Do You Need an International Collections Agency



Despite their close relationship, Americans and the British sometimes have trouble communicating. Are delicious fried potatoes called French fries or chips? Is that a truck delivering a desk to your apartment or a lorry bringing a bureau to your flat? The two countries also have differences in how they approach legal matters, including debt collections.

The United States has a reputation of being a place where taking risks is rewarded. One way this is shown is that bankruptcy and other debt related laws tend to favour the debtor, not the company that is owed money.  In the UK, on the other hand, the laws tend to favor the person or company who is owed money. In the US, bankruptcy is seen as a way of helping the debtor.  Despite what F. Scott Fitzgerald said, there are plenty of second acts in the US, and bankruptcy is one way that companies and individuals get to their second act.

Individuals who declare Chapter 7 bankruptcy in the US no longer have to pay most of the money owed and can be out of bankruptcy within 3 months. In the UK, bankruptcy is often petitioned for by the person who is owed the money, bankruptcy lasts for 12 months and there is a much heavier stigma attached to being bankrupt than in the US. A company who is owed money by a person or company declaring bankruptcy in the UK is much more likely to be able to recoup that money than if the individual or company declares bankruptcy in the US.

Collecting information on companies before loaning them money might be slightly easier in the UK. There are several sources of valuable credit information. There is statutory reporting in The Gazette, the centralized company record system of Companies House, and the bad debt reporting system of CAIS, CIFAS for fraud data. There is also information available on individuals through Experian or Dun & Bradstreet, and the Land Registry, all of which are easily accessible for daily monitoring. In the US, there are four main credit bureaus. But much of the credit assessment companies do is based on documents provided by borrowers. Regulations around privacy can make validation of these documents somewhat difficult. Because of this, it’s critical that companies doing business in the United States develop a solid credit application process. Kaplan Group, an international commercial collection agency, has developed a guide for those needing to create credit applications. Having a credit collection agency that understands not only the basic cultural differences, but also the wide variety of collection laws that differ throughout the 50 United States is important if one is doing business in the US.

The Internet has made more and more businesses international. Smaller businesses cannot set up branch offices throughout the world and so must rely on lawyers, collection agencies, and other professionals who can reach across political and cultural boundaries. Money and debt are touchy subjects in any culture and having legal, technical, and cultural expertise in a country becomes more important the farther away the country is located (both geographically and culturally) from your home base.


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