The IOS procedure: avoid the courts when recovering undisputed claims

Since 2016, the law has provided for an administrative procedure for the recovery of undisputed and payable monetary debts in B2B relationships. This “IOS procedure” allows companies to obtain an enforceable title without first having to go through traditional court proceedings, and thus constitutes an efficient and time-saving alternative.

After the undisputed nature of the claim and other conditions have been verified by a lawyer, an IOS procedure can be initiated with the bailiff. The IOS procedure consists of four stages.

1. First, the bailiff will serve a demand for payment on the debtor concerned. The demand for payment will also be accompanied by the supporting exhibits and a reply form provided by law.
2. The debtor subsequently has a period of one month to respond by either paying the debt or applying for payment facilities, or by disputing the debt (in whole or in part) by using the reply form. If the debtor disputes the debt, then this marks the end of the IOS procedure and a switch to regular court proceedings.
3. If the debtor does not respond or does not comply with the agreed payment facilities, then the bailiff must issue a declaration of non-contestation after a waiting period of eight days.
4. Thereafter, the declaration of non-contestation is declared enforceable by a magistrate, and so becomes an enforceable title that then allows the bailiff to proceed to execution.

The IOS procedure provides numerous advantages for companies. For instance, the procedure is fast: there is no need to go to court and wait for a judgment. Moreover, the procedure is inexpensive, as no registration fees must be paid on the deeds, and court fees and summons costs are also eliminated. Furthermore, the bailiff can already carry out a thorough solvency check of the debtor during the IOS procedure. As a result, lawyer fees will also be limited.

Nevertheless, the IOS procedure also has some disadvantages. For instance, interest and damages are limited to 10% of the principal amount of the debt and there is no procedural indemnity. Another disadvantage is that the debtor can contest the claim during the IOS procedure and even after the declaration of enforceability, which means the bailiff would then be obliged to discontinue the procedure. In that case, the matter should still be decided in the framework of regular court proceedings.

Since 2018, it is possible to initiate an IOS procedure not only on behalf of creditors registered in Belgium, but also on behalf of creditors that are registered in the Netherlands, France, Germany, Luxembourg, Italy, Spain and Austria. Therefore, if the creditor is registered in one of these seven equated countries, one can still start an IOS procedure provided that their (professional) debtor is established in Belgium. In practice, however, the bailiffs’ system for registering these foreign creditors occasionally encounters ICT-related problems in this regard.

If the debtor is established outside Belgium (but in the EU), there is the possibility of initiating a similar European procedure, namely the European Order for Payment Procedure. Here again, the claim must be a fixed, payable and undisputed claim. This procedure is entirely in writing through a set of standard forms and is applicable in all European member states (except Denmark). A difference with the IOS procedure is that the European Order for Payment Procedure is also open to individuals and consumers, and not only to companies.

There are several options available for the efficient recovery of outstanding monetary debts, including the IOS procedure. Although the IOS procedure offers many advantages, there are inevitably cases where this procedure is not the preferred option or is in fact not possible. In that case, there are other possibilities, such as the European Order for Payment Procedure or obtaining a provisional judgment at the initiation hearing.

In any case, these measures are best combined with additional (conservatory or executive) attachment measures or negotiations.

For further information, please contact Bart Heynickx (bart.heynickx@altius.com) or Charlotte Vandeurzen (charlotte.vandeurzen@altius.com).

Written by

• Bart Heynickx

  Partner