalena Kowalska wrote:
What would you have done, if you were more savvy then?

If it happens again (crossed fingers that it doesn't), then I'll at least know which questions to ask, so I might have the confidence to go along with the request. But it just depends whether they're being open about it or being cagey. It isn't something I'd do lightly.

To be honest, it doesn't seem to me to be a good idea to do anything too extreme at the moment. Certainly not if the invoice wasn't for a very large sum, anyway. Others who speak German seem to think it could be legit, and it does sound very much like the French "redressement judiciaire", i.e. a stable period where you try to get the business back on its feet, rather than winding it up at once. I guess you've seen this reference: http://www.ra-franzke.de/wie-lange-dauert-das-schutzschirmverfahren-und-wann-ist-das-unternehmen-wieder-schuldenfrei/ which I think (I don't really speak German nowadays) talks of three months as a common period.

If I were you (but then I'm not you). I'd carry on gathering as much information as possible for free. Is there some sort of Citizens Advice Bureau equivalent in Germany? Or maybe the CCI over there could help? Or, as I said, some forum of "experts-in-the-making".


 
Magdalena Kowalska
Magdalena Kowalska  Identity Verified
United Kingdom
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Polish to English
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TOPIC STARTER
A German collection agency Dec 9, 2015

Could anyone recommend a collection agency in Germany? I have never needed one, but it might be a good piece of information to have in general, as most of my clients are based in Germany.

 
Christel Zipfel
Christel Zipfel  Identity Verified
Local time: 11:03
Member (2004)
Italian to German
+ ...
Generally speaking... Dec 9, 2015

Magdalena Kowalska wrote:

Could anyone recommend a collection agency in Germany? I have never needed one, but it might be a good piece of information to have in general, as most of my clients are based in Germany.


... you could file a Mahnantrag on line, see here: https://www.online-mahnantrag.de/omahn/Mahnantrag?_ts=4654229-1449676534009&Command=start
(choose Berlin if you live outside Germany).

Here are some useful explications in English:
http://www.toytowngermany.com/forum/topic/208637-how-to-get-a-court-payment-order-mahnbescheid/

I have done this once for an issue that was not business related, and a friend of mine happened to do it at the same time for a commercial debt (invoice).
We have both been paid immediately and everything (court costs, interests, claimed expenses) have been refunded as well by the debtor.

But you say it: this could be a good solution and a useful information to have in general, if worst comes to worst (hoping you'll never need it). I don't think it could apply in this case, unfortunately.


 
Natalia Postrigan
Natalia Postrigan  Identity Verified
United States
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If they have started bankruptcy proceedings, all you can do is relax and wait Dec 9, 2015

If they have _formally_ filed for some form of bankruptcy proceedings, including restructuring, you are in the same shoes as any other of their accounts payable: they will first have to go through the legal motions of bankruptcy/restructuring, during which time a ladder of debt payments will be determined, and only then they will be paying. Basically, it might sound unfair to you personally, but if that company does not have sufficient funds to pay all creditors, there will be legal principles g... See more
If they have _formally_ filed for some form of bankruptcy proceedings, including restructuring, you are in the same shoes as any other of their accounts payable: they will first have to go through the legal motions of bankruptcy/restructuring, during which time a ladder of debt payments will be determined, and only then they will be paying. Basically, it might sound unfair to you personally, but if that company does not have sufficient funds to pay all creditors, there will be legal principles guiding who will be getting paid first. Chances are it will be institutional creditors such as banks. When the ladder is set, you can hope to get at least a part of what is due to you, but it's going to take time. Whether you can claim late fees, depends on the law, but I would not spend money on a lawyer just yet if this company is indeed formally going through the bankruptcy motions. You will be one fish in a big sea of creditors, unfortunately.
Of course, if they _have not_ yet formally filed, it's a whole different story because then I would urge you to get what's due to you fast, before their funds are locked in the proceedings.
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Andrea Halbritter
Andrea Halbritter  Identity Verified
France
Local time: 11:03
French to German
+ ...
Debt collecting agency Dec 9, 2015

If you want to, I can recommend you a good debt collecting agency which only charges fees if they get the money back. If not it is entirely free. There is no minimum wage neither and I personally know the owner.

[Modifié le 2015-12-09 18:26 GMT]


 
Kirsten Bodart
Kirsten Bodart  Identity Verified
United Kingdom
Local time: 11:03
Dutch to English
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Chapter 11 Dec 9, 2015

Not a lot of time to dig anything out now, but the 'Schutzschirmverfahren' (literally 'protective screen procedure') seems to be akin to the American chapter 11, but has apparently improved on a few matters.

I don't think collection agencies are going to help here... Nor is late payment interest and all these things... If your client is in that much trouble that they have asked for protection against their creditors, then you can collect all you like, it's not going to do much.
... See more
Not a lot of time to dig anything out now, but the 'Schutzschirmverfahren' (literally 'protective screen procedure') seems to be akin to the American chapter 11, but has apparently improved on a few matters.

