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Cross-Border Business and Foreign Debt
There are several advantages when it comes to using a reputable and competent international collection agency. Nowadays, technology and globalization mean that business is increasingly being conducted on a global scale. Cross-border business is the order of the day. However, with it comes the challenge of cross-border debt.
Challenges Faced in Enforcing Foreign Debt Repayment
Often the prohibitive legal expenses involved in collecting foreign debts are enough to discourage one from pursuing payment. It’s no surprise that the legal costs may exceed the amount being sought. When that happens, you may be tempted to write off such as bad debt. Ultimately, the finances of your business will suffer, putting your livelihood at risk. Litigation costs usually consist of such expenses as attorney fees, court filing expenses, and court process server costs.
Such payments not only have negative implications on the finances of your company but are also time and energy-draining. When it comes to enforcing international debt, you should realize that time is of the essence. Should your debtor fall insolvent, then your chances of recovering your debt decrease dramatically. This is why you should move with speed, zeal, and promptness whenever you want to enforce an international judgment or collect a debt outside your own country’s jurisdiction.
It is no surprise that international business, like any other kind of business, result in business disputes and even court cases. What makes pursuing such discussions in a court of law difficult is the international nature of the dispute. Different courts and jurisdictions mean that there might be a conflict in the respective laws and their application. Therefore, collecting delinquent debt outside your country’s borders is inherently a messy and bureaucratic process that is best left to licensed experts.
In countries with developing judicial systems, collecting such debt can prove to be a logistical nightmare. In addition to the legal expenses that are to be expected, there are the associated travel and accommodation costs. Not only do you have to halt your business affairs to pursue this debt, but you also have to dedicate tons of time and energy to such an effort. This can be draining and can have severe ramifications on your business venture.
Even though overseas may be the next frontier for your business, expanding into a foreign market does come with its share of challenges. An international debt, for example, will require a radically different approach to collect. If an amicable approach fails to bear fruit, you are often left with no option but to institute legal proceedings to recover the debt. Usually, if you are smart and business savvy, then the option of engaging a debt collector may be in the books for you, which is the wisest move to make.
If you take the litigation path, you may only collect after judgment has been entered against the debtor. However, you may only engage a debt collector in the debtor’s country. If you have ever tried to pursue a delinquent international debt, you know that the laws in the debtor’s jurisdiction are applicable and sometimes completely different from the laws in your area. Some jurisdictions have difficult and complicated laws designed to protect their countrymen, while others are more likely to be corrupt. While there are countries with helpful, business-friendly laws, others have complex and uncooperative rules.
Cross border debt recovery is a tricky and a precarious situation. Since debt recovery laws are passed at a national level, courts operate differently from country to country. For example, in some countries, one may not pursue a debt that is older than seven years. In other countries, this time limit is two years. Business law therefore changes and shifts depending on the country. A debt collection agency that is conversant in the local language, customs, and norms is thus invaluable. Such an agency needs to understand fully and comply with the laws of the land. That said, debt collection agencies with a no recovery no fee policy are a godsend. This means that should your agency fail to collect on what is owed, you don’t pay out a single dime.
Advantages of Using an International Debt Collection Agency
Since such agencies use licensed and experienced individuals, you stand a higher chance of collecting on your debt should you use such an agency. Additionally, there are a lot of advantages to be had by employing ethical means to secure your debt. In so doing, one is able to protect and maintain a good business reputation and name.
Sometimes finding and locating a debtor may take up more than a fair share of your time and energy. With a reputable debt collector on your corner, establishing and communicating with debtors is straightforward. Since they often have the combination of experience, skill, and resources, such agencies are more adept at collecting debt on your behalf than any other entity out there. They are also faster at locating debtors and enforcing payment.
A professional debt collector also knows to handle his task with professionalism and tact. This is because a heavy-handed manner of implementing payment is likely to result in bad blood and a poor business relationship.