You may have or have had a client in Mexico that does not pay, and eventually you end up or have ended up with an international debt in Mexico.
To determine your chances to successfully collect the debt in Mexico, you should ask yourself the following six questions.
Is your debt in Mexico business or consumer related?
The first questions is whether your debt in Mexico is business or consumer related. Business related debts often have more likelihood to receive a positive response (full or partial payment, settlement or a payment plan) than consumer debts. For international consumer debts, one needs to be realistic as to possibilities to collect, as the response rate is generally low.
How old is the debt in Mexico?
The age of the debt is very important. Being on top of collections in Mexico, and showing that towards your debtors, is vital to be taken seriously in your attempts to collect a debt. The older overdue invoices are, the more difficult it becomes to collect in Mexico, as the same goes everywhere. Mexico’s period of limitation is five years. After five years, it is legally very hard if not impossible to still collect. But any outstanding invoice older than a year will face though times.
What is the size of the debt in Mexico?
How much does your debtor in Mexico owe you? How much are we trying to collect? Don’t spend too much time on the smaller amounts, focus on the mid-size amounts, and be realistic about collection possibilities regarding the bigger amounts.
Can we contact or locate your debtor in Mexico?
Another essential question is: do you have, up to date, contact information of your debtor in Mexico, so that he or she can be approached or located? Essential information includes: full company name (including the legal name how the company is constituted in Mexico) or full name of the person (including second or more first names and second last name!), full address details, telephone numbers, cell phone numbers, e-mail addresses and Social Media profile links. It is important to keep such information up to date during the whole commercial or consumer relationship, as it may turn out to be vital once payment problems show up later on.
Do you have the documentation to support the debt?
Important to make a strong case towards your debtor, and to show leverage to start legal actions in Mexico against your debtor to legally enforce payment of overdue invoices or a contractually agreed payment, is to have on file the documentation to support your claim in Mexico. Supporting documentation regarding the debt may consist of contracts, invoices, order forms, order confirmations, debt acknowledgement, and (email) correspondence about the outstanding invoices. Note: because of the complexity (or ineffectiveness, you may choose yourself how to define it properly!) and costs of legal proceedings in Mexico, it is highly unlikely you may ever end up suing a debtor in Mexico, unless you handle the file as a matter of principle and / or the claim is really – I mean, really – substantial; not just a couple of tens of thousands of dollars. Click on the following links for more info on legal in Mexico or Latin America.
What is the reason the debtor in Mexico is not paying?
Last but not least: why is your debtor in Mexico not paying the overdue invoices? Did your debtor indicate financial problems? Or is the debt, to your knowledge, disputed by your debtor? This helps guiding debt collection in Mexico towards attempts to fully collect, look for a settlement or payment plan, or, which can sometimes just be economically the best option, choose to recommend you to write the debt off (and stop spending more time or money on something which is practically impossible to collect).
In order to determine chances for success in collecting a debt in Mexico, we suggest to ask yourself if the debt is business or consumer related, how old the debt is, what the size of the debt is, if you possess up to date contact details of the debtor in Mexico, if you have on file the documentation to support your claim, and what the reason is or may be your debtor in Mexico is not paying.
To participate in conversations about international debt collection in Mexico and Latin America please join the Linked-In Group Debt Collection Latin America.