Glossary of debt collection

Amicable recovery encompasses all the steps taken by a creditor to obtain payment of a debt without going to court. It is the mandatory first stage before any judicial proceedings. Actions include reminders by email, SMS, phone calls, registered letters and formal notice. The French Code of Civil Enforcement Procedures (art. L111-8) strictly regulates these practices: no harassment, respect for contact hours, clear information to the debtor. In France, amicable recovery resolves the majority of unpaid debts when initiated quickly. AI solutions like GetBill automate this phase, closing 40 % of cases without human intervention.
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Judicial recovery comprises the legal procedures brought before a court to compel a debtor to pay, after amicable recovery has failed. The main routes are the payment order, summary proceedings (interim payment) and full court action. The creditor must prove that the debt is certain, liquidated and due. An enforceable title is required to proceed with forced execution through a bailiff. Timelines range from a few weeks to several months, and costs include court fees, legal fees and service charges. Automating the amicable phase with AI significantly reduces the need for judicial proceedings.
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A formal notice is a written demand sent to the debtor requiring payment of a debt within a specified timeframe, constituting a mandatory prerequisite before any court action (article 1344 of the French Civil Code). Sent by registered letter with acknowledgment of receipt or by bailiff, it triggers late payment penalties and marks the starting point for calculating damages and interest. It must state the amount owed, the payment deadline and the consequences of non payment. Automated reminder solutions include sending registered letters within their multichannel scenarios.
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A payment order (injonction de payer) is a simplified court procedure for quickly obtaining an enforceable title for a debt that is certain, liquidated and due. The creditor files a petition with the relevant court (civil or commercial depending on the nature of the debt) without a hearing. If the judge grants the application, they issue an order for payment. The debtor has one month to file an objection. Without objection, the order becomes enforceable. This procedure is particularly suited to undisputed debts, with court fees ranging from 30 € to 70 €.

An enforceable title is a legal document that authorizes forced execution of a debt by a bailiff. Listed in article L111-3 of the French Code of Civil Enforcement Procedures, enforceable titles include court decisions (judgments, orders), notarial deeds and approved agreements. Only a bailiff can carry out forced execution: bank account seizure, wage garnishment, asset seizure. Obtaining an enforceable title is the end goal of judicial recovery. AI driven amicable recovery aims precisely to resolve unpaid debts before this costly stage.

The fixed recovery fee is a flat amount of 40 € owed automatically by any business debtor for late payment of a commercial invoice (article L441-10 of the French Commercial Code). It applies automatically from the first day of late payment, without any prior formal notice. This fee is due for each overdue invoice and is cumulative with late payment penalties. If actual recovery costs exceed 40 €, the creditor may claim additional compensation with supporting evidence. This provision applies only to B2B transactions between businesses (commercial receivables).

The statute of limitations on a receivable is the legal deadline beyond which a debt can no longer be recovered through the courts. Under French law, this period varies by type of debt: 2 years for civil receivables (article L218-2 of the Consumer Code) and 5 years for commercial receivables (article L110-4 of the Commercial Code). The limitation period can be interrupted by an acknowledgment of debt, a formal notice or legal action. Once expired, the creditor permanently loses the right to take the matter to court. This is why automating reminders from the first day of late payment is crucial.

Late payment penalties are interest charges applied automatically when payment is received after the due date of a B2B invoice. The minimum legal rate is set at 3 times the legal interest rate (article L441-10 of the French Commercial Code). They are payable without any prior formal notice, from the day after the due date. The applicable rate must appear in the general terms and conditions and on every invoice. Late payment penalties are cumulative with the 40 € fixed recovery fee. A fast, automated reminder policy reduces the amount of penalties for the debtor while accelerating collection.

DSO (Days Sales Outstanding) measures the average number of days it takes to collect a receivable after the invoice is issued. Calculated as (trade receivables / revenue) × number of days, it is the key indicator of collection efficiency. In France, the average DSO is approximately 44 days (Euler Hermes, 2024). A high DSO signals a cash flow problem and increased working capital requirements. Every day shaved off DSO frees up cash. AI powered automated reminder solutions reduce DSO by triggering follow ups from the very first day of late payment.
The 5 KPIs of debt collection →

An aging balance is a financial dashboard that classifies customer receivables by how long they are overdue, typically in 30 day brackets (0 to 30, 31 to 60, 61 to 90, 91 to 120, 120+ days). It allows finance teams to visualize the distribution of unpaid debts and prioritize collection actions. The longer a receivable ages, the lower the probability of recovery: the recovery rate drops from 90 % at 30 days to under 50 % beyond 90 days. The aging balance feeds directly into automated reminder scenarios and provisioning decisions.
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Working capital requirement (BFR in French) is the amount of cash needed to cover the gap between customer receipts and supplier payments. Calculated as: inventory + trade receivables − trade payables. Unpaid debts directly increase working capital by inflating the trade receivables line. A high working capital requirement forces the company to seek external financing (overdrafts, factoring) which erodes profitability. In France, late payments represent on average 16 billion euros of missing cash for SMEs (Payment Terms Observatory). Reducing unpaid debts through automated reminders mechanically improves working capital.

