1.


Amicable collections

1.1. General information

We maintain a professional collections process and focus on the relationships between you and your debtors at all times. We pursue debtors within the bounds of federal and state laws and liaise with you and our relationship management team to ensure that we serve you efficiently and effectively.


Our collectors work to ensure that if the initial collections phase is not productive, the file is adequately documented to fully utilise the second tier of our collections process - the legal phase.


When there is a dispute, we aim to reach an amicable solution between you and your debtor. We do this by analysing all the contractual documents (e.g. signed contracts, orders, confirmations, invoices, delivery notes, as well as standard terms previously agreed upon). All of our investigations are completed with the assistance and agreement of our legal team.

1.2. Local agents

We have a network of local attorneys to assist with collections if necessary. Currently we do not offer field service to visit debtors in the U.S.

1.3. Interest

We may charge interest back to debtors. Currently, we add 4% interest to each case placed with our office in the U.S. However, in most states, if no signed contractual agreements exist, then we cannot exert legal means to collect the interest. If the contractual interest is greater than 4%, then the interest we charge will match that of the agreed amount. U.S.-based debtors are not used to paying interest.


Often the actual amount of interest is considered a negotiation tool between debtors and collectors.

1.4. Debt collections costs

Collection costs cannot be added to your case unless a signed contractual agreement exists between you and your debtor. However, even if the contractual agreement includes the collections costs, they are often used as a negotiation tool between the debtor and collectors.

1.5. Prescription

A statute of limitations governs the time period within which a lawsuit must be commenced. Statutes of limitation vary from state to state, but are generally between two and 10 years for an open account or sale of goods, and between three and 15 years for a written contract.


The limitation period is suspended or recommenced if the debtor acknowledges the balance by partial payment, or if legal action is undertaken prior to the expiration of the statute.

1.6. Accepted and most common payment methods

The most common payment methods are bank transfers, wire transfers, and cheque payments.

1.7. Types of companies

Sole proprietorship

(sole trader / proprietorship)

  • No legal distinction between the owner and the company
  • The owner has unlimited responsibility for all the company’s losses and debts

Limited liability company (LLC)

  • This legal form of company provides limited liability to its owners
  • The owners of an LLC, called members, are protected from some or all liability for the acts and debts of the LLC depending on each state’s shield law
  • The principals of an LLC can use many different titles (e.g. member, manager, managing member, managing director, chief executive officer, president, or partner). As such, it can be difficult to determine who actually has the authority to enter into a contract on the LLC’s behalf

Corporation

  • A corporation is created under the laws of each state as a separate legal entity that has privileges and liability that are distinct from those of its members
  • The shareholders of a business corporation have limited liability for the corporation’s debts and obligations
  • Several different types of corporations exist (e.g. C corporation, S corporation, LLC)

1.8. Sources of information

In the U.S., we have the ability to assess the status of debtors’ businesses, including real estate and other assets, through business reports and in-house skip tracing. In combination with our own phone contacts, we can obtain accurate impressions of debtors’ financial situations, and we are able to recommend the next steps.


In most of the 50 states, companies register with the Secretary of State, which can be accessed online. We have direct access to these websites and can obtain additional information on shareholders, status, and some corporate developments, which may be published.


A debtor with an unknown address can be traced by our in-house skip tracing efforts. We are able to access many different websites to assist in locating the debtor, including business financial reports and insolvency websites. We also have the ability to employ external skip tracing agencies for additional information for an additional fee.


(End of chapter 1 - Amicable collections)

Opt in to our latest publications*
and get the Debt Collections Handbook - Global for free

*We will only use your data in accordance with our Privacy Statement. You can unsubscribe at any time.