Debt Collection Agency in Japan - No Win, No Fee

Step 1 - How does amicable (pre-legal) debt collection work in Japan?

Amicable collection in Japan is a formal demand backed by an evidentiary paper trail, not an informal chase. There is no codified pre-action protocol; the near-universal practice is a demand letter sent by content-certified mail.

The demand letter and why the postal format matters

A demand is normally sent as content-certified mail (naiyo shomei yubin). The post office certifies both the date and the exact wording of what was sent, which gives the creditor proof of the demand if the claim later goes to court. It also has a legal effect on the clock: a simple out-of-court demand pauses prescription for six months under Civil Code art. 150, once only, so the pause is useful as a bridge to filing rather than as a way of postponing a decision indefinitely.

Typical sequence

Judicial mediation as a middle route

Civil mediation (minji chotei) sits between negotiation and litigation. It is handled mostly by Summary Courts and run by a conciliation committee of a judge and two or more lay conciliation commissioners. It is worth knowing that a successful mediation record has the same effect as a final court judgment, so it produces an enforceable outcome without a trial.

When to escalate

Escalate when the debtor stops responding, breaks an agreed instalment plan, disputes the claim on grounds that do not survive the documents, or when the limitation date is approaching and only a court step will renew it. Because a debtor's acknowledgment resets the clock and a bare demand does not, a long negotiation with no written acknowledgment is a limitation risk, not a neutral delay.

Step 2 - How do you obtain an enforceable title in Japan?

Japan offers three routes to an enforceable title, and for undisputed invoices the document-only demand for payment is usually the fastest.

Demand for payment (shiharai tokusoku), the document-only route

The creditor files with the court clerk of the Summary Court with jurisdiction over the debtor's domicile. The clerk examines the documents only; there is no hearing and the debtor is not heard before the order issues. Once the order is served, the debtor has two weeks to object. If no objection is filed, the creditor may apply within 30 days for a declaration of provisional execution, and the order then becomes immediately enforceable. If the debtor objects at any point, the case converts automatically to ordinary litigation.

Small claims action (shogaku shoho), for money claims up to JPY 600,000

A small claims action is available only for money claims not exceeding JPY 600,000 and is designed to be concluded in a single day's trial. The defendant may object and force the case into ordinary proceedings. A claimant may use the procedure at most ten times a year at the same court, and a small claims judgment cannot be appealed to a District Court; the only challenge is an objection at the same Summary Court.

Ordinary proceedings

Ordinary litigation is the route for disputed claims. The forum follows claim value: JPY 1,400,000 or less in a Summary Court, above that in a District Court. Judgment must be rendered within two months of the close of hearings, and an appeal must be filed within two weeks of service.

More on court proceedings in Japan

Securing assets before judgment

Provisional attachment (kari sashiosae) under the Civil Provisional Remedies Act freezes a specific asset of the debtor to secure future enforcement, before any judgment exists. It is the standard answer to a debtor who is likely to move funds. The court requires the applicant to post a security deposit, and Japanese practice puts that deposit at roughly 20% to 30% of the claim amount, which is the main commercial constraint on using it.

What a judgment is worth on the clock

A right determined by a final and binding judgment gets a fresh ten-year prescription period under Civil Code art. 169, even where the underlying claim originally ran on a shorter period. Enforcement measures themselves also pause prescription under art. 148.

Court costs and language

The filing fee follows a sliding scale tied to claim value under the Act on the Costs of Civil Proceedings and is paid by revenue stamp. Costs are generally ordered against the losing party, but the order covers court costs, not each side's attorney's fees. Proceedings are conducted in Japanese and require a bengoshi to appear.

Step 3 - How does debt enforcement work in Japan?

Enforcement in Japan is carried out by the state, not by private bailiffs. With an enforceable title, the creditor asks a court, or a court execution officer, to exercise state power over the debtor's assets.

Who enforces what

The division is set by the Civil Execution Act. Enforcement against immovable property (real estate) and against claims, which includes bank deposits and trade receivables owed to the debtor, is carried out by the court. Enforcement against movable property is carried out by a court execution officer (shikkokan). Where the creditor holds a security interest such as a mortgage, the auction follows the same procedural mechanics as enforcement of a money claim.

Finding the assets: the third-party disclosure procedure

The single most useful change for creditors in recent years took effect on 1 April 2020. A creditor holding an enforceable title can now obtain a court order compelling third parties to disclose the debtor's property: banks and financial institutions on deposits and securities, the land and building registry on real estate, and local government and pension authorities on the debtor's employer and wage claims. The procedure sits in the Civil Execution Act, arts. 196 and 204, which the Civil Code itself names when listing the events that pause prescription (art. 148(1)(iv)). Before this, a creditor with a judgment but no knowledge of where the debtor banked was often stuck.

Securing assets before you have a title

Provisional attachment (kari sashiosae) freezes an identified asset ahead of judgment and is the standard preservation tool where there is a risk the debtor will move funds. The court requires a security deposit from the applicant, in practice around 20% to 30% of the claim.

Non-monetary obligations

Where the obligation is not a payment, for example delivery or vacating premises, enforcement is either direct, carried out physically by a court execution officer, or indirect, by a court order requiring the debtor to pay a monetary penalty for continued non-performance.

The clock during enforcement

Enforcement measures pause prescription until they conclude (Civil Code, art. 148), and a claim confirmed by a final judgment carries a fresh ten-year period under art. 169. An active enforcement file is therefore not at risk of being time-barred while it runs.

Cross-border debt collection in Japan

A foreign creditor faces two distinct questions in Japan: how to serve documents on a Japanese debtor, and whether a judgment obtained at home can be enforced in Japan.

Service of documents

Japan is a Contracting State to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, and its designated Central Authority is the Ministry of Foreign Affairs. Service through the Convention is reliable but slow, so build months rather than weeks into the timetable.

Recognition of a foreign judgment

A foreign civil or commercial judgment is recognised in Japan if five cumulative conditions under the Code of Civil Procedure, art. 118, are met: the judgment is final and binding; the foreign court had jurisdiction on standards Japan accepts; the losing party was properly served or appeared without objection; the judgment and the proceeding are not contrary to Japanese public policy; and there is reciprocity.

Enforcement requires a second step

Recognition is not enforcement. To enforce, the creditor must obtain a separate Japanese execution judgment under the Civil Execution Act, art. 24. The court does not re-open the merits, only the art. 118 conditions. In practice this commonly takes six months to a year, which often makes suing in Japan directly the faster route for a straightforward invoice claim.