10-Reasons Behind Difficulties in Recovering Delayed Debts
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Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

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10. Reasons Behind Difficulties in Recovering Delayed Debts

As time goes on, why does it become difficult to collect delayed debts and retained debt?

"It is because the debtor goes bankrupt."

 

A debtor who delays the payment for your company is not just delaying payment for your company. Payments are delayed to the other creditors as well. These debtors often go bankrupt after two or three years.

 

Debt collection from a bankrupt company is extremely difficult. This is even more difficult for non-secured general debt. Therefore, it becomes difficult to recover with the course of time. Besides this, there is also a reason that the priority of debt falls. Debtors, whether consciously or unconsciously have a debt priority.

 

First, between domestic and overseas creditors, domestic creditors are given priority. In domestic, payments to banks, large suppliers, employees, etc., are given priority. Time also affects priorities. With current and past debts, current debts generally have higher priority.

 

In this sense, it can be said that debt recovery is easier if transactions continue. However, from the point of risk management, credit transactions with customers with delayed debts should be deferred.

 

This is, in a sense, contradictory but it is unavoidable. In any case, you may think that the priorities for foreign creditors and past counterparties are quite low.

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【PDF】Introduction of Credit Management for Overseas Trade

Introduction of Credit Management for Overseas Trade

36 Things You Need to Know About Credit Management for Overseas Trade

This ebook was created as a resource for those who have trouble with diverse trading or want to learn Credit Management in a rational.

 

Chapter (Excerpt)

  • Major Differences Between International and Domestic Transactions 
  • Trade Reference
  • Bank Reference
  • Collection Agency
  • Reasons Behind Difficulty in Recovering Delayed Debts
  • Mistakes in International