What is a titled claim
A titled claim is based on the lawful judgment of a competent court. It is considered to be one of the last stages before an order for payment procedure and presupposes that all previous attempts at an amicable and out-of-court settlement between creditor and debtor have failed. The court appoints a bailiff to enforce the claim. The latter can use the title to visit the debtor on account of financial arrears and take initial action. The debtors concerned can avert the measures by repaying the claims in full or at least in part as quickly as possible. A creditor thus secures the possibility of recovering the claim at a later date if no acute financial compensation is achieved. In rare cases, creditors take back valuables that they have contractually transferred to the debtor. These are movable goods such as vehicles or fixed values such as real estate.
A title for eternity
The creditor must first take all extrajudicial measures to recover his claim. If the claim is unsuccessful, the court can appeal to the competent local court to assert its claim. The competent court has the task of examining all previous transactions and the credibility of the claim. If there is no doubt as to the justification of the claim, the court shall issue a titled claim. The creditor is also obliged thereafter to initiate all further steps up to the dunning procedure if the latter continues to pursue the settlement of the debt. The Local Court will take action from now on, provided that the creditor does not deviate from his claim. The title is valid for 30 years. This means that the creditor checks the debtor’s finances on a regular basis during this period. I can’t let you. The verification must be carried out by a judicial officer who contacts the debtor.
The biggest error of many debtors, that the debt expires after this period, often leads to confusing statements. The legislator clarifies with § 197 paragraph 1 half sentence 2 BGB that only under certain conditions the period ends automatically after this period. If the enforceable claim is acknowledged by the debtor during this period and is initially repaid by an instalment, the period shall begin anew from this point in time. This is also the case when a bailiff starts the collection process. It is sufficient for the debtor to visit the debtor and have him sign his collection attempt.
Forfeiture occurs only if the creditor waits too long with the first demand for payment (reminder) or leaves the titled claim unaffected for ten years. In this case, case law assumes that the creditor no longer has an interest in enforcing the claim. The titled claim then remains valid until the end of the period, but can no longer be enforced by the creditor.
Titled claim – further measures against a debtor
Creditors often try to enforce their titled claim with a debt collection agency. There are different views on who has to pay the collection costs. The courts take the view that the creditor has other possibilities and that an additional external service for enforcement is the responsibility of the creditor and not of the debtor. Debtors therefore do not have to recognise claims from debt collection agencies.
The creditor may subsequently enforce enforcement measures such as eviction, attachment of accounts and attachment of wages.
Debtors who do not recognise a claim should seek legal advice. Creditors often do not respond to letters from debtors, if these are not created by a legal representation.