Effective Debt Collection in Luxembourg
Debt Collection in Luxembourg
Luxembourg has trade relationships with a large number of countries, making it the second-richest in the world. The economy of Luxembourg comprises mostly of banking, steel and industrial sectors.
There is a plentiful amount of UK businesses that provide goods and services to companies across Luxembourg. As reported by Trading Economics, the United Kingdom exports to Luxembourg in 2020 was totalled at $302.53 Million.
The small country size, paired with a large amount of business that occurs there, means that financial issues are more prevalent. These commonly come in the form of unpaid invoices or clients refusing to pay for goods on time.
The occurrence of invoice payment dates being missed is unfortunately a normal part of everyday business life.
Business owners will no doubt prepare for these, but when they occur regularly, action needs to be taken.
Issues related to cash flow can happen more frequently with international clients, as they believe the distance can allow them to stop paying. This perception is of course false, as debt recovery can be undertaken anywhere in the world.
Businesses need a solution to this, and the action of collecting debts can be undertaken in a variety of ways.
If your business is owed money by a client in Luxembourg, you need to take appropriate action to recover it. Our specialists have compiled a list of the options available to help assist with debt collection in Luxembourg.
The Debt Collection Process in Luxembourg
Before options are investigated, you must first have an understanding of the process of collecting debts in Luxembourg.
Money recovery can be challenging in the UK at the best of times, so it is only right for businesses to feel frustrated when this happens overseas.
Debt collection is perceived by many to be a task that is more hassle to complete than the result is worth. This is understandable, as the situation can be very stressful for businesses of every size.
In actual fact, debt recovery is all about having the correct set of skills and knowledge to be successful.
An understanding of the various country laws, language barriers, cultural differences etc. is required during the overseas recovery process. These all factor into how long the debt collection process will take.
As a result, business owners may attempt to recover any money they are owed by themselves. Depending on the size of the company in question, this may be done so through a credit control team.
Recovering an overseas debt alone can be a very costly task to carry out and you may end up wasting lots of time.
There are solutions available that will allow you to focus on growing your business whilst knowing your debts are being recovered elsewhere.
Debt Collection Options in Luxembourg
It has already been established that recovering debt alone is not a recommended option for debt recovery.
Whilst an internal credit control team may serve as a short-term solution for collecting debts, there are better options available.
Throughout history, a common route for businesses needing debt recovery has been to start legal proceedings against the debtor. This is achieved by instructing the services of a law firm or debt collection solicitor.
These types of firms will have specific experience on how best to navigate debt recovery through the courts in different countries. This is something that would otherwise take a long time if done by someone inexperienced in this.
Despite the positive nature of using this option, it can be a costly exercise for your business to carry out.
Debt collection solicitors are notorious for charging a lot of money and operating on a price-drip fee basis. This, on top of the court costs, could end up costing more than the debt is worth in the first place.
No business owner wants to spend a lot of money to recover owed debts when cash flow has already been damaged. If you are owed money in Luxembourg, you need an effective, affordable and pragmatic solution.
The answer to this is to use a business debt collection agency, such as Federal Management.
Instruct Federal Management to Recover Debt in Luxembourg
Using a debt collection agency to recover unpaid money has quickly become the most popular method due to its effectiveness.
Federal Management, for example, has recovered millions of pounds worth of debts for clients since 2004.
Regarded as the UK’s leading business debt collection agency, they provide industry-leading success rates across the board. They operate on an average recovery rate of up to 90% on undisputed debts, which is extremely impressive.
The success of the service is complimented by low commission rates, which start from as little as 8%. This is a no brainer for business owners, as results are maximised whilst the cost is minimised.
The specialists at Federal Management have specific experience recovering debts in Luxembourg and across the world. This has been achieved by having a global network of experts in the field of overseas debt recovery.
If your business has not been paid in Luxembourg, speak to our team of friendly debt collection experts today.
Debt Collection in Luxembourg – Frequently Asked Questions
Can a debt be recovered from a debtor in Luxembourg?
Yes, money that is owed can be recovered from anywhere in the world regardless of location. There are many options available in Luxembourg for businesses to use.
Can a personal debt be recovered as well as a commercial debt?
Debt collection agencies will specialise in the recovery of both personal debts and business debts. Federal Management primarily focuses on commercial debt recovery, however, there are other solutions available for private debts.
What is the best method of debt recovery in Luxembourg?
The most affordable and effective way to recover money that is owed is by using a business debt collection agency. Federal Management has been the UK’s leading agency since opening in 2004.
How much does debt collection in Luxembourg cost?
The cost of debt collection is entirely based on the circumstances of the debt in question. Our experts can provide you with a free pre-action assessment that outlines the costs.
Will my relationship with the debtor be jeopardised during recovery?
The professionalism of our debt collection services means that we do not damage any existing business relationships. We ensure to provide our clients with the utmost peace of mind.