Formal notice to pay: what is it?
To recover a debt, most companies first favor amicable approaches: telephone reminders, emails, or amicable reminder letters. These actions often resolve the situation without entering into a legal process.
However, when the customer persists in not paying their invoice despite several reminders, it becomes necessary to take a more decisive step. This is when the formal notice to pay comes into play.
A formal notice for an unpaid invoice is a legal document that formalizes the request for payment. It takes the form of a written letter addressed to the debtor to require them to pay the amount due within a specific timeframe. It marks a departure from informal reminders: it is no longer a simple request but an official summons.
In practice, the formal notice constitutes the final warning before legal action. It plays an essential role in the
recovery procedure since it allows the creditor to demonstrate, in the event of a dispute, that he or she has made every effort to obtain an amicable settlement.
How to write a formal notice to pay ?
A formal notice must contain several mandatory details to be valid. These elements guarantee its legal status and prevent any dispute from the debtor.
Here are the mandatory information :
- The full contact details of the debtor (recipient),
- The full contact details of the creditor (sender),
- The mention “formal notice”,
- The date of the formal notice letter,
- The request (to be paid)
- The payment period granted (it must be precise and reasonable, for example 10 days).
- The creditor’s signature.
It is possible to use a debt collection agency to send a formal notice. In this case, the following information must also appear :
- Contact details of the debt collector ;
- Supporting documents and detailed amount of the sum due ;
- Payment terms ;
- Paragraphs 3 and 4 of Article 32 of the law of July 9, 1991.
All of these details are mandatory for your formal notice to be valid. Failure to comply will result in the formal notice being considered null and void. A fine of up to €1,500 may also be imposed.
How to send the formal notice to pay ?
A formal notice to pay can be sent without any specific deadline. However, it is recommended to allow a reasonable period of time, which is generally 30 days.
There are several ways to send a formal notice to pay.
By summons
You can appoint a bailiff to serve the debtor with a summons to pay.
This official act reinforces the formal notice and exerts additional pressure, because it comes from an authority authorized to initiate forced recovery measures.
This method represents a certain cost, we advise you to apply it for large amounts.
By registered letter with acknowledgment of receipt
Registered mail with acknowledgment of receipt is ideal for small claims and allows you to keep track of the sending and receipt of the formal notice.
By the contract
In some contracts, a clause provides that the debtor is automatically put on notice as soon as payment becomes due.
In other words, once the payment deadlines have passed, no formal reminder is necessary: the debt becomes immediately due and payable and the creditor can take legal action without having to issue a prior formal notice.
What to do after a formal notice to pay ?
A formal notice to pay is the final step before legal action. When all amicable attempts have failed and the debtor still refuses to pay their debt, several options are available to you.
Payment order or simplified procedure
The payment order or simplified procedure allows the company to bring the matter before the court by filing a complete file in order to obtain a decision that forces the debtor to pay his debt.
This quick and simplified procedure offers an effective way of debt recovery without going through a traditional trial. This solution is possible for debts under 5,000 Є.
Provisional referral
The interim relief procedure allows the company to apply to the court to obtain immediate payment of a sum on an interim basis. During this procedure, the creditor and the debtor are summoned to a hearing, where the judge decides whether the debtor must pay all or part of the debt before the final judgment.
Summons for payment
The company initiates traditional legal proceedings to obtain payment of its debts, a process that is longer and more costly than simplified procedures, but necessary when other remedies have failed.
CentralPay: a solution to facilitate amicable recovery
CentralPay makes it easier to collect your invoices thanks to a complete solution for automating, collecting and processing your tasks (reminders, reconciliation, ERP updates, etc.).
You no longer waste time contacting your customers: CentralPay takes care of it automatically, allowing you to secure your cash flow and focus on your business.
