Debt Recovery Services for China
The staff of our debt collection agency is trained to retrieve money from customers that are hard to deal with; we will contact the debtor using our strong but diplomatic techniques and make sure your unpaid accounts are quickly sent to your bank account.
Here below you will find a detailed explanation on how we collect debts and both amicable and legal steps we are following.
Please contact us using our placement form without waiting further and get your free quote today.
We usually contact the debtor the same day of account placement.
Placing your file early will increase the success rate!
1.1 Amicable Phase
1.1.1 General
Debt collection in China has a long and colorful history, leading to its eventual prohibition by the Chinese government late in the 19th century. That law remains in effect today; while companies do still strive to collect debts, they operate as law firms that exist outside the law banning debt collection companies.
That said, Debt Collection Agency Service China does still provide amicable collections services in mainland China. Our offices are located in Hong Kong, which has long been exempt to the debt collection ban. Our company uses trusted partners in Hong Kong to pursue local collections services in China.
1.1.2 Local agent
Collection Agency Service China collects debts in Hong Kong; our services can also be used for debts on the mainland through our many partnerships there.
1.1.3 Interests
Chinese debts are typically not subject to interest rates, and debtors in China are not used to paying interest on their outstanding debts placed for collection. If and when a debt enters litigation, though, Debt Collection Agency Service China will calculate interest on the loan using the current interest rate set by the People’s Bank of China, plus 30 to 50 percent.
1.1.4 Debt collection costs
Debt Collection Agency Service China can charge debt collection costs to the debtor, but debtors are not used to paying them. They’ll typically negotiate for a removal of these costs in exchange for a settlement of the debt.
1.1.5 Prescription
Laws in China typically bear out a statute of limitations on debts of two years. This limitation is part of the civil rights code, and applies to:
– Claims for bodily injury
– Sales of substandard goods or services
– Property damage
– Refusal or delays in paying rent
The statute of limitations applied to carriage goods delivered by sea is reduced to just one year. By train, that is further reduced to 180 days.
The statute of limitations can be interrupted by any of the following:
– One party serves a document of claim on the opposing party
– One party makes a claim by correspondence or by data message, and that claim reaches the opposing party
– A financial institution deducts the debt and interest out of the opposing party’s bank account
– The opposing party cannot be located, and an announcement of claim is made in a national medium near where the opposing party was formerly located
These limitations are the most common examples, though other specialized cases have been known to interrupt the statute of limitations as well.
1.1.6 Accepted and most common payment methods
Chinese debts are typically satisfied by cheques or bank transfers.
1.1.7 Types of companies
Limited liability company (LLC):
Companies bear debts with property and assets. Minimum capital is 30,000 RMB, paid in currency or with intellectual property, land-use or other properties. Capital contributes paid by shareholders cannot be less than 30 percent of registered capital. Shareholders are responsible for company’s financial situation.
Joint stock limited company:
Companies bear debts with property. Minimum capital is 5,000,000 RMB. Shareholders are responsible for company debts based on their proportion of company shares. Company can be established by stock flotation or promotion.
1.1.8 Sources of information
Chinese lawyers can access debtor financial information via the Industrial and Commercial Authorities. That includes balance sheets and yearly income statements. Other information, like shareholder contact information and bank account information, can also be accessed. A private investigator is usually not necessary due to this information’s availability.
1.2 Retention of Title
1.2.1 General
The seller typically maintains ownership of any goods or services until they have been paid in full only when both the buyer and seller have agreed to this via contract. Without such an agreement, the buyer owns everything once it has been delivered.
Contract Law:
Article 133 states that ownership of a targeted good or service is transferred upon delivery, unless a signed document states otherwise.
Article 134 states that parties may stipulate retention of seller ownership in a purchase and sale contract.
1.3 Safeguarding measures
When debtors can not fully satisfy a debt, Debt Collection Agency Service China will ask for a repayment plan via installments. This agreement is valid and enforceable and does not need to be notarized, though going through a notary does service to reinforce the legitimacy of the agreement.
When this type of agreement is created, a written contract is required. This is also true of mortgage agreements established on buildings, fixed land, construction activities, and contracted management of barren land.
1.4 Legal Procedures
1.4.1 General
Legal action between people and companies is regulated by private law in China. There is no need to give any warning before beginning a lawsuit. In some cases, a pre-court procedure may be initiated. This process can often be skipped.
