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- Overview: Special protection or debt collection in the Corona crisis
- Protection against debt collection during the Corona crisis – what is changing?
- Which contracts are affected?
- What are the requirements?
- Corona law and debt collection – How (long) can you refuse to perform?
- After the expiry of the law, do I also have to pay the arrears?
- What about dunning and collection costs?
Overview: Special protection or debt collection in the Corona crisis
As a result of the corona pandemic, many people have found themselves in a situation that threatens their existence. Businesses in particular (in gastronomy, accommodation and event companies) are currently unable to pay their liabilities in full and on time. The Corona Act (to mitigate the consequences of the COVID-19 pandemic) protects for the duration of the Corona crisis – also from debt collection.
Protection against debt collection during the Corona crisis – what is changing?
The emergency law to mitigate the consequences of the COVID-19 pandemic in civil, insolvency and criminal procedure law restricts your payment obligations for current contracts for energy, water and telecommunications. For example, if customers are no longer able to pay their energy or water bills or telephone bills due to the Corona crisis, the respective contractual partners may not immediately take action against them through collection agencies or in court – or terminate the contract due to default. So you get a time-limited right to refuse performance, i.e. in fact a deferral of payment .
Which contracts are affected?
The law applies to contracts for basic services such as electricity, gas and telecommunications. Consumers and (in some cases) micro-businesses are favored. Special features apply to rental or loan agreements, support services help in working life – but usually only for employees.
What are the requirements?
If consumers no longer have sufficient funds available as a result of circumstances based on the spread of the infection with the corona virus and it would therefore not be possible for them to provide the service without jeopardizing their reasonable livelihood or the reasonable livelihood of dependent relatives.
Corona law and debt collection – How (long) can you refuse to perform?
You can find a template for the refusal of performance under Downloads , for example . Incidentally, the right to refuse performance is initially limited to June 30, 2020. However, it can by statutory order until 30.9. be extended – which we honestly assume will be the case.
After the expiry of the law, do I also have to pay the arrears?
Yes, the right to refuse performance only provides temporary protection. After the measures have expired, you must expect your contractual partner to demand the outstanding money again. If you don’t pay, you’re in arrears, and your contractual partner can send reminders, call in a debt collection agency, or cancel. This is particularly problematic if you have not paid for electricity, gas, water and telephone contracts in April, May and June 2020. Because then the costs for these months will come to you all at once.
What about dunning and collection costs?
You could legally defer payments until June 30, 2020 – and if the measures were extended until September 30, 2020. So there is no interest on arrears, reminder fees or collection costs for April to June . Because of the legal regulations, you were not in default of payment until June 30th. You can find more information at Finanztip and at BMJV .