International Debt Collections: How Can I Collect?

When you think of debt collection, you don’t necessarily think of international debt collection.  However, the need of debt collections internationally is on the rise as more and more companies do business online rather than face-to-face in the business office.  While the internet provides an immense number of opportunities for businesses to succeed, it also opens the door to being ripped off by international customers as well as local customers.

Unfortunately, international debt collections aren’t as easy as they are in your country.  An invoice or letter simply is not going to do the trick.  Debt collection agencies are knowledgeable in what needs to be done to obtain payment for the debt that is owed.  However, there are certain things that need to be kept in mind when debt collection agencies work to obtain the international collection.  Consider the following:



1. International customers have the same rights as local customers in regards to the time in which they can be called.  It is helpful for a debt collection agency to be well aware of all time zones and ensure that there are employees working during the time international customers can be reached.  If you simply work within local time zones, international customers will never be at the other end of the line.

2. It is also helpful if there are employees that can speak fluently in other languages.  Otherwise, you may get a hold of an international debtor, but without being able to communicate with them regarding the debt that they owe, collection won’t come for the creditor.

3. Ensure that the international country’s laws are up-to-date and you are familiar with them.  Otherwise, this could cause a wide range of problems for not only the debt collection agency but also the creditor.

It isn’t the easiest task to collect debt from an international customer, as there are certain laws that must be followed.  However, it can be done – even without litigation.  Keep in mind, though, that a lawsuit may be filed in your home country or it may be required that it is filed in the debtor’s home country.

Do collections agencies have to follow rules and regulations?

Debt Collecting - A Regulated Business

When a company provides service, a product or a loan to an individual, they expect to receive it back as per the credit agreement.  Unfortunately, this isn’t always the case.  More often than not, especially in today’s tragic economic times, companies want vengeance on their customers that have not fulfilled the terms within the agreed upon credit agreement.

While retribution cannot be obtained, a company has a right to hire a debt collection agency.  However, debt collection agencies do not always follow the rules (unfortunately) and it gets them as well as the creditor in trouble as the debtor reports this “bad behavior” to appropriate authorities.  Nonetheless, it is possible to ensure that this doesn’t happen.

Debt collection agencies simply need to ensure that all employees are up-to-date on new regulations regarding debt collections.  One way to do this is by holding monthly meetings to address any concerns that employees may have regarding the current collections regulations.  At the same time, this meeting can be held to provide information for new regulations that have been passed.

In addition, when new collections regulations become known, it is critical that all employees receive a training session.  While this doesn’t have to be a day-long class, a brief yet full explanation of the new rules can truly help a debt collection agency succeed in obtaining owed debts.

It is crucial that every employee of a debt collection agency be completely familiar – in fact, they should know it like the back of their hand – with the Fair Debt Collections Practices Act, aka FDCPA. The FDCPA describes exactly how, where and when debtors can be contacted and outlines deceptive practices that are strictly prohibited.  When misleading practices are put into play, a debtor has rights to recover damages, which is not what the creditor wants. 

The Hard Truth with Debt Collecting

It’s no secret that the past couple years have showed a slumping economy.  It’s important to think about what else comes along with an economical decline.  The obvious accompaniment is an increase in debt for consumers.  Yes, this increase has shown astronomical numbers in the last couple years.  With such a debt increase one would think that collections agencies are breaking the bank.  Well, that’s not exactly the case.

It’s correct to assume that an increase in debt will also cause an increase in business for collections agencies.  The unfortunate part about this scenario is that unlike most agencies that see a rise in profits when business increases, collections agencies don’t always reap the same benefits.

 

In the past couple years, collections agencies have seen more and more work coming to their door.  The problem is it’s not uncommon for this work to go unpaid.  Collections agencies have had to hire more employees to help regulate the new workload, however some or many of the claims that are coming in are not bringing in the green.

 

Who is to blame?

It’s not necessarily a ‘who’ as it is a ‘what’.  Collections agencies are having a hard time collecting debt.  This difficulty is a major cause of the regulations that the government has in place to protect those that are in debt.  Collections agencies are forced to walk on a thin line while they are attempting to go about their debt collecting business.  It’s safe to say that the rules and regulations are not on the collectors’ side when it comes to debt.

 

Debt collecting is not an easy endeavor and it certainly isn’t the cash cow that many people presume it to be.  The sad truth is, in a struggling economy, it’s every aspect of the economy that struggles-not simply those who owe.   

When economy is down, and people are in debt, do debt collection agencies flourish?

Chapter 11- A Reorganization of Business

Chapter 11 bankruptcy is one of the more involved forms of bankruptcy that is available.  In filing Chapter 7 bankruptcy, a trustee is appointed to liquidate non-exempt properties and pay off the creditors.  This is not the case when it comes to Chapter 11. 

When a Chapter 11 petition is filed a trustee can still be appointed, however their properties are not immediately sold.  By filing this petition the debtor is granted automatic stay, which means the creditors have to ‘back off’ on attempting to collect.

The main difference between a Chapter 7 and a Chapter 11 is that in a Chapter 11 the company is still hoping to stay in business, they simply need a more ‘lax’ payment plan in order to recoup.  In Chapter 11 there is a reorganization plan that is set.

A reorganization plan gives the debtors the ability to get their financial affairs in order.  They may negotiate small payment plans, or even lesser interest rates in order to help the debtor to pay back their debts.  With that being said, some creditors have the ability to disapprove or reject the plan. Those creditors that are considered to be ‘fully impaired’ will reject a reorganization plan. 

If a plan is not worked out with the creditors and subsequent plans are rejected, the debtor may be forced to change into a Chapter 7 bankruptcy plan. 

While Chapter 7 bankruptcy is typically called liquidation bankruptcy, it is Chapter 11 that is known as reorganizational bankruptcy.  Most creditors prefer this type of bankruptcy, because in the former there is a good chance they will not get their money back.  Chapter 11 may be a slow process, but it ensures that everyone is on the same page when it comes to paying back debts that have been acquired.