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International Debt Collection – Don’t’ be Fooled by False Facts

So many business owners here in the UK are dealing with clients, customer and other partners overseas nowadays.  This is large thanks to the Internet and the enhanced levels of communication that it makes possible.  It’s easier than ever to export goods, sell to customers in other countries and form alliances with business partners abroad.  However, when it comes to finance, are we taking risks when we do business deals on the international stage and how can we ensure that we get paid?  How easy is it to recover money that is owed to you from an overseas debtor?  Let’s take a look at some common misconceptions:

  • If your debtor does not speak English, you can kiss your money goodbye!  Nothing could be further from the truth here – English is the international language of business and the chances that nobody in your debtor’s organisation speaks English are very low.  Some debtors may claim not to speak English in an attempt to avoid payment, but don’t let this put you off recovering funds owed to your business.
  • You have to take the debtor to court in their own country.  A jurisdiction clause in your contract would mean that you can issue court proceedings here in the UK and make them stick.  This requires that a court in the debtor’s country recognises the deal and enforces a Judgment in the case.  Even if your debtor is in China (where debt collection is illegal), you can still go to court to recover the debt.
  • It will take years to recover a debt from an overseas debtor.   The vast majority of international debt collection claims are resolved quickly, especially if you have a solicitor who specialises in dealing with overseas claims.  Some cases are likely to be more complicated than others and this can delay proceedings somewhat, but most cases are settled within two or three months.
  • Write off the bad debt against tax.  This is not a helpful approach as reported losses can make your company look weak, sometimes resulting in difficulties in obtaining credit in future. 
  • Bank charges and solicitor’s fees may cost you more than the original debt.  This is not necessarily the case.  If you engage the services of an international collections agency that specialises in recovering debts from overseas, they will make their charges clear from the beginning.  Some international collection services operate on a no win, no fee basis, which means you don’t have to risk spending a lot of money to collect a relatively small sum.

If you’re owed money by an overseas debtor, engaging the services of an international debt collection agency offering their services on a contingency basis is the most efficient and cost-effective method of recovering the money owed to your business.  An international debt recovery agency will have the experience necessary to deal with the debtor, whichever country they are in and whatever language they speak.