At Prestige Services, Inc., we offer professional debt collection management services for national and international commercial accounts. We provide commercial debt collection services to every U.S. state, and in other countries like Mexico and Canada. But is commercial debt collection in other countries the same as it is within the United States? How is it different and what are the challenges? Today’s blog post explains how international debt collection works and other helpful information involved in the process.

An explanation

International commercial debt collection is the process of collecting delinquent debt accounts outside a creditor’s country of residence. There are a variety of kinds of companies that hire international agencies for commercial debt collection, including online businesses, companies that export bulk goods to other countries, and telecommunication services to other countries. Depending on the country’s laws and requirements, court costs might be more expensive and the process might work slower than cases in the United States.

How does it work?

The debt recovery process is similar to that of nationwide services, but every country has different requirements and laws on commercial debt collection that might make it more tricky. If a debtor doesn’t respond to contact requests by the collection agency, the debt claim would be forwarded to an attorney firm in the country or region where the debtor resides. There, the attorneys have full knowledge of the laws and requirements of that specific jurisdiction.

What are the Challenges?

Every country has some hurdles when dealing with international debt collection. Some foreign countries charge a “handling” fee of $150 or more to just send a demand letter to the debtor. Other countries like Mexico are actually pretty consistent with the U.S. on collection accounts. According to Joy King, President of Prestige Services, Inc., Canada is extremely difficult with debt collection since the court and attorney’s costs are rather expensive there.

“Typically, the attorneys in Canada will not even accept claims under $5,000.00 for legal action. Canada also has an extremely short Statute of Limitations of only 2 years; so it is important to take swift action on Canadian claims to avoid running into Statute of Limitations issues.”

Joy Baird, President of Prestige Services, Inc.

Manitoba has some of the strictest debt collection laws in Canada. A U.S. commercial collection agency that receives a claim against a Manitoba-based company must be licensed in Manitoba in order to contact the debtor. That’s why it’s best to forward such claims directly to an attorney in Manitoba who knows the laws there better.

As a top U.S.-based agency, Prestige Services, Inc. has to determine on a case-by-case basis as the issue arises. Attorneys will contact us in advance of the costs they require and we would notify the client and obtain their approval for any cost expenditures that occur.