I run an online business and have clients from all over the world. I have one particular account that is very overdue, and my efforts to collect are not working. The client resides in Asia and the laws are confusing. What is my next step?

What Is The Maximum Amount Of Time You Should Give Your Commercial Debtor Before Outsourcing To Collections?

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There are many factors that affect the amount of time you should give your commercial debtor before outsourcing to collections, but the maximum amount of time is six months, and this time frame applies to large accounts or for those with whom you've had a long-term and positive relationship.  By the time the debt has remained unpaid for six months, you will have provided more than enough time for a business to come up with the means to pay off the debt.  For newer customers, or for businesses that have been slow to pay in the past, you shouldn't wait that long. 

Keeping in mind that the longer you wait, the harder it typically is to recover the debt, you might consider giving loyal customers a bit of a break before outsourcing their commercial account to collections.  This is especially true if the commercial debtor has been honest and forthright in communications or in attempting to pay the debt.  If the debtor has ignored your attempts to resolve the unpaid debt, or has promised payments and did not come through, you should consider speeding up the process of outsourcing to collections. 

If the commercial debtor has a large account and you have reasonable hope that the debt will be paid within six months, then you might want to hold off on legal collection procedures, or you will lose a portion of any amount of the debt that is recovered to fees.  However, if the lack of payment is affecting your ability to run your business because the amount of debt is so large, then you may want to speed up the process, as recovering even part of the debt as a result of collection efforts will be beneficial to you.  Your instincts, the debtor’s behavior, and the commercial debtor’s past payment history with you should influence the amount of time you wait before outsourcing to collections. 

3 Sure Fire Ways to Collect International Debt

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Over the last 3 years, more people than ever before have started to default on their debts or otherwise attempted to skip out on their financial obligations. While plenty of individuals have begun to default on their domestic debt, even more people have defaulted on their international debt. International debt is more difficult to collect due to the fact every nation has their own laws regarding its collection, and a collection agent needs to abide by these laws. That's to say nothing about the added difficulty of tracking down an international debtor.

Despite these difficulties, there are 3 sure-fire ways you can collect international debt.

1. Know the Laws Involved: Not every country have the same legal agreements between each other regarding how you can collect on international debt. For example the United States has a different set of debt collection agreements with many Asian countries than they do with European countries. If you aren't well versed in these laws, or if you don't feel like you'll be able to understand them on your own, then consider working with a lawyer well versed in the relevant laws.

2. Sue the debtor: Filing official legal actions is your best bet when it comes to grabbing an international debtor's attention. International debtors are unlikely to respond to the same light, unofficial pressures as domestic debtors so taking serious, official, and occasionally drastic measures is often necessary. Keep in mind that the actual legal process and proceedings will occur within the court of the country of your debtor.

3. Pawn the debt off: You can also sell the right to collect the debts you're currently chasing to a company better versed in international collections. This is the fastest and easiest method of receiving compensation for the international debts you're presently responsible for.

Settling an international debt isn't impossible, but it is more difficult than collecting domestic debt.