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How does international debt recovery work?

Recovering an overdue debt from an overseas customer may seem like a daunting challenge but it doesn't have to be game over, particularly if you put the debt in the hands of an experienced debt collection agency.

Globalisation and technology have opened new international markets for many businesses, from manufacturers and wholesalers to schools and colleges. However, while trading with overseas customers may have become easier, there's always the risk that you might not get paid. Chasing a debt may seem particularly difficult when you're dealing with a customer who is thousands of miles away, not to mention the issues you could face because of local laws and language barriers.

Chasing an international debt may involve overcoming a few more obstacles than recovering money you're owed in the UK, but with tenacity and the right team on your side, there's a very good chance of success.

Speaking the language

You might worry that you'll struggle to recover an overdue debt if you can't converse confidently in the local language. But remember, English is the international language of business, so it may not be a problem. If language expertise is needed, a good debt collection agency should have a trusted local agent who can help.

Where to issue Court proceedings

If it's clearly stated in your terms of business, you can sue the customer for monies owed to you in an English or Welsh Court. Once you've obtained a judgment in your favour, you should be able to transfer the case to a local Court for enforcement.

Navigating local laws and restrictions

The simplest way to avoid any issues relating to local laws and restrictions is to work with an experienced debt collection agency. They'll have a good understanding of the different legislation and rules in overseas territories and will ensure that procedures are followed correctly and with the greatest chance of achieving a positive outcome.

Some countries have laws to prevent foreign debt collection agencies from collecting debts or issuing proceedings directly. However, that's not a problem if you instruct an agency that has a network of trusted partners across the globe.

The cost of overseas cases

It's common for debt collection agencies to charge a small handling fee for overseas cases. However, they should still be prepared to operate on a similar 'no collection, no commission' model to that which they offer in the UK. Commission rates can vary, depending on whether it's necessary to involve an international partner agency.

Reducing the risk of late payment

It's important to remember that standard payment terms differ from country to country so be sure to do your research so that you can make allowances for any potential delays, or take advantage of any local legislation that enforces prompt payment terms.

It's also vital to draft your terms of business carefully. They should clearly set out your expectations when it comes to payment of outstanding invoices. Ensure you include a clause which allows you to charge late payment interest and state that all contracts of sale are governed by UK law.

Reliable international debt recovery expertise

At Redwood Collections, we provide our clients with a truly global debt recovery service that's FCA regulated and fully GDPR compliant. Where practical, our expert UK-based team will chase international debtors directly. However, we also have access to a network of trusted overseas partners who can support us where the process is complicated by local culture, language, or legal issues. We have a strong track record of success, particularly in the Middle East, and our client list includes many of the UK's independent schools.

Wherever in the world you're doing business, our international debt recovery service can help your business Grow Stronger.

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