Debt Collection Blogs

How hard is it for UK Businesses to collect debts in the USA?

  • International Debt Recovery

The United States is a global leader when it comes to business transactions. However, the trade gap between international countries and the United States has been bridged. Due to the increased level of import-export trade between the U.S. and other countries, it will not be uncommon for debts to be accrued. America currently imports 2.2 billion goods which are 1.6 billion more than it exports. Among all the nations the U.S. trades with, the United Kingdom has one of the lowest import/export ratios of indebtedness.

Due to the skyrocketing ratio of import/export trade worldwide, it is imperative for creditors in the U.K. and worldwide to obtain information pertaining to debt recovery in the United States.

The roles played by Credit Bureaus and collection agencies

The Stevens-Lloyd Group, who specializes in domestic and international debt recovery, understands that there is a wealth of credit information in the United States, more so than in other countries. Credit reporting agencies utilize sophisticated computer databases which can decipher the credit risk of numerous business owners who have established credit. The information provided by the databases helps to determine if there is a need to initiate the collection process or start litigation.

In the U.S, there is a wide range of debt collection agencies. Some of these debt collection agencies have branches throughout the country. Due to the nature of their business, debt collection agencies are regulated by federal and state law. For foreign creditors, collecting debts in the United States can be daunting. Moreover, the legal system in America can favor the debtors in certain situations. This is because of perceived harassment by creditors and debt recovery firms during the collection process.

When collection agencies are unable to effect collections on a voluntary basis from the debtors, they may recommend that legal action take place. The case will be referred to a licensed debt collection attorney who can handle it in the state where the debtor company resides. When a case is referred to an attorney by a collection agency, the collection agency and the attorney will work on a contingency basis. The creditor needs to know that they are responsible for paying the court costs associated with the state or jurisdiction which the debtor company is located in.

Debt Recovery in the United States
Collecting debts from the USA is not an impossible task. The presence of collection agencies has helped alleviate the burden associated with recovering outstanding debts.

When a creditor from the UK contacts a collection agency about collecting their debt, the collection agency will make a demand on the debtor and insist that any balance owed is cleared immediately. At the Stevens-Lloyd group, 30 days is all we allow before the legal process is initiated. We will effectuate an asset and liability investigation on the debtor company. Assets of the company, corporate status, number of staff employed, how large the business is and how long it has been in operations are some of the areas covered. This information will be utilized to strategize how the outstanding balance can be resolved either voluntarily or involuntarily.

What happens if the company vanishes?

It so happens that sometimes, debtors abandon ship and disappear. They either choose to close shop or change location. They even go the extra mile by changing aliases. Collection agencies embark on extensive research by contacting neighboring businesses as well as friends and relatives of the owners. Sometimes addresses and telephone numbers can be obtained by this procedure as well as deploying skip-tracing software.

Payment plans and settlement agreements

If the debtors have been contacted and the collection agent determines that payment in full cannot be achieved, a payment arrangement may be arranged. Or if there is a dispute and a need for the creditor to accept a lesser amount than the outstanding debt, a settlement agreement can be reached.

If legal action is necessary, the collection agency will work with their attorneys and commence legal action. If the attorney firm is unable to pressure the debtor to pay their outstanding balance, the attorney will utilize legal force to recover what is owed. This involves procuring a Judgment and garnishing bank accounts and receivables.

What should the creditor take into consideration regarding filing legal action?
To determine if it is worth filing a lawsuit to recover your debt, here are some points to consider.

  • Is the claim large enough to sue?
  • Is the business still operating?
  • Where can the Service of Process be made?
  • Does the debtor have enough assets to pay the debt?
  • Do you have enough documentation to back up the claim in case of a dispute?

Is there a likelihood of the debtor filing a countersuit?

Conclusively, if all the due processes are taken into consideration, it will be entirely possible for UK businesses to collect debts in the US. If you are searching for an expert debt recovery firm to assist you with your business debt collection issues, we suggest you reach out to The Stevens-Lloyd Group. We will answer any questions and assist you with your situation.