The recovery rate measures the percentage of total receivables actually collected over a given period. It is the central KPI for evaluating the effectiveness of a collection strategy. Calculated as: (amount collected / total receivables) × 100. The recovery rate declines rapidly over time, hence the need to act fast. Conversational AI solutions like GetBill achieve a 40 % case resolution rate without human intervention, thanks to multichannel automated reminders and real time payment plan negotiation.
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A civil receivable is a debt owed by an individual to a business or another individual. Typical examples include unpaid rent, insurance premiums, telecom subscriptions and loan installments. Consumer protection law applies (Consumer Code), with a 2 year statute of limitations. Collection practices are strictly regulated: no abusive contact, mandatory information disclosure, respect for privacy. Situations of financial hardship (overindebtedness, housing assistance) must be detected and referred to support programs.
Debt recovery for social landlords →

A commercial receivable is a debt arising from a transaction between two businesses (B2B invoice), governed by the Commercial Code with a 5 year statute of limitations. Payment terms are regulated by law: 30 days from receipt or 60 days from invoice issue. In case of late payment, late payment penalties and a 40 € fixed recovery fee apply automatically. Commercial receivables can be assigned (factoring) or insured (credit insurance). AI powered automated reminders speed up collection while preserving the business relationship.

Overindebtedness is a situation in which an individual is manifestly unable to meet all of their non professional debts. The treatment procedure, governed by the Consumer Code (articles L711-1 and following), is managed by the Banque de France through regional overindebtedness commissions. The debtor can file a case which, if accepted, freezes all creditor proceedings. The commission proposes a recovery plan (rescheduling, rate reductions, partial write offs). In 2024, the Banque de France processed approximately 120,000 cases. AI powered collection tools must detect these situations and direct the debtor to support programs.

An AI collection agent is an artificial intelligence system capable of autonomously conducting multichannel unpaid debt collection campaigns. Unlike a simple decision tree callbot, a conversational AI agent understands natural language, adapts to the debtor's responses, negotiates payment plans and sends secure payment links in real time. The AI agent schedules calls during peak answer rate time slots. The GetBill AI agent achieves an answer rate comparable to human calls, with less than 1 % hang up rate, thanks to deep case contextualization. The debtor is always informed they are interacting with an AI system, in compliance with the European AI Act.
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A callbot (or voicebot) is a voice conversational robot capable of making and receiving phone calls using natural language. In debt collection, it automates outbound reminder calls and inbound calls from debtors wishing to settle their accounts. First generation callbots use decision trees with predefined responses. Next generation conversational AI agents use advanced language models to hold real conversations: context understanding, emotion detection, tone adaptation, payment plan negotiation. The key difference: a callbot follows a script, an AI agent understands and adapts.
Guide: AI agent vs callbot →

The debtor portal is a secure online space where the debtor can view their situation, request a payment plan and make a payment independently, 24/7. White labeled in the creditor's branding, it eliminates friction: the debtor does not need to call or wait for an advisor. It offers multiple payment methods (credit card via Stripe, Axepta BNP, CIC Monetico or Scellius) and can be multilingual. The GetBill portal is accessible via a secure link sent by SMS, email or during an AI call. It reduces payment times by offering permanent self service access, with integrated electronic signatures for payment plans.
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Automated reminders are a sequenced series of follow ups sent to a debtor according to a predefined schedule, without human intervention. A typical scenario includes several progressive waves: email reminder at D+3, SMS at D+7, AI call at D+10, registered letter at D+15, then escalation to legal proceedings. Each step can be configured based on the debtor's profile, the receivable amount and the industry. Intelligent AI driven reminders automatically adapt the channel, timing and tone based on the debtor's behavior (email opens, call answer rate, portal visits).
Multichannel reminder scenarios →

Multichannel reminders are a collection strategy combining multiple communication channels to maximize the chances of reaching the debtor and obtaining payment. Channels used include AI calls, SMS, email, WhatsApp, RCS (Rich Communication Services) and registered mail. The value lies in channel complementarity. By combining these channels in an automated reminder scenario, the probability of reaching the debtor and obtaining payment increases significantly compared to a single channel approach.
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