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How to recover debt from outside the UK

How to recover debt from outside the UK
When you are chasing a late payment, it is difficult enough to deal with customers in the UK, let alone those located around the world. Different languages, laws, payment regulations and customs combine to make these situations much harder to resolve.

Securing payment overseas is a tough task, often taking longer than it does in the UK, but it is vital to protect both your cash flow and reputation.

One of the main problems is that the collection options available tend to differ from country to country, notably between those registered as part of the European Union and those which are not. This can cause confusion if you are attempting to chase the debt yourself, which is why many businesses choose to engage a debt collection agency to act on their behalf. Third-party intervention, using the buyer’s native tongue, will often result in fast and full payment.

Recover debts inside the EU

One of the benefits of the UK being part of the EU is that business owners can use EU legislation if they are chasing payment from a customer based within it for protection.

You can add Late Payment Act interest and compensation to the principal sum owed and, if you need to refer the debt to a UK-based debt collection agency, they can add their collection cost to your outstanding sum: See Directive 2011/7/EU for details.

If you and the collection agency fail to recover the debt but the buyer accepts liability then you, your collection agency, or your solicitor can issue a European Payment Order and file it with the relevant court. The hub on the European e-Justice portal is the best place to download the form and find out where to send it.

If the customer denies liability then you can use the European Small Claims procedure as long as the buyer owes you less than €2,000.

Recover debts outside the EU

The difference is the lack of cross-border legislation stopping you adding costs and interest to your buyer’s outstanding invoice(s) and a cross-border legal process being unavailable.

Once the buyer breaches your credit terms, it is time to ask for payment. If you get a date that is acceptable to you then record it and get back in touch if they break their promise. When the account is 30 days past due you need to protect your cash flow and consider instructing your debt collection agency to act on your behalf: UK-based debt collection agencies with global offices and agents can collect for you from more than 100 countries around the world.

Legal action in many counties is a last resort with time delays and cost being prohibitive but your collection agency or solicitor will recommend action on a case-by-case basis.