A problem that many businesses, individuals and other organisations face is late payment. This is a circumstance in which a debtor refuses to pay a creditor on time and violates established payment terms.

If the money is not provided on time, the creditor can get into financial difficulties. If the agreed payment terms are not met, the debtor can also get into trouble.

Table of contents

I. What is default of payment according to the BGB?
II. What conditions must be fulfilled for a delay in payment to occur?
III What is the current legal position on the subject of late payment?
IV. How can you avoid late payment?
V. What are the legal consequences of late payment?
VI. What is an example of late payment in online trading?
VII. Late payment for profit distribution in online trading: Is this fraud?
VIII. What measures can sellers take against late payment?
IX. When does a default in payment occur in a rental agreement?
X. At what point is termination of the lease without notice permissible in the event of default in payment?
XI. When should a lawyer be consulted when it comes to late payment?

What is default of payment according to the BGB?

According to the BGB, payment default occurs when a debtor is unable to make his contractually owed payments on time. According to Section 286 of the German Civil Code (BGB), a default occurs when a payment is overdue and the debtor has not made it.

The debtor is then obliged to satisfy the creditor’s claim by paying damages. This covers the additional costs incurred by the delay in payment as well as the interest on arrears that the creditor receives.

What conditions must be met for a default to occur?

For a default to occur, a number of conditions must be met. First and foremost, the debtor must have an obligation to perform. In addition, the due date of the liability must have already passed.

The debtor must also have failed to make the payment on time. In this case, there is a default in payment. There is no default of payment if one of the aforementioned conditions is not met.

What is the current legal situation regarding late payment?

It is of crucial importance to know the existing legal framework in the event of a default in payment. According to the German Civil Code (BGB), the parties are obliged to provide each other with the services specified in the contract.

A delay in payment occurs when one party to the contract does not fulfil its obligation, e.g. does not make the agreed payment. According to § 286 BGB, the creditor can claim damages from the debtor in this situation.

Furthermore, according to 288 BGB, the creditor can also send reminders in order to assert his claims. According to 288 BGB, the creditor can even file a lawsuit to collect his claims if the debtor continues to refuse payment.

In addition, the creditor has the option of asserting his claims in court. The creditor is then entitled to payment of the entire amount owed by the debtor plus interest according to 291 BGB.

To avoid unwanted results, it is important that both the creditor and the debtor know the existing legal situation. Therefore, it is advisable to speak to a lawyer to find out about all rights and obligations in the event of late payment.

How can late payment be avoided?

The debtor must comply with all agreed payment deadlines in order to avoid default. This includes respecting the agreed payment deadline, the accepted payment method and the agreed terms for VAT, duties and interest.

In addition, the debtor must ensure that the negotiated payment terms are reasonable and fair and that the accepted payment methods are safe and reliable. There are some strategies that companies can use to avoid late payments.

  • One method is to set up a system to monitor payment terms and notify companies when payments are late.
  • Another strategy to avoid late payments is to set up an instalment payment plan.
  • A dunning system that sends reminders to the debtor if they do not make their payments on time is another option.

Late payments can cause financial difficulties for all parties involved, so it is important that businesses, individuals and other organisations avoid them.

Businesses can avoid late payments by sticking to set payment deadlines and setting up a system to track payment deadlines.

What are the legal consequences of late payment?

Because of the potential consequences, late payment is an important legal matter to deal with. Late payment occurs when one party fails to pay another on time. For the debtor, late payment can have legal consequences.

Late payment is primarily a breach of the terms of the contract. A debtor is responsible for the consequences if he does not pay on time. This may mean that he has to pay the creditor a fine or some other kind of compensation. The amount of the penalty and compensation is specified in the contract.

In addition, late payments may be subject to civil or criminal penalties.

To recover payment, the creditor can go to court. In extreme cases, an injunction may be sought to force the debtor to pay. In extreme cases, late payment can lead to criminal consequences.

Late payment is a significant legal problem that should not be taken lightly. To avoid criminal consequences, all parties should fulfil their obligations.

When late payment occurs in online trading

For the investor involved, it can be extremely distressing when a broker fails to pay out. To file a lawsuit and get your money back, there are several steps you can take.

