Default under § 286 BGB
Under German law, default occurs automatically when an invoice has a calendar-defined due date ("Payable by 15 May 2026") and the debtor does not pay. A reminder is not strictly required, but it is recommended for escalation and as evidence. With consumers, the invoice must explicitly state that default sets in 30 days after receipt (§ 286 (3) BGB). In practice you still send at least one reminder because it documents the communication and properly prepares a later court order for payment. Without a calendar-based due date, you must send a reminder first, default then begins when the reminder is received.
Default interest § 288 BGB
Statutory default interest is: base rate + 5 % p.a. for consumers (B2C) and base rate + 9 % p.a. for businesses (B2B). The base rate is set semiannually by the Deutsche Bundesbank (on 1 January and 1 July); in 2026 it is roughly 3.27 %, yielding statutory interest of about 8.27 % (B2C) or 12.27 % (B2B) p.a. Formula: open amount × rate × overdue days / 365. Our generator calculates this day-accurate.
The 3 reminder stages in practice
Stage 1 is a polite payment reminder with no late fee and no default interest, you treat the customer as if they simply forgot. Stage 2 is a firm reminder with default interest, late fee and a 14-day deadline; it points out the default for the first time. Stage 3 is the final reminder with a 7-day deadline and an explicit threat of court order or collections. German law does NOT require 3 reminders, once default is established, a single reminder is legally sufficient to sue. The 3-stage practice gives the customer a fair chance and preserves the relationship.
Late fees, what is allowed?
Only the actual costs incurred (postage, paper, printing) can be reimbursed. Courts typically accept 2.50-5.00 € per reminder; flat 10 € fees are regularly cut. Important: a late fee can only be charged from the 2nd reminder onward, because the 1st reminder is what triggers default (unless default has already occurred via calendar due date). In B2B, the additional 40 € flat compensation under § 288 (5) BGB applies, once per outstanding claim, only if the debtor is a business.
Collections & court order for payment
If the debtor does not respond after the 3rd reminder, you have two reasonable paths: 1) Collections agency, fast, sends its own reminders with significant pressure, can initiate court steps; you typically receive 60-80 % net. Costs can be partially passed on to the debtor. 2) German court order for payment (Mahnverfahren) via www.mahngerichte.de, cheap (from ~36 € court fees depending on amount), produces an enforceable order in 2-4 weeks. Upon objection, it switches to a regular suit. For amounts under 5,000 €, the court order procedure is usually the most economical option.
Limitation period, 3 years
Most claims become time-barred after 3 years (§ 195 BGB), starting at the end of the year in which the claim arose (§ 199 BGB). An invoice from May 2026 thus expires at the end of 2029. Reminders alone do NOT suspend the limitation period, only court action (court order, lawsuit) or a written acknowledgment of debt does. Practical takeaway: escalate quickly after stage 2 or 3, don't wait for years. Once the 3-year limit lapses, the debtor can simply invoke the limitation defense and you lose your claim.
