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Dealing with Overseas Debtors – Advice for UK Business Owners

Any business owner knows that dealing with customers and clients from overseas is a great way of expanding your business operations and increasing the value of your business.  The Internet allows us to reach a global market more easily than ever before and this has led to some of the UK’s millions of small to medium enterprises (SMEs) taking the opportunity to trade with overseas customers, whether these are domestic or commercial buyers. 

Despite the uncertainty that continues to shadow the Brexit negotiations and the uncertainty of what sort of deal the UK government will secure, overseas trading has remained an attractive option.  However, one of the very real issues that businesses who trade overseas face is how to deal with a debtor who lives and operates overseas.  This can present small business owners with a major headache and results in many of them just writing off the debt as being not worth the hassle and expense involved in recovering the money.

The processes involved for recovering money from an uncooperative overseas debtor is not as difficult as you may think.  There are plenty of options available to UK business owners engaged in cross-border trade to recover money owed to their company from debtors, whether in Europe or in other parts of the world.  One key issue to think about is whether legal proceedings should be launched in the UK or abroad – whether to resort to the UK’s legal system or the legal system in the country where the debtor operates. 

Commencing legal proceedings in the country in which the debtor is based or resides may be a daunting prospect for many UK business owners as negotiating a foreign legal landscape could be difficult and confusing.  There are international debt collection agencies here in the UK that specialise in recovering debts from overseas.  These companies will have the expe4rtise and experience necessary to negotiate on behalf of your business and attempt to recover the money owed to you from debtors, both in Europe and in other parts of the world. 

Overseas debts can be split into four loose categories:

  • Countries in which the European Enforcement Order (EEO) Regulation applies
  • Countries which have signed the Brussels Regulation or the Lugano Convention
  • Countries with which the UK has bilateral enforcement conventions in place
  • Countries for which none of the above apply (particularly the USA, China and Japan

Next week, we’ll start to take a closer look at the four different categories so that our readers are fully informed on the options available and which category their debtor falls into.  Don’t’ miss out on this vital information, follow us on Twitter or Facebook and you’ll get a notification as soon as the article is published.