International Debt Collection in South Korea

While domestic debt collection can sometimes be overwhelming for small businesses, attempting to handle international collections is exponentially more difficult. When you introduce different cultures, languages, governments, and regulations, it can be difficult to understand exactly what the rules are, much less follow them in trying to collect an amount that is owed to you by a foreign company.

When you are working with companies on the other side of the globe, issues rooted in different cultures and languages are bound to arise. One of the positives about working with companies in South Korea is that you will likely be able to resolve any disputes successfully, provided you have the right people working on your side.

Prepare for the Worst 

The best way to handle a debt collection situation with a Korean company is to prevent the issue before it ever has the chance to get off the ground. Many debt collection issues in South Korea are actually the result of fraud that could have been avoided with a little bit of due diligence.

Make sure that you are checking out the background of any Korean company you are considering doing business with, just as you would with any American company. With South Korean companies, you should be able to obtain and verify the company’s business registration number and even pull a credit report on the company. You will also want to check with the company to confirm that your contact person actually works for the company.

After you negotiate a business deal with the company you choose, you should have any written agreements or contracts reviewed by an attorney with experience dealing with international business in South Korea. Making sure that your contract is sound is important in any business agreement, but with the cultural and legal differences in eastern Asian countries, particularly South Korea, you will want to have an expert review them.

If Things Get Ugly 

As with any international debt issue, if things go bad you are likely going to be in over your head in terms of resolving the situation. Your best option is almost always to hire an agency that offers debt collection services for small businesses and specializes in international debt collection.

Most small businesses wait too long before hiring a debt collection agency, but the best way for the agency to be most effective is for them to get on the case as soon as possible. For that reason, you should hurry to hand off the case to an agency as soon as you suspect that there might be a problem.

The commercial debt collection agency that you hire will have experience knowing exactly how to phrase their collection letters in order to have the most impact on a Korean business. They will also have attorneys with international experience that they can consult on issues, giving them far more resources than you would have to fight the issue on your own.

When conducted in the proper manner, debt collection in South Korea has a strong probability of being successful. While there are many differences in culture, language, and regulations, if you hire a collection agency that has the experience to handle those differences and you do your own due diligence before getting involved with an international company, there is a good chance that you will be able to obtain any balance that is owed to you.

By | 2017-09-16T12:24:01+00:00 October 6th, 2014|Blog|0 Comments

About the Author:

Graduated from University of Utah - business degree 1990. Served in US Army as an interrogator / linguist, then as a tactical intelligence officer - Military Intelligence 1986-1990. Managed Western US sales operations for NY based collection agency 1990-1992. Founded Direct Recovery Associates, Inc. 1992-present