Obligation to reimburse damages caused by late paments

The main principle under German law is that the debtor has to compensate and reimburse the damages caused by the late payment to the creditor and the German Civil Code allows charging a compensation fee (Verzugsschadensersatz) covering for the damage caused to the creditor, and covering for collection costs. 

Debtors have to bear a bunch of fees and default interest

It is not surprising that additionally to the main claim reminder fees for lawyers and past-due interest of 9 % above the respective discount rate according to the German civil code are the most unpleasant surprises for debtors and are considered to be an unexpected penalty.

The legal German interest rate for commercial default debts is considerable higher than all interest rates on the market.

There are cases before the courts where these costs after years of litigation resulted in a much higher amount than the original main claim.

Positions to be claimed from the German debtor

• Main claim

• Statutory default interest

• Legal costs and expenses.