1.4.2 Legal System
China has four court divisions within its legal system:
– Supreme People’s Court
– High People’s Courts
– Intermediate People’s Courts
– Basic People’s Courts
The Basic People’s Courts are the courts of first instance and have first jurisdiction over civil cases. The Intermediate People’s Courts have civil jurisdiction over cases with a more significant impact. High People’s Courts serve as the court of first instance for civil cases with the most far-reaching impact. The Supreme People’s Court interprets laws and legal questions regarding judicial proceedings.
1.4.3 Required documents
Lawsuits in China are subject to the following requirements:
– Plaintiff must be a Chinese citizen, legal person, or organization, with an interest in the case
– There must be a defendant
– There must be specific claims, clauses, and facts, leading to the lawsuit
– Parties to the case must provide their name, gender, age, ethnic status, occupation, work information, and home address to the court
– Evidence must be provided, as well as source information about each piece of evidence
Upon initiation of a lawsuit, copies of the lawsuit statement and all evidence need to be provided based on the number of defendants that are party to the suit.
1.4.4 Legal dunning procedure
A creditor who requests payment of a pecuniary debt, or the recovery of installment payments fro ma debtor, may apply to the Basic People’s Court when the following conditions exist:
– No other debts or disputes exist between debtor and creditor
– Order of Payment can be served to the debtor
Within 15 days of receipt of the Order of Payment, the debtor must clear their debts or submit a written dissent to the People’s Court in writing. If neither condition is met, the creditor can apply to the court of execution of the debt within the same 15-day period. Once submitted, the Order of Payment is terminated and the creditor can bring an action against the debtor.
1.4.5 Lawsuit
Lawsuits can only be filed by the creditor and are typically brought under the People’s Court nearest the debtor’s physical address. The case falls under the jurisdiction of the court nearest the defendant’s domicile. A lawsuit based on a contract dispute will be under the jurisdiction of a People’s Court local to the defendant, or nearest to the location where the contract is effective. It’s worth noting, however, that not all laws concerning jurisdiction are stated or clarified by the Chinese government.
1.4.6 Appeal
Either party can file an appeal if they disagree wit the result handed down by the loal People’s Court of first instance. This appeal must be filed within 15 days, and it must be in writing. The appeal’s content needs to include the name of the parties, the names of all legal representatives, the name of the People’s Court where the case was tried, the case’s file number, the cause of action, and the reasons for appeal.
1.4.7 Costs
Legal costs are typically assigned to the losing party in a lawsuit.
1.4.8 Expected timeframe
Cases tried via summary procedure must be completed within three months of the date it is entered onto a trial docket. When the case is handled via normal procedure, it must be completed within six months. If an extension is necessary, a six-month extension can be permitted if the president of the court approves such a motion. Any further extensions must be reported to a higher level of the People’s Court system. The appeal of a case must be completed within three months after docketing by the People’s Court.
1.4.9 Interests and costs in the legal phase
Interest and legal costs incurred during the suit can be claimed as part of the balance of the debt.
1.5 Enforcement
1.5.1 Enforcement in debt
All parties to a lawsuit must comply with the judgment or written orders in civil cases. If either party refuses to comply, the opposing party can apply for execution of the judgment. Any fees arising thereof will be paid for by the debtor. The applicant does not need to repay.
1.5.2 Enforcement in movable goods
If a debtor subjected to the process of execution of the debt does not fulfill their obligations according to the execution notice, the People’s Court has the right to make inquiries with the debtor’s banks, credit accounts, and other companies that deal with the debtor’s financial matters. The People’s Court can then freeze those accounts or claim deposits toward the payment of the balance.
The People’s Court is also able to freeze and sell the debtor’s assets or property via auction in order to ensure the satisfaction of outstanding debts via execution.
1.5.3 Enforcement in immovable goods
The same policies apply as in 1.5.2.
1.5.4 Expected timeframe
Enforcements typically take less than six months, but can be extended if necessary.
Whatever the debts reason, we will work it, fast.
As debt recovery agency, we’ve seen of the disputes and excuses debtors say when they fail to payback our Clients.
We know how to rreply and negotiate, using the right level of pressure and get you paid quickly.
