Contractors' Questions: How to chase debt in Belgium?

Contractor's Question: An IT recruitment agency's lacklustre approach to paying contractors on its books leads to me believe I will soon be personally chasing unpaid invoices in Belgium. In the UK, I would normally write a letter affording the client a 14-day period before legal recourse, and perhaps enlist an online solicitors firm to help. If that were to fail, I would start a claim via an agency on the web. But that's my approach in the UK, what would be the equivalent course of action, or a better route altogether, in Belgium?

Expert's Answer: You should make the same considerations, and conduct the same 'due diligence' tests that supplying a company in the UK calls for. Any EU country can be hazardous to a UK contractor's financial health, should the contractor fail to check the financial pulse of a company before engaging them as a customer, or neglect to put their desired payment terms and conditions in place.

So the debt recovery actions you take in the coming weeks relating to your overseas contract can be exactly the same as those you would pursue if the contract was inside the UK. That said, upon the issuing of a judgement in the UK solicitors can apply for a European Enforcement Order, which can be lodged with a court in Belgium for enforcement.

However this is not achievable in a few mouse clicks and is unlikely to be a cheap exercise. Moreover, debtors overseas are more likely to take notice of a debt recovery expert in their own country. Having a local agency demanding payment in their own "backyard" is just harder for debtors to ignore than an email, potentially written in a second or foreign language, which they might claim they never received. This explains why we would call on our foreign affiliates in your situation. The added trick here is that, because our partners are often local credit ratings agencies, debtors tend to move quickly, worried about being marked downwards over the non-payment.

If you do opt for this route, ensure that the debt recovery firm operates its overseas affiliates on a 'no-collection no-commission' basis and has collection systems that work throughout Europe. Finally, don't believe the recovery firm if it claims to need numerous details from you, or your company, to start the process. A typical quote for a freelancer can be drawn up knowing just three elements - the age of the debt, its value and its location.

The expert was Sid Home, managing director of Safe Collections, a debt recovery and credit reporting agency.

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