What is Extrajudicial Collection Costs?
Updated: 7 March 2026
Extrajudicial collection costs are the costs a creditor is entitled to charge a debtor for debt recovery activities taken outside of court proceedings. In the Netherlands and much of the EU, the maximum amount is set by law using a sliding scale based on the outstanding principal. These costs are due in addition to the principal and statutory commercial interest once the debtor is in default — no separate contractual clause is required.
How does extrajudicial collection costs work?
Extrajudicial collection costs are the legally recoverable costs of pursuing an overdue debt before going to court. They cover activities such as sending demand letters, engaging a debt collection agency, and instructing a solicitor to write to the debtor. The underlying principle is that the debtor, not the creditor, should bear the cost of recovery when the debtor fails to pay on time.
In the Netherlands, the recoverable amount is set by the Decree on Compensation for Extrajudicial Collection Costs. The scale starts at 15 percent of the first €2,500 (with a minimum of €40), dropping through successive tiers to 1 percent on amounts above €200,000, capped at €6,775.
For consumer debtors, an additional procedural step is required before collection costs become due: the creditor must first send a formal notice giving the debtor fourteen days to pay before costs can be charged. In B2B situations, this fourteen-day letter is not required, but the creditor must be able to demonstrate that actual collection activities were undertaken.
Extrajudicial collection costs accumulate alongside statutory commercial interest — both run from the moment the debtor is in default. Together they create a meaningful financial incentive for prompt payment.
In practice, many creditors do not pursue collection costs even when legally entitled to do so, often to preserve the customer relationship. However, for persistent late payers, claiming these costs is entirely legitimate and can be included as a negotiating point in any payment arrangement discussion.
Why does this matter for SMBs?
Extrajudicial collection costs shift the financial burden of debt recovery to the party responsible for the delay. They compensate you as creditor for the time and cost of chasing payment, and create additional incentive for the debtor to settle promptly.
For SMBs, including a reference to statutory collection costs in invoices and general terms strengthens the collection process and signals that late payment carries real financial consequences beyond the invoice amount.
How to manage this correctly
- 1State on invoices and in your general terms that statutory extrajudicial collection costs apply to overdue amounts
- 2For consumer debts, always send the required fourteen-day notice letter before claiming collection costs
- 3Calculate collection costs using the correct statutory scale and attach a breakdown to your collection correspondence
- 4Claim collection costs alongside statutory commercial interest — both are due simultaneously from the moment of default
- 5Engage a collection agency or solicitor promptly on persistent arrears to substantiate the collection activities underlying the cost claim
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