Foreign debt collection refers to debt recovery abroad. It is simply another term for collecting debts from debtors in another country. The procedures and laws that apply may vary depending on the country in question, but the concept is basically the same as international debt collection.

Navigating debt collection rules in different countries can be challenging for creditors with debtors abroad. There is no single set of laws for international debt collection, as the rules for debt recovery are always determined at a national level. Therefore, when collecting debts, the laws of the country where the debtor resides are applied.

Generally speaking, two overarching principles apply in most countries:

1. Collection agencies often need to have a special license to operate, ensuring that debtors are protected from unfair practices.
2. Typically, there are regulations that prevent certain actions, such as contacting debtors at unacceptable times or threatening legal action without legal basis.

To summarize: There are no common international rules for debt collection and debt collection laws are determined by the country where the debtor is located. It is also common that a debt collection license is required and that there are rules for the proper treatment of the debtor.

The first step in a debt collection case is the so-called out-of-court debt collection process, where an attempt is made to reach an agreement on payment without involving the legal system. The debt collector informs the debtor of the claim and states that legal action may be the next step if payment is not made. This approach can often get the debtor to repay faster.

Local collection agencies are often very effective in this phase as they know the local laws, language and business culture. Some of the measures a local collection agency can use include:

• Credit rating

• Contact attempts and negotiations

• Increased pressure, such as informing about possible lawsuits

• Physical visits to the debtor (only against payment and only applies to separate countries)

If the debtor does not respond to initial collection attempts, the creditor can choose to proceed with a lawsuit. Legal proceedings are usually conducted in the country where the debtor resides, and many countries offer a simplified court procedure for uncontested claims, which makes the process faster and cheaper.

A common procedure for uncontested claims is called an 'order for payment', which makes it easier for the creditor to get a judgment in the case. When the creditor receives a judgment, it can be used as legal proof that the claim is valid. In most cases, a court case will be brought in the debtor's country, unless otherwise agreed between the parties.

If the debtor fails to pay after a judgment, the creditor can request enforcement. This is done via the enforcement authorities in the country where the debtor's assets are located, as they can only recover assets within their own country.

This usually requires the creditor to have a judgment from the country where the enforcement is to take place. In order to enforce a judgment from another country, there must be an international agreement between the countries involved that allows for cross-border debt recovery.

If you want help collecting debts internationally, you can easily transfer your case to us via our online platform. Simply fill out a form with the necessary information about the debtor, such as

• Invoice details (with the option to upload a copy)

• Debtor's full name, phone number, email and address

• Date of birth, if applicable/ VAT number

• Information about the agreement or contract on which the claim is based

• Any additional information, such as VAT number or contact person.

Once the case is created, all you need to do is approve the terms and conditions put forward and we will take care of the further processing.

We offer debt collection services worldwide, so no matter where your business operates, we can help. With local offices in Denmark, Sweden, Norway, Finland and Germany and a global partner network in over 180 countries, we ensure effective debt collection solutions. Our local partners adhere to strict regulations and are committed to following applicable laws and debt collection practices, which means you can feel confident letting us handle your case no matter where in the world the debtor is located.

The first thing you can do is try to resolve the issue internally by contacting the customer directly. In many cases, late payments are not due to malicious intent, but rather practical issues such as administrative errors or missed payment deadlines. A friendly reminder in the form of an email or phone call can often be enough to get the customer to act. Taking this step will give you a better understanding of why the payment is late and can clarify if further action is needed or if the case can be closed quickly and efficiently. Remember to maintain a professional tone as this can strengthen your relationship with the customer in the future.

International companies can have very different payment terms to those we are used to in Denmark. For example, it's not uncommon for large companies in other countries to operate with payment terms of 60, 90 or even 120 days. These longer payment terms can mean that even if you have requested payment within a shorter period, the company will follow their own standards and pay later. It is therefore important to take into account what payment terms your foreign customer has agreed with you so that you can avoid unnecessary conflicts. If you haven't included these terms in your contract, it can be difficult to maintain a shorter payment term.

When it comes to international payments, you should be aware that transfers often take longer - especially compared to national payments. In many cases, it can take 2-5 business days for a transfer to be completed, depending on the countries involved. In addition, national holidays, differences in bank opening hours and local regulations can affect transfer times. This means that even if a customer pays in a timely manner according to their local conditions, the money may take several days to reach your account. Therefore, it's important to be patient and not initiate collection actions too early, as this can create unnecessary conflicts.

Choosing the right debt collection company is crucial when you need to recover debts abroad. It's important to choose a company that has experience and expertise in the country where your customer (debtor) is located. Local debt collectors have a unique understanding of the legal, cultural and economic conditions that can affect a debt collection case. For example, debt collection laws and regulations can vary significantly from country to country, and a local debt collection agency will be able to navigate these differences. Furthermore, they will often have access to national databases of debtors' payment histories and other tools that can help collect the debt more effectively.

When you have customers in multiple countries, handling debt collection yourself can quickly become complex. In these cases, choosing a debt collection company with a global network is a great advantage. At Collectia, we work with partners in more than 180 countries, which means that we can handle your international debt collection cases no matter where your customers are located. We make sure your cases are handled by the best local experts in each country who know the specific rules and cultures that apply to the debt collection process. This way, we ensure you get an efficient solution without having to juggle multiple partners. This makes the debt collection process much smoother and more manageable for you.