International debt collection can be exponentially more difficult than domestic debt collection. Depending on the foreign country involved, there are most likely a number of different rules and regulations that are completely different from the United States debt collection laws that you are used to.
In addition to differences in the actual laws that regulate collection, debt collection agencies will also have to content with differences in language, culture, and customs. International debt collection can present a whole other world of challenges if you are not properly prepared.
One of the rising areas for international debt collection is India. Many students from India come to the United States in order to attend colleges. While they are here, they can create debts that become difficult to collect when they finish school and move back to India.
At the same time, many businesses are taking advantage of labor costs in India by outsourcing work to the country. International business relationships like this can also create tricky debt collection situations.
Debt Collection Laws in India
Many of the rules and regulations regarding debt collection in India are similar to the rules and regulations that exist in the United States. These laws are mostly designed to protect the debtor from unnecessary collection practices like harassment and threats towards debtors. The debt collection laws that exist in India encourage the debt collection agents to always treat the debtors with courtesy and respect.
One of the biggest differences between collecting debts domestically and collecting in India is that the laws in India forbid an Indian from collecting a third party debt from another Indian for a foreign debt. Any international debt collected in India must be paid directly to the original creditor.
Another specific debt collection law that exists in India is that a statute of limitations of three years is placed on any outstanding debt. This eliminates the possibility of collecting debts that are older than three years. The one exception is that any partial payment made to the creditor can extend the statue of limitations for another three years.
One of the most popular methods of business debt collection in India is filing a Winding Up Petition against the debtor company. This is basically asking a court to force the business to liquidate assets in order to repay an outstanding debt.
Hiring An Experienced Debt Collection Agency
As you can see, debt collection in India requires the debt collector to follow a strict set of guidelines that is not too far from the laws that regulate debt collection in the United States. However, several key differences in both the actual laws and the culture of a different country can make the collection process much more difficult.
If you are attempting to collect an outstanding debt from an Indian debtor, your best bet is probably going to be to hire a debt collection agency that has experience dealing with international debt collection. Specifically, you will want to hire an agency that has experience dealing with collection in India. Using an experienced agency that knows the laws and culture of India will give you the highest probability to recoup the amount that you are owed.