Debt has the capacity to turn lives upside down and sometimes debts are incurred without the person’s knowledge. Campaigners say that Belgium’s debt policy is unfair and have actively sought to change the rules.
Consumer organisations have been fighting against over-indebtedness and campaigning for fairer rules in debt recovery. Now, with the support of Justice Minister Vincent Van Quickenborne, their advocacy has culminated in significant legislative changes that take effect on 1 September, 2023.
Imagine a student who finds a parking ticket of €40 stuck to his car windshield after leaving it in a parking lot for four hours. Frustrated, he tosses the ticket onto the passenger seat, intending to deal with it later but eventually forgets. Weeks later, a reminder arrives, inflating the original fine to potentially three times the amount. Such a financial hit could be more than just an inconvenience—it could be a disaster.
To avoid this, and prevent predatory and aggressive practices by bailiffs and lenders, new regulation will protect Belgians from surprise debts and unfair payment schemes.
Grace period and fixed fees
Starting from September, if debtors have not settled a bill on time, they can expect to receive a first reminder without any extra charges. Belgians will soon be granted a 14-day grace period to settle the debt, during which no additional penalties can be added. However, it's worth noting that the 14-day countdown differs depending on the mode of the reminder's delivery: it starts on the third working day after sending for physical mail, but from the next day for emails.
While the new framework becomes operational from 1 September, it's important to note that the new rules only apply to contracts signed after this date. For existing agreements made before 1 September, the new regulations become applicable starting December 1, 2023.
Should debtors fail to meet the 14-day deadline, they will receive a second notice. This time, however, additional fees will be incurred, capped at €7.5 plus postage. There may be other charges, but these too are regulated, making it less likely for creditors to exploit the situation.
The additional fees that lenders can charge will depend on the size of the debt. If the owed amount is €150 or less, any extra charges cannot exceed €20. For debts ranging between €150 and €500, an additional fee of €30 plus 10% of the owed amount can apply. For debts over €500, Belgians will soon be hit with a 65 euro fee plus 5% of the debt amount, capped at €2,000.
Last recourse
After the first reminder, creditors have the option of engaging a debt recovery agency or a bailiff specialised in amicable debt recovery. These professionals will then issue another 14-day notice for you to settle the amount due.
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If Belgians still cannot pay, they will be left with three options. They can request a written payment plan from the debt recovery agency or bailiff, seek assistance from a debt mediation service, or contest the debt in a reasoned manner. In all these scenarios, recovery actions are halted until a decision is made.
Failure to address the debt will lead to judicial recovery, at which stage the stakes are significantly higher. Additional, more substantial fees will be incurred, and unless the debtors win their case, they might even face asset seizure to cover the debts.
The new legislation comes as a welcome change, especially for vulnerable individuals like students juggling multiple jobs or retirees living on fixed incomes. With its fairer and more transparent rules, the new framework aims to lessen financial stress and provide a more balanced approach to debt recovery.
