Extrajudicial collection costs
The reasonable out-of-court costs of recovering an unpaid debt, recoverable from the debtor by law.
Definition
Extrajudicial collection costs are the reasonable expenses a creditor incurs to obtain payment before going to court, such as reminders and debt-collection agency fees. Dutch law allows recovery of these costs as a form of recoverable loss, with the maximum amount for many debts capped by statutory decree (the BIK Decree). For consumer debts a valid reminder (the "fourteen-day letter") is a precondition.
Example
After an unpaid invoice and a valid reminder, the creditor adds the statutorily capped collection fee to the amount claimed.
Why this is a business risk
Many creditors fail to include collection costs in their claims because they are unaware of the statutory entitlement or because they cannot demonstrate that the preconditions, particularly for consumer debts, have been met. The result is leaving recoverable money behind. For debtors, a valid collection cost claim means the final amount owed is materially higher than the original invoice.
How to manage it
- For B2C debt, send a valid fourteen-day letter before claiming collection costs; the letter must meet the statutory content requirements.
- Calculate the capped amount under the BIK Decree for the principal amount claimed, and do not exceed it without a contractual basis.
- Document every collection step with dates: initial invoice, reminder, notice of default and agency instruction. This record underpins your claim.
- Include a contractual collection costs clause in B2B agreements to ensure recovery of actual reasonable costs where the statutory formula is lower.
- Escalate to legal proceedings promptly if extrajudicial collection fails, to avoid the limitation period eroding your claim.
Legal references
Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.
Frequently asked questions
Common questions about this term.