US B2B debt collection typically follows three phases when collecting debts from a US company: amicable collection from a debt collection company like Safe Collections, amicable contact from a US attorney, and then legal recovery if unsuccessful.
Here at Safe Collections, we have decades of experience in helping our B2B customers in the UK recover unpaid invoices and bad debts both in the UK and across the globe.
One of our key markets is the USA. We have been working closely with Robert, the Vice President of International & Corporate Quality at our affiliate office in New York, since 1986, who contributed to this guide.
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Table of Contents
Phase 1. Amicable In-House Collection
With every Safe Collections USA debt collection case, we always attempt to recover the debt using our own in-house team of collection agents.
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Our agents will contact the debtor by post, email, and telephone with the aim of ensuring that any outstanding balance is paid as soon as possible.
If a query exists, our collectors can often resolve legitimate issues and refute spurious claims so you get paid as quickly as possible.
As is the norm for debt collection in the USA, our in-house process is normally concluded in 30-45 days (or less, depending on the file specifications).
If we are unable to resolve the account in phase one, this is often due to the debtor being unwilling to clear the debt, or unwilling to clear the outstanding overdue balance.
Phase 2. Amicable Attorney Collection
If phase 1 is unsuccessful, we increase the pressure by placing the account with one of our experienced and fully qualified debt collection attorneys in the USA.
This demonstrates to the debtor that the creditor is serious about recovery and has the power and connections to begin legal proceedings in the debtor’s state of residence.
We often find that when an attorney local to the debtor is instructed, payment shortly follows.
If our independent legal counsel is unable to persuade the debtor to pay the outstanding commercial balance, we would seek authorisation from the client to commence with phase three, which is a formal legal process.
Phase 3. Legal Recovery in the USA
If the attorney can’t collect the unpaid invoice on an amicable basis, we would work with counsel to submit their legal requirements and recommendations to the end client.
The creditor must then decide whether to proceed with the suit.
Before committing to legal action, we recommend they read our questions to ask before suing a debtor in the USA. We can also discuss these points with you to understand how they might apply to your situation.
You also need to consider the cost and practicality of providing witnesses for court in the USA.
If you decide to proceed, you pay the necessary advance court costs and occasionally a modest retainer.
Most collection cases are successfully resolved before this point, and no obligation exists for the client to pursue legal recovery.
Frequently Asked Questions about UK to US B2B Debt Recovery
Can a UK business successfully recover a debt from a US company?
Yes, though it requires specialist expertise.
The practical challenges include:
- Understanding which state’s law applies
- Identifying the correct legal entity
- Navigating the US court system if litigation becomes necessary
- Managing the process remotely.
We’ve written a guide on questions you need to ask before recovering a debt in the USA.
Safe Collections has been working with its US affiliate since 1986, which means UK creditors have local expertise and local legal representation available without needing to manage the process themselves.
What are the relevant B2B debt collection laws in the USA?
US B2B debt collection is governed at federal and state level.
At the federal level, the primary consumer protection legislation is the Fair Debt Collection Practices Act. This does not apply to most B2B collections, giving commercial creditors considerably more latitude.
State law governs statutes of limitations on debt (the window in which legal action can be brought), interest rates on judgments, and court procedures.
How long does B2B debt recovery take in the USA?
The timeline depends on which phase of recovery is required:
- Amicable in-house collection typically takes 30 to 45 days
- If attorney involvement is needed, this adds several weeks
- If the case proceeds to litigation, the timeline extends significantly. US court proceedings can take months depending on the state, the complexity of the claim, and whether the debtor contests the action.
The lengthy timeline is one of the reasons early intervention matters: the sooner a debt is placed for recovery, the more options are available and the faster resolution tends to be.
What happens if a US debtor ignores collection attempts?
If a US debtor does not respond to amicable collection attempts, the next step is attorney involvement, which significantly increases pressure and signals that litigation is being considered.
If the debtor continues to ignore contact, the creditor can authorise legal proceedings.
Once a judgment is obtained, enforcement options include wage garnishment, bank account levies, and liens on assets, depending on the state.
It is worth noting that obtaining a judgment and enforcing it are two separate steps, and enforcement options vary by state. This is another reason why local attorney involvement is important.
What should I consider before suing a US debtor?
Before authorising legal action, you need to consider:
- Whether the debt is large enough to justify the cost of litigation
- Whether the debtor has assets worth pursuing
- Which state’s courts have jurisdiction
- What the statute of limitations is for your type of debt in that state
- Whether you can provide evidence to support your claim, including contracts, invoices, and correspondence.
You also need to consider whether witnesses may be required to appear in a US court, which has practical and cost implications for UK-based creditors.
Are There Advance Fees for US Debt Collection?
For undisputed business-to-business claims, we do not charge fees in advance. If we don’t recover the debt, you don’t owe anything, assuming you chose not to start legal action.
If your case reaches the litigation stage, which is always optional, court and legal costs become payable by you as the creditor.
We’ll discuss this with you before any proceedings are issued so you can make an informed decision about whether it makes commercial sense to proceed.
How Much Does US Debt Recovery Cost?
As a guide, our average rate sits around 20–25% of the amount recovered. Lower rates are available for higher-value claims or clients with regular placement.
To break this down, our fees vary depending on the specifics of each claim. We factor in things like:
- The age of the debt
- The amount owed
- Any history we have of recovering debts on your behalf
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For debts that move into the quasi-legal stage (more on this below), an additional 10% fee applies, bringing the total to around 35%. This reflects the involvement of a US attorney at that stage, and only applies if payment is secured through their efforts.
Do You Bankroll Our Legal or Enforcement Costs?
No. We work on contingency for collection activity, but we don’t cover the costs of litigation on behalf of other profit-making businesses.
If your case reaches the litigation stage, you will be responsible for all additional costs, such as:
- Court filing fees
- Attorney costs
- Any enforcement expenses
- The cost of sending one or more witnesses, which involve travel and accommodation costs.
We’re transparent about this from the outset so there are no surprises later.
Are There Any Abortive Costs?
No. If we’re unable to recover your debt during the amicable or quasi-legal stages, you don’t owe us anything.
But remember that there is financial risk when moving ahead with litigation.
While our contingency fee structure remains the same, litigation itself carries financial risk. Court costs are not recoverable if the case is unsuccessful, and enforcement of a judgment can involve further expense.
We’ll make sure you understand these risks before you commit to legal action.
Do You Carry Out Doorstep Visits?
No. In our view, if you’re going to incur the expense of sending someone to physically confront a debtor, it makes far more sense to invest that money in issuing court proceedings instead.
Once a judgment is secured, the US Marshals Service can be instructed to enforce it. This is a more effective use of resources than an unannounced visit that carries no legal weight.
We Can Collect Bad Debts from USA Clients
Recent reports suggest that up to 50% of invoices in the Americas become bad debt. If you engage Safe Collections as quickly as possible, you can avoid becoming part of those statistics.
For help and advice with debt recovery in America, contact us for free expert advice.
