International Debt Collection is tougher than recovering debts from a client in your own country. Laws, language barriers, timezone differences, and cultural differences can play a part, as can the wider political situation.
If you’re determined to be paid, you might be weighing up the difference between an international debt recovery firm and a solicitor in the debtor’s country.
The truth is that you can be successful with either, but we wanted to lay out the differences so you can make an informed decision.
Table of Contents
No Cost. No Obligation.
100% Confidential.
Basic Differences in Process: International Debt Collection vs Lawyer
The main thing to keep in mind is that international debt collection is designed to be amicable, while going directly to a law firm in the debtor’s country is designed to get an enforceable judgment.
These are not two competing solutions. They are different stages in the same process.
- With international debt recovery, you don’t go to court immediately. Instead, you leverage the debt collection expertise of the firm you’ve engaged: local knowledge, persuasion, negotiation, and an agent working remotely in the debtor’s country.
- Law firms in the debtor’s country will follow pre-collection processes in the country where the debtor is based. This might be equivalent to the UK Letter Before Action, then escalation to court proceedings if that fails.
When you go to litigation as a first port of call, you essentially miss out the initial stage of negotiation and pre-legal collection. Often, negotiation is a successful process, and it can cost less (sometimes there’s no cost to you at all). The question is really whether you feel it’s worth bypassing that initial phase and going down the legal route from day one.
Even with a debtor that isn’t communicating, we find the debt recovery stage is worth trying.
How the Process Has Changed After Brexit
Many of our clients rarely deal with unpaid invoices, which we’re always pleased to hear. However, that means they don’t fully understand how Brexit changed the game when dealing with non-paying EU clients.
In short, UK judgments are no longer automatically enforceable in the EU. This has been the case since December 31st, 2020, when the UK’s split from the EU started to be put into motion in this area. From then on, several important pieces of legislation ceased to apply.
Using a local lawyer can make sense in this situation. It is a way to get around the gap left behind by Brexit, and using a local lawyer is easier than trying to enforce a UK judgment abroad.
Costs: International Debt Recovery vs Law Firms
Safe Collections offers a “no collection, no commission” arrangement for international debt recovery.
If we can’t recover the debt, we don’t charge you commission, and not all debt recovery agencies offer this.
When comparing debt recovery and law firms, this becomes a massive benefit. With an agency, you bypass the expense of letters, hourly legal fees, court fees, or even travel costs and accommodation if your case goes to court.
However, once you commit to this, costs can mount up very quickly. For many clients, it simply isn’t worth the money. Legal costs may initially seem quite reasonable, but if you don’t collect, it can be an expensive and lengthy process with no clear end date.
So while a lawyer in the debtor’s country sounds like a good option, these cost implications need to be considered.
Remember: the cost and speed of debt collection are intrinsically linked. As international debt recovery specialists, our goal is to get you the money you’re owed in the least time possible. We’d hope to bring the matter to a close within weeks or a few months (although this varies, and that isn’t a guarantee). Taking someone to court would most likely stretch into months or even years.
Local Representation: The Best of Both Worlds
At Safe Collections, our unique strength is our robust network of local agents and law firms who negotiate on our behalf in your debtor’s country. That means they use their language, their working hours, and they know how best to lean on them to get them to pay.
A formal demand in the debtor’s own language will go a lot further than an email in English that they may not even read.
This is helpful if you want the advantage of representation in the debtor’s country, but want to avoid (or at least delay) the decision to take on legal costs.
When Is a Local Law Firm a Better Choice than Debt Collection?
To be clear, a lawyer can do more than a debt recovery firm. So we don’t mean to say that legal services firms in a debtor’s country should not play a part in the process.
Legal proceedings sometimes become necessary in a standard international debt recovery claim. But that can be the second part of a two-stage process, not the default solution.
Additionally, there are more complex cases where the case will probably need to go to a lawyer familiar with the local laws and regulations, at least for a review. We occasionally recommend this when we’re handling:
- A debt that is disputed
- Cases involving very complex situations, such as international firms that are insolvent
- Any situation where the debtor makes a counterclaim
- A case that is very close to being too late to claim for
- A situation where you need an enforceable judgment
If you need an enforceable judgment, we will give you our honest view on that, and we can give you the benefit of our extensive professional experience as you decide whether to proceed.
The First Step: Our Free Claim Review
The decision of whether to take your claim to a law firm is not always clear-cut, especially if you have no experience of the debtor’s legal system.
As a first step, send your case details to us for a free claim review. We’ll take a look and advise you on whether we can try amicable debt recovery first, or whether you would save valuable time (and increase your chance of recovery) by going directly to a lawyer.
Remember: if we don’t win, we don’t take commission, so you have nothing to lose.
