International debt collection can be exponentially more complicated than the domestic collection process. Even the most cut and dry cases can be affected by bringing multiple countries into the mix. In addition to knowing all of the rules and regulations for collecting debts in your own country, you will also be expected to follow all of the debt collection laws of any other country you may be dealing with, and many times these countries don’t necessarily play nice with each other.
It is entirely possible to hold court judgments from one country and have the debtor in another country be shielded by political technicalities. Here are just a few examples of confusing international laws you may encounter:
- In Australia, debt collection is to be filed in one of three different jurisdictions based on the amount of the debt.
- In Canada, there are two completely separate legal systems. One based on Great Britain law, and a different legal system in Quebec based on French law.
- In China, debt collection companies are completely illegal, however there is a loophole for lawyers to collect debts.
- In Italy, interest owed is often negotiable, so there is no guarantee that you will receive it.
- Legal proceedings regarding debt collection filed in Mexico can often take up to three years to complete.
All of these different rules and regulations can make international debt collection a complete nightmare for a domestic business. Your job is to focus on running your business as well as possible, and it is easy to be distracted from that when attempting to collect debts from overseas. The best solution is to hire a commercial debt collection agency that has the specialized experience and contacts necessary to handle the complications of international debt collection.
Many credit collection services will offer international debt collection, but make sure that they actually have experience collecting internationally. Just like the services that charge lower contingency rates but have lower collection rates, these services might offer a cheaper solution, but if they aren’t able to get your money back are you really saving anything?
In addition to the complication of dealing with legal differences in foreign countries, there are also language barriers and exchange rates to contend with. A qualified commercial debt collection company will be able to handle all of these issues for you. It can be very difficult to even contact a debtor who lives in another country and speaks another language. If that debtor is actively avoiding contact with you, it will be incredibly difficult to explain why you are looking for that person in a different language.
If you were able to track down the debtor on your own, do you know how much you are owed in their native currency? Currency rates fluctuate by the minute, and keeping up with them is a full time job. How has the exchange rate been adjusted since the debt was incurred? Does that mean an adjustment on the balance owed?
Once again, your job is to be running your business, not being distracted with international debt collection. A reputable commercial debt collection firm with international debt collection experience will be able to handle all of the intricacies of dealing with different legal systems, languages, and currency because that is where they have experience. It will be worth the expense to avoid the aggravation of learning this process on the fly.