Debt collection in France

Debt collection on behalf of third parties is a regulated activity in France under Art. R124-1 ff. of the Code des procédures civiles d’exécution.

Collection agencies must register with the public prosecutor (procureur de la République), maintain professional liability insurance and keep clients’ funds in a separate account. Once court proceedings begin, legal work is handled by qualified French lawyers (avocats) and judicial officers (commissaires de justice).

Oddcoll works with an experienced local partner that complies fully with all French regulatory requirements.

Commercial debts in France generally become statute-barred after five years. Under Article L110-4 of the Commercial Code, the limitation period begins when the creditor knew, or should reasonably have known, the facts giving rise to the claim. The same five-year period also appears in Article 2224 of the Civil Code.

It’s important to act before the deadline expires. Sending payment reminders alone doesn’t stop the limitation period. However, legal proceedings, enforcement action or the debtor’s written acknowledgement of the debt will interrupt the time limit under Articles 2240 to 2244 of the Civil Code.

French law imposes strict payment rules for business-to-business transactions. These are actively enforced by the DGCCRF, which can impose administrative fines for non-compliance.

• Maximum payment terms. Businesses cannot agree payment terms longer than 60 days from the invoice date. Alternatively, they may agree payment within 45 days from the end of the month in which the invoice was issued. Any longer payment period is unlawful under Article L441-10 of the Commercial Code.
• Statutory late payment interest. Late payment interest starts automatically the day after the payment deadline passes (no reminder or formal demand is required). If the contract specifies an interest rate, it must be at least three times the legal interest rate. Otherwise, the statutory rate applies, calculated as the European Central Bank reference rate plus 10 percentage points. This is one of the highest statutory late payment rates in the European Union.
• Fixed recovery costs. For every overdue invoice, creditors are automatically entitled to claim a fixed recovery fee of 40 euros under Article D441-5 of the Commercial Code. Where collection costs exceed this amount, additional reasonable and documented expenses may also be recoverable.

A mise en demeure is the formal notice that places a debtor in default. It’s usually sent by registered post with acknowledgement of receipt or served by a commissaire de justice, in accordance with Article 1344 of the Civil Code.

Although statutory late payment interest accrues automatically in commercial cases, sending a mise en demeure remains standard practice before court action. When served by a commissaire de justice, it often encourages payment by demonstrating that legal proceedings are likely to follow.

The injonction de payer (Art. 1405 ff. Code de procédure civile) is a fast and cost-effective procedure widely used to collect unpaid business invoices in France.

For commercial claims, the application is submitted to the tribunal de commerce where the debtor has its registered office.

The process is straightforward:

1. The creditor files an application together with supporting documents, such as the contract, invoices and mise en demeure.
2. The judge reviews the documents without holding a hearing.
3. If satisfied, the court issues an order for payment.
   The order is served on the debtor by a commissaire de justice.
4. The debtor has one month to challenge the order. If no objection is filed, the order becomes an enforceable title.

Because the procedure is document-based and relatively inexpensive, it is particularly effective for undisputed commercial debts. If the debtor objects, the matter proceeds through the normal commercial court process.

Most disputes between businesses are heard by the tribunaux de commerce. These specialist commercial courts are staffed by elected judges drawn from the business community.

Claims involving individuals or non-commercial parties are generally heard by the tribunal judiciaire. In most cases, proceedings are brought before the court where the debtor has its registered office.

French commercial courts are generally considered efficient by European standards. Legal representation is not always compulsory before the tribunal de commerce, although businesses usually instruct legal professionals in practice.

Once a creditor has obtained an enforceable title, enforcement is carried out by a commissaire de justice. French law provides several effective enforcement measures, including:

• Attachment of bank accounts and receivables (saisie-attribution)
• Seizure and sale of movable assets (saisie-vente)
• Wage garnishment, subject to court authorisation (saisie des rémunérations)
• Enforcement against real estate for higher-value claims (saisie immobilière)

One of the most effective enforcement tools is the attachment of bank accounts. Through France’s national FICOBA register, a commissaire de justice can identify the debtor’s bank accounts, making enforcement faster and significantly improving the chances of successful debt recovery.