Selling enforcement orders

What is an enforcement order?

An enforcement order is an enforceable document issued as the result of a claim. This could for example be an order to pay. It is in addition the basis on which to execute a foreclosure. Enforcement orders are, among other things, judgements, decisions or writs of execution. Foreclosure is also used to collect an outstanding receivable. It is possible in the framework of a foreclosure to impound certain assets belonging to the debtor and thereby to make payment to the creditor. Before the writ of execution can be carried out, however, a default action is required. If the default action does not lead to the desired result, an enforcement order can be applied for at the County Court. It is useful to instruct a bailiff to proceed further with the appropriate instrument of indebtedness, since he can also carry out the possible requisite seizure. It is also important that the enforcement order accurately describes the content, the type and the scope of the receivable.

Can an enforcement order be sold?

More information for the seller

» This is how it work's
The sale of enforcement orders and instruments of indebtedness is in principle possible. It does not have to come to this if it is decided in advance to sell the receivable. There are certain companies which purchase enforcement orders, instruments of indebtedness or receivables. These can for example be factoring companies which only undertake this task, or perhaps debt collectors, lawyers or banks. These specialist companies buy receivables at any stage, even when a title already exists. However, it is important to note, that the fees for the sale of an enforcement order are considerably higher than those for a transfer of a receivable. The companies purchase the respective title or receivable with the risk of default if they deal with standard factoring. That means that the full risk passes to the company. If an enforcement order is already in place, it is no longer as lucrative for the company as if the receivable had already been sold. Once an enforcement order exists, the solvency or willingness to pay on the part of the debtors is called into question and this involves considerably more expense than if the transfer of a receivable is considered in advance. Nevertheless the sale of an enforcement order is common, and it has a benefit for the former debtor.

Who can sell instruments of indebtedness?

Anyone who has completed a contract with a customer can sell an instrument of indebtedness. As a rule, however is it companies that do so. Large companies have the appropriate staff to carry out all the necessary actions and checks. Small or medium sized companies often do not have this background, and are stretched financially by outstanding invoices and also personally by fees. Thus, it is economical for this size of company to sell an enforcement order. Moreover payment is immediately made by the factoring company and the company once more has money with which to work. Other professional groups, such as for example freelancers, do not have it so easy. In this case they can only turn to a debt collection agency. The basis for a possible sale of an enforcement order is therefore a contract.

Which enforcement orders can be sold?

A large unpaid invoice is always inconvenient for a company. The money is not available. Liquidity can be affected because of this, the credit rating drops and urgently needed investments cannot be made. The default action stresses the company in many ways. If extrajudicial default action does not work, it therefore makes more sense to sell an enforcement order in order to have no further dealings with the matter. Enforcement orders are for example judgements, further legal decisions, litigation and enforceable deeds. In the case of enforcement orders that are sold, these are usually invoices that have not been paid after extrajudicial default action as well as judicial default action. Fourteen days after initiation of a judicial default action a title can be obtained by the relevant Court and foreclosure can take place.

What benefits are offered with the sale of enforcement orders?

The sale of an enforcement order carries considerable benefits. The company that has decided to make the sale is immediately once more solvent following the sale, or the receivables for the invoice no longer exist. Credit rating is retained and the money, necessary for planned investments, is available. The employee of a small or medium sized enterprise, who is often an all-rounder and not a specialist in enforcement, can devote himself to the other interests of the company and is no longer otherwise engaged with this matter. When a sale is decided upon, the outstanding receivables are immediately available, even if not the full amount, since a fee must be paid for the sale. This fee is however economical since, as has already been mentioned, the employee has once more time for other things.  If the costs of the sale of a receivable or an enforcement order are compared with staff costs and other company expenses, it will be noted that a sale of receivables or enforcement orders is worthwhile in every case. In addition it is always an unpleasant situation, dealing with a receivable, when the judicial default action has already taken place. With Debitos, companies can save themselves this work and make direct sales of their enforcement orders.

What does Debitos recommend?

Debitos recommends offering receivables, instruments of indebtedness or enforcement orders for sale on the Secondary Debt Market of Debitos. This platform is the first in Germany that enables both sellers and buyers to meet. Buyers can look here for what they want to buy, and sellers can enter all receivables here, regardless of the phase they are in. They can be entered at a fixed price or at an auction price starting from 1 Euro. The more interesting the offer the seller makes, the sooner it finds a buyer, of course. Only certain sellers are admitted onto the Debitos portal. These are on the one hand factoring companies and debt collection agencies, and on the other hand banks and lawyers. Naturally Debitos services are not available totally free. Debitos charges fees for the chance to sell receivables. These are relatively low, making it worthwhile to register and transfer receivables in this way. The fees are only payable if the sale can be successfully concluded. The charge is 1% if the receivable is only due in the near future or was due recently. If an instrument of indebtedness already exists or Court proceedings have already been filed, the fee amounts to 9% of the proceeds of the sale together with a fixed fee in the amount of 15 Euros. The employees of Debitos are available to answer questions or supply information. You can contact us by telephone, on Chat or by email.