International debt collection

Every year, the volume of international trade increases, in general in the world and in particular between Israel and the world. Befitting a world of international trade, the chances of debt formation are greater due to the “rolling credit” culture that is characteristic not only of Israel, but is a significant and inseparable part of the global supply chain. These debts are a real problem for business owners or companies, even more so when large sums of money are involved.

There are quite a few reasons why business customers can decide not to pay regarding the service or product they received from the business owner, some of the reasons for this are: customers who try to avoid payment, customers who are not satisfied with the service or product they received, customers who forget to pay the invoice on time and run into cash flow problems and other reasons.

“Many private individuals and business owners who live in Israel experience many difficulties in situations where they have to collect debts from foreign countries, this is because they experience great uncertainty from the moment the debt is discovered until the legal procedure itself – they actually do not know how to collect them and what is the most effective solution to follow.”

He further emphasizes, the consequences of the problem-

“And then we, in quite a few cases as Israeli business owners, decide to waive the debt, even if it is a relatively large amount of money – because we don’t always have the knowledge or, rather, the desire to deal with the claim. Go try to understand now the laws of debt collection in foreign countries, and how the legal system there works. The intensity of the uncertainty you may experience in such a situation is tremendous.”

So more specifically, where do many Israelis experience the difficulty?

“One of the most prominent problems we may encounter when it comes to the collection of international debts is finding the right collection company or the right lawyer who will manage the collection process and collect the debt from a foreign country. Many times, Israelis are sure that any lawyer can carry out the task of collecting the debt when it is an international debt – this is a mistake and it is absolutely not true, when you choose a lawyer with expertise and experience in this field – the collection becomes much easier. On the other hand, a lawyer who is not experienced in debt collection, and in particular in international debt collection, may not only not help, but may even harm us.”

Beyond the matter of choosing a lawyer or a law firm, there is another problem – which is the difference in the costs of legal treatment in a foreign country, as he explains, according to him – another prominent problem encountered by Israelis in their attempt to collect the debt found in a foreign country is the large amount of money that must be paid for the treatments which are carried out in foreign countries.

And regarding the cultural differences, he adds: “This, without mentioning the difficulty that exists due to the cultural and language differences between all the foreign countries in the world and our country. In many cases, misunderstandings arise due to various reasons including: misunderstanding of the legal system operating in a foreign country, waste of important and expensive time, along with other problems. There is no denying the fact that international debt collection is a difficult and complex task that must be treated seriously and professionally.”

It is customary to divide the countries where debt collection takes place into two groups:

The first group includes the countries where the debt collection process is considered simpler, these countries are countries that have signed a mutual international treaty that refers to respecting judicial decisions with the State of Israel; On the other hand, the second group includes the countries that are not signatories to an international treaty with the State of Israel.

Debt collection in the US

It is important to understand that in the USA, for example, the authorities work to protect the debtors who live there from various collection companies that work in unpleasant ways to collect debts in certain cases. There are cases in which the collection companies threaten the debtors with threats that are considered unreasonable and even withhold information from them – according to the words of Attorney Reifer.

Therefore, it is very important that if you work with Israeli lawyers, that they have the expertise in working with American law.

The most prominent goals of the Fair Debt Collection Practices Act are:

• Ensure that the collection procedure is conducted in a proper and fair manner.
• Ensure that during debt collection no offensive activity is carried out.
• Allow the debtor to receive full information regarding his obligations so that he has the possibility to know for sure that

The information it relies on is reliable information.

Furthermore, the Debt Fair Collection Practices Act also works to regulate other issues including: ways in which the debt collector can act to collect the debts, ways in which the debtor can act to protect himself, the law also regulates the penalties received in cases where Breaking the Law.

According to the law in the United States there is no obligation to be a lawyer in order to engage in debt collection, and in fact anyone can engage in debt collection there. And as in any unregulated field – extreme caution is required.