I don't think collection agencies are going to help here... Nor is late payment interest and all these things... If your client is in that much trouble that they have asked for protection against their creditors, then you can collect all you like, it's not going to do much.
I'd also relax and wait and cross my fingers the company can continue with payments after a break.

Contact a nice German lawyer and see what they say.

Basically, if they do go bankrupt, you as a creditor are going to be ranked behind the agency's major lenders, so you're not very likely to see your money anyway.
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Katalin Horváth McClure
Katalin Horváth McClure  Identity Verified
United States
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How much money is at risk? Dec 10, 2015

I am not sure spending money on a lawyer, debt collection agency or similar services would be worth it at this point, unless the amount is significant. If they are truly not allowed to pay that invoice right now, all your efforts to get the money now would be wasted, I think. Maybe better to wait?

 
Tom in London
Tom in London
United Kingdom
Local time: 10:03
Member (2008)
Italian to English
They're wrong Dec 10, 2015

They wrote:

"For legal reasons, we will pay this invoice in half a year"

WRONG

Suggested reply from you:

"For legal reasons, which will become quickly evident should you fail to do so, you will pay this invoice within the next seven days".


 
Kirsten Bodart
Kirsten Bodart  Identity Verified
United Kingdom
Local time: 11:03
Dutch to English
+ ...
Well, basically Dec 10, 2015

they are bankrupt or are going to go bankrupt if nothing major happens.

So demanding your invoice is paid within 7 days is not going to do anything, as far as I'm concerned. They're trying to save what's still there to save with management by themselves, so give them a break and hope they can still save it.
I've known an agency to go bankrupt and it's quite sad, especially if it's no fault of their own (in this case it was embezzlement in the accounting department, or so they
... See more
they are bankrupt or are going to go bankrupt if nothing major happens.

So demanding your invoice is paid within 7 days is not going to do anything, as far as I'm concerned. They're trying to save what's still there to save with management by themselves, so give them a break and hope they can still save it.
I've known an agency to go bankrupt and it's quite sad, especially if it's no fault of their own (in this case it was embezzlement in the accounting department, or so they said).

You can always ask a German lawyer for advice. That shouldn't be too expensive (maybe even free, as your first consultation should be, but then maybe that doesn't include emails and letters), but I wouldn't do anything before the 6 months are up.
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Tom in London
Tom in London
United Kingdom
Local time: 10:03
Member (2008)
Italian to English
Who says Dec 10, 2015

Kirsten Bodart wrote:

they are bankrupt or are going to go bankrupt if nothing major happens.


An assumption seems to have crept into this discussion that the non-paying agency is insolvent/bankrupt or nearing bankrupcy.

I cannot see any evidence to support that assumption and indeed as the OP said, their name does not appear on the official records.

The only assumption that would be legimate is that these people must be forced to pay.

[Edited at 2015-12-10 11:15 GMT]


 
Magdalena Kowalska
Magdalena Kowalska  Identity Verified
United Kingdom
Local time: 11:03
Polish to English
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TOPIC STARTER
Letter sent Dec 10, 2015

Good point, Tom. The only piece of "evidence" I have is a letter signed by their managing director. That's not enough for me. I've sent a letter to their local court demanding opening of collection proceedings (you can do that for clients based in Germany); they will get notice of this in a few days. That should be enough for now.

 
Kirsten Bodart
Kirsten Bodart  Identity Verified
United Kingdom
Local time: 11:03
Dutch to English
+ ...
You assume the opposite Dec 10, 2015

Tom in London wrote:

Kirsten Bodart wrote:

they are bankrupt or are going to go bankrupt if nothing major happens.


An assumption seems to have crept into this discussion that the non-paying agency is insolvent/bankrupt or nearing bankrupcy.

I cannot see any evidence to support that assumption and indeed as the OP said, their name does not appear on the official records.

The only assumption that would be legimate is that these people must be forced to pay.

[Edited at 2015-12-10 11:15 GMT]


Why should every client who doesn't pay be a fraud, through?

There are ways to find out if a company is insolvent or verging on insolvency before you do anything that could harm yourself (as in the costs for fruitless recovery being demanded from you, I think that applies in Germany too).

A signed letter by the managing director means that, if this is not true, he has made a false claim with a paper to prove it. And he is personally liable for false claims. Unless he's not the managing director, but that's easy to ascertain as well (information like this is public, I thought).

At any rate, claiming you are insolvent is hardly good for business, is it?


 
Tomás Cano Binder, BA, CT
Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 11:03
Member (2005)
English to Spanish
+ ...
So... Dec 10, 2015

Magdalena Kowalska wrote:
A German agency I did a few jobs for wants to pay one of my invoices in March next year, for a reason which is completely unclear to me. Apparently this is because the company is in the process of restructuring (in German "Schutzschirmverfahren"), and "due to legal reasons no outstanding invoices sent before November 18, 2015, can be paid until March 2016."

There is one major detail you do not seem to clarify: are they telling you this before you accept the job, or when you have already delivered the job and sent your invoice?


 
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"For legal reasons, we will pay this invoice in half a year"... !!!







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