Many expect in 2021 an increasing number of company insolvencies due to corona-related difficulties and structural change.
In 2020, the legislature made an intervention in the value of the receivables of all companies and creditors by halving the debt relief period for insolvent natural persons to 3 years. At the same time, a new law on restructuring and reorganization was created in 2020, which is intended to make it easier for companies to settle debts outside of an existing bankruptcy and insolvency proceedings.
This, too, can result in a future default of claims for the companies that are in business contact with such a company.
For SIE, this also harbors risks in new business in addition to the failure of old receivables: in the future you have to look closely at who you do business with.
AND: THE PAYMENT MORAL IN GERMANY WAS NOT “GOOD” BEFORE CORONA –
IT’S NOT GETTING BETTER NOW.
For 2019, Creditreform determined with an average invoice payment deadline of 21 days in Germany that 23.8% of the total value of the invoices issued by the German companies surveyed had not yet been paid on the due date. This study related to the payment behavior of businesses and consumers.
In Germany there are 10 million consumers who are over-indebted – the number is increasing: Sources: Federal Statistical Office and Creditreform / Atradius, study on payment behavior, October 2019.
No one can foresee exactly how the significantly reduced debt relief period in combination with the economic consequences of the corona pandemic, the new regulations for the restructuring of companies and expanded legal options for the right to refuse performance according to Art. 240 EGBGB will affect – only one thing is clear:
The risk of bad debts will increase.
Attention, precaution and aftercare is therefore required in 2021 –
in short: A WORKING CLAIMS MANAGEMENT.
What can companies, merchants, craftsmen, self-employed etc. do. do for the optimization of receivables management?
- I. Before concluding the contract: research / check
Research, information, questions
- II. Upon conclusion of the contract: protection
–through a secure and specific contract design
– certain retention of title (also extended and extended)
-congruent collateral order upon conclusion of contract and provision of services
– Agree on short payment terms (not 60 days etc.)
- III. After conclusion of the contract: recovery of the claims (sustainable)
-fast billing
– write faster reminders
-Faster titling or out-of-court settlement with judicial logging of the settlement
– Faster, harder enforcement in the event of unwillingness to pay
(Hard enforcement is better than lax payment agreements – since these can even be challenged in the end by avoiding bankruptcy)
-Take advantage of the possibility of preliminary enforcement in the event of unwillingness to pay
(provisional payment ban, arrest, etc.)
Lawyer as a helper for securing claims – and collection
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