International Debt Collection

Why is it so difficult to collect debts overseas?

The difficulties of collecting a debt across international borders is immense. In the first place, debtors who have moved overseas from the place where they have originally incurred a debt often believe that they are untraceable and that if they are found it will be impossible to make them liable. This means that they are unlikely to negotiate easily because of their belief of invincibility. Although believe may in some cases be mis founded, there are other reasons which make it difficult to enforce debts internationally. The first is that the laws of different countries often differ which means that validly enforceable debt in one country may not be enforceable in another. Also, even if they are enforceable, they may not be transferable in the sense that the action has not been transferred from on jurisdiction to another such that it may be enforced against the individual that it relates to. Also, the practicalities of enforcing the debt might mean that it may consume enormous amounts of time, resources, legal fees and be extremely complex to enforce a debt internationally.

What steps can I take?

1. Start a file

There is always value in gathering information, documents and making a file on a person of interest to you. When you collect relevant information and store it you slowly gather a base of which you can act which is reliable and solid and you can begin to become confident in the actions which you are taking to gather the debt back. As part of this, beginning a dossier on the debtor will give you vital information which will allow you to search public records and make private inquiries about their whereabouts. It will also enable you to begin drafting legal documents and pleadings which you will need in order to go through the process of collecting the debt.

2. Research applicable laws

As an international creditors, you may be pleasantly surprised that there are a number of laws which protect you against persons who flee the country because they don’t want to pay their creditors. An example in Australia is the Foreign Judgements Act 1991 (Cth) This is legislation which allows you to register a foreign judgment which was obtained in a foreign court against a debtor who is now in Australia. This is a very powerful tool for a creditor trying to enforce a debt from overseas to a debtor in Australia because it means that any country which Australia has an applicable agreement with can be used as the home court whose judgment then gets applied in Australia.

3. Obtain local legal representation

One of the key steps that you can take to get closer in the process collecting a debt internationally is to obtain legal representation in the jurisdiction where the debtor is present. The reason for obtaining a lawyer in the local jurisdiction is that they will be able to advise you on the applicability of local laws and to commence any necessary and appropriate actions against the debtor.

Obviously, it is difficult to give specific information on all of the possible circumstances which can arise in relation to international debt collection, it is certainly advisable to obtain expert advice, also, the first step with any debt collection process is to send a letter of demand, which we have available here on the site, click below to obtain one now.

Debt Collection Letter Resources