Legal Proceedings: Enforcing US Judgments in Mexico

140915 Enforcing Foreign Legal Ruling in Mexico 2This article focuses on legal judgments obtained in the US for which enforcement is sought in Mexico. Although the situation is specific there may be similarities with other countries in the region or anywhere else in the world.

I have got the question a couple of times over the last few weeks. Are judgments obtained in the US enforceable in Mexico?

Well, not directly. But yes, if confirmed by a Mexican court, in principle US legal judgments can be enforced and executed in Mexico.

Mexican law provides for Mexican courts to recognize and enforce US judgments in Mexico (based on the North American Free Trade Agreement). However, there is no treaty in place between the US and Mexico as to establish the legal situation of judgments between the two countries. This means that the claimant in that respect fully depends on Mexican law. Mexican courts can recognize US judgments but, legally spoken, they are not obliged to do so.

In order to enforce a US judgment in Mexico the applicable court in the US will have to issue a rogatory letter to the applicable court in the Mexican state (or the Federal District, as applicable) in which debtor resides. The letter must rule out appeal. Also, the debtor must have been personally served with the summon and complaint according to US law. Then the domestication proceedings start, in which the file will need to be translated to Spanish, and then the case is officially filed with the Mexican court. Provided that the Mexican court indeed recognizes the US judgment, all possibilities of enforcements as would otherwise apply to a full Mexican case will apply.

Subsequently, the success of, and decision to proceed to, enforcement and execution of the judgment in Mexico depends heavily on the circumstances: the size of the claim, does debtor have income or assets and will he or she be able to pay; and the location and background of the debtor (which may determine the willingness or not of a bailiff to execute the judgment).

If you are interested in learning more on topics about legal proceedings in international debt collection connect on Linked-In or follow me on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.

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How to be successful in international debt collection

140915 International Debt Collection 4International debt collection has its whole own field of expertise. Collecting from foreign debtors can be challenging.

Once a claim is border crossing the circumstances that determine your chances for success can differ substantially from country to country. Your may even have to work with one or more intermediaries to collect locally from your foreign debtor.

Collecting internationally obviously means trying to cash your or your client’s money, but it also means guiding your organization or your client through the entire process of international debt collection.

What are the characteristics of a successful international debt collector? Below are twelve characteristics of what I believe a successful international debt collector should have.

1. Patience

Be patient. Things may take more time than back home. It may be harder to get a grip on debtor’s environment and socio-economic circumstances. Procedures, institutes and bureaucracy may slow things down. Culturally, life in general may be of another pace. you will lose out if you try to push too far.

2. Be prepared to negotiate and settle

No box-thinking please. Don’t just follow procedures or protocols. Be flexible. In some cultures business may be a lot more informal and negotiations may be a professional life style. If a settlement is possible or debtor is seriously willing to negotiate, go for it. Even if that means that sometimes not the full amount can be recovered. There may be no alternatives.

3. Go networking

It is an illusion to think you can be successful on your own. Often you will have to use third parties that have specific knowledge or expertise. Whether that is amicably or legally, or for collections or to locate companies or people. Third parties can be representatives or intermediaries, (other) debt collection agencies or law firms. Make sure though you work with the right people. Go for referrals and not for a fancy website. Ask around. Ask clients or colleagues. Build up an international network of trusted third parties and business partners.

4. Sense of reality

Be realistic. Focus on what can be achieved, and drop the lost cases. Make selections, recoverable versus not recoverable, disputed versus non disputed, direct payment or payment plan, legal possibilities or only amicable, traceable or impossible to locate.

5. Results over emotions

It sounds difficult, but don’t get emotionally involved. Stay focused on the results. That is the only thing that matters.

6. Empathy

Try to understand your client’s needs (also if your “client” is another department within the same organization), ways of working, procedures. And make an effort to understand the debtor’s circumstances as well. They may differ substantially from your own reality and it will help you to make the right decisions.

7. File knowledge

Get familiar with the file. The business client and debtor are in. Show your client you know what you are talking about. He or she should know that the case is in good hands. Also, let the debtor know that you have done your homework and leave a professional impression. Debtor needs to understand you are serious.

8. Know your cards

Scan the situation and possibilities as soon as you get on board. How far is client prepared to go? What is factually possible? Are parties prepared to negotiate or settle? Would legal proceedings be an option or not? What is your mandate, a payment plan, short or long term plan allowed? It will help you determine what fits your client’s needs best.

9. Stay up-to-date with technology

Forget formal letters as a means of communication. See it as a formality to comply with any legal requirements. Use e-mail, Skype, Social Media, WhatsApp, SMS in addition to the good old phone; as phone calls, in my view, are still the main key to success. However, whatever can be done by email, do it by email, in order to be efficient and to make sure that agreements and payment plans are put on paper.

10. Communication

Frequent, efficient and proper communication with all parties involved is key. First of all with your client. Keep the client informed about progress, issues and what is possible and not possible (expectation management is very important!). But also with debtor, keep the pressure on. And with third party intermediaries so that everybody stays focused on your case.

11. Time and resources management

Spend your time and resources well for the benefit of your clients and yourself. Try to find the best balance between what can be achieved and what the cost would be.

12. Be present online and be reachable

Be present online. Your website and / or Social Media profile(s) should be functional. And make sure you are reachable, by clients as well as debtors. By email, Skype, Social Media and phone. Your phone numbers should be easily accesible, consider even making lines available in countries you frequently collect in. The burden to contact you should be as low as possible.

The following are twelve of my favorite characteristics of a successful international debtor collector: having patience, being prepared to negotiate and settle, focused on networking, with a sense of reality, putting results over emotions, with empathy, and file knowledge, knowing his or her cards, staying up-to-date, great in communication, considering time and resources management, and being present online and reachable.

If you are interested in learning more on topics about international debt collection please connect on Linked-In or follow me on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.