The law of 4 May 2023 inserts a new Book XIX (“Consumer Debts”) into the Belgian Code of Economic Law on the recovery of consumer debts, and considerably changes the practice of amicable debt recovery.

In terms of application over time, there are two phases that must be taken into account:

•  On the one hand, this law will come into force on 1^st September 2023 and will therefore apply to contracts concluded on or after that date;
•  On the other hand, from 1^st December 2023, this law will also apply to contracts concluded before its entry into force but whose collection activity only begins after its entry into force

Among the most important changes and news are for example:

• The obligation to send a free reminder in the form of a formal notice, before being able to apply the late payment interest and/or penalty clause provided for in the contract;
• The setting of ceilings for penalty clauses based on the amount of the debt;
• A limit for the applicable interest rate, which may not exceed that of the law of 2 August 2002 combating late payments in commercial transactions.

Any clause in contradiction to the new Book XIX will be null and void, which is why it is important to review your terms and conditions. The legislation also provides for criminal fines for non-compliance, ranging from €26 to €10,000 (or 4% of annual turnover).

For more information on this subject, or to review your terms and conditions, please do not hesitate to contact our team Cairn Legal.