German Court Rules Debtors Must Cover Collection Agency Costs

A new ruling reshapes debt collection in Germany, forcing debtors to foot the bill. Why this decision could stabilize consumer prices and cut societal costs.

, and Administrator

2025 November 14 . 1:01 AM

1 min read

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German Court Rules Debtors Must Cover Collection Agency Costs

The Federal Court of Justice (BGH) in Germany has clarified debt collection rules. In a recent ruling, the court stated that debtors must cover collection costs, regardless of the creditor's direct payment or agreements between parties.

The BGH ruled that debtors are liable for reimbursing debt collection agency fees, even if the creditor and collection agency are affiliated companies. This obligation stands regardless of whether the creditor pays the agency's fees directly or immediately.

Effective debt recovery, as supported by this ruling, helps maintain low societal costs of payment defaults and contributes to stable consumer prices. The decision provides legal certainty for creditors and legal service providers, ensuring clarity and transparency for debtors.

The BDIU, representing German debt collection agencies, has welcomed the BGH's decision. They believe it endorses their business practices and refutes unfounded allegations about inflated fees.

The BGH's ruling clarifies debt collection rules, benefiting creditors, debtors, and collection agencies. It promotes efficient debt recovery, reduces societal costs, and ensures transparency for all parties involved.