US B2B debt collection typically follows three phases when collecting debts from a US company.
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.
We asked him to explain the USA debt collection procedures they follow in the recovery of overdue accounts from USA debtors.
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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.
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. These vary significantly by state, which is why Safe Collections works with experienced professionals in the USA.
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.
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.