  • Talk to the broker: First, try to talk to the broker directly to find out the cause of the delayed payout. It could be a simple technical problem or a delay that needs to be fixed. But be careful: as soon as he demands further deposit from you, threatens or insults you, cut off communication and contact a lawyer as well as the police.
  • Inform the supervisory authority: You should contact the competent supervisory authority if the broker refuses or if something does not seem right to you. In Germany, the Federal Financial Supervisory Authority, or BaFin for short, is responsible.
  • Legal steps: If none of the other options work, you can file a lawsuit with the help of a lawyer to back up your claims. It might be advantageous to hire a lawyer with knowledge of financial law, banking and capital market law, online trading as well as fraud.

You will need to act quickly as there may be time constraints in certain circumstances. If you believe your claims are at risk, you should act promptly.

Late payment for profit distribution in online trading: Is this fraud?

In online trading, a delay in the payment of profit distributions can be a sign of fraud. It is crucial that you as an investor should be sceptical if you are waiting in vain for a profit distribution.

Several factors can cause a profit distribution to be delayed. When and how profits can be distributed is subject to strict regulations at some brokers. Others postpone the payout in order to increase their earnings.

It is important to remember that a delay in payment is not always a sign of fraud. However, some brokers try to deceive their clients by delaying or refusing to pay out profits. If you observe such behaviour, you should report it immediately to the relevant supervisory authority.

To reduce this danger, investors should make sure that their broker is reliable and licensed. A reliable and open trading platform is something that reputable brokers always try to offer their clients. They must also be able to deal with any complaints promptly and effectively.

You should speak to an experienced broker and thoroughly familiarise yourself with the different brokers before deciding to trade in the forex or stock market. Familiarise yourself with the different trading platforms to get the best possible trading experience.

In addition, investors and traders should always cash out their winnings as soon as possible. This can reduce the risk of being scammed or deprived of their profits.

In summary, a delay in the distribution of profits in online trading can be an indication of fraud. Other indications are alleged taxes, commissions or proof of liquidity to which the broker attaches the payout.

What measures can sellers take against late payments?

There are several measures that sellers can take to avoid late payments.

  • First, the sale and payment terms should be in writing. The contract should specify the due dates for payments, the deadlines for payments and the penalties for late payments.
  • In addition, sellers must ensure that they receive all documents required for payment. This includes invoices, delivery notes and other important documents.
  • It is also a good idea to request payments frequently and in advance. To increase the chances of on-time payment, sellers can also send payment reminders.
  • To enforce debts, sellers can also work with a collection agency. To enforce late payments, they can also consider a dunning procedure.
  • Finally, sellers can check a potential customer’s creditworthiness before signing a contract. This can reduce the likelihood of threats.

When does a lease go into default?

A lease is in default if the rent is not paid within the specified time frame. If the rent is not paid on time, the landlord may be able to terminate the tenancy immediately.

The tenant can take various measures to prevent default.

  1. Possible financial problems that make it impossible for them to pay the rent on time should be communicated to the landlord.
  2. Another option is to agree on an instalment payment plan so that you can pay the rent every month.
  3. Tenants can also try to take out a loan to cover their rent or explore other options.
  4. Finally, tenants and landlords can enter into a binding contract that extends the period for paying rent.

If none of the above is successful, tenants can consult a lawyer to find out more about their rights and obligations in relation to the lease.

At what point is it permissible to terminate the tenancy agreement without notice in the event of late payment?

Only when the tenant is at least two months in arrears can the tenancy agreement be terminated without notice due to late payment. The landlord is obliged to inform the tenant in writing about the delay in payment after the expiry of the two-month grace period and to set a final deadline for payment.

If the tenant has still not paid after the expiry of this period, the landlord can terminate the tenancy without notice.

When should a lawyer be consulted about late payment?

It is highly recommended to consult a lawyer when it comes to late payments.

A lawyer can help you understand all the legal implications and determine the appropriate course of action to try to get paid. If no other options are available, the lawyer can also help you find a suitable strategy to force the debtor to pay.

In any case, a lawyer can ensure that your rights are respected and that all proceedings are legal. Unpunctual payments are a major problem faced by many businesses. If a consumer does not pay on time, the business can get into serious financial trouble.

Therefore, it is crucial for businesses to properly inform their customers of their payment obligations and give them enough time to settle the debt. In any case, it is important that companies take all precautions to avoid defaulting on payments.

If you, as an investor, are suffering from late payments in that the broker is refusing to distribute profits or is postponing them for flimsy reasons, we will be happy to provide you with an initial free legal consultation.

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