Creditors in France: what to do when faced with payment failure

Creditors receiving payment
If you’re an entrepreneur, there’s always a risk that you’ll be faced with a debtor that doesn’t pay you. It can definitely be a tricky situation for a creditor to deal with, so it’s important to know what to do in these situations.

Resolving payment failures with French creditors

If you’re an entrepreneur, there’s always a risk that you’ll be faced with a debtor that doesn’t pay you. It can definitely be a tricky situation for a creditor to deal with, so it’s important to know what to do in these situations.

What does the debtor risk?

  • Having to pay penalties of delay: these are simply penalties for being late in paying. Generally, these are defined in the contract.
  • Paying the creditor’s recovery costs: for a creditor, going after a client who doesn’t pay them can cost both tie and money. As such, the debtor can end up having to pay back damages to the creditor as a result.
  • Having to pay a fine: if it’s an individual, the fine can go up to 75 000€, and if it’s a company, it can be up to 375 000€! And even then, these sums can be doubled in certain conditions!

What can the creditor do?

  • Reminding the debtor: calling your client to remind them that they’re late in paying is often enough to have them pay you. Keep in mind that you can’t pressure them into paying you yet, though. Calling them can only serve as a reminder.
  • Sending a formal demand to the debtor. It’s at this moment that the law will consider that the debtor is late in paying. In other words, this is the first action you can make that has legal consequences.
  • Starting the procedure to recover your debt. This is when the company will be forced to pay you. In this case, the first thing you need to do is file an order for payment.

As such, entrepreneurs always have ways to force their clients to pay them. Though, of course, if you can make them pay before going to court, it will allow both parties to save both time and money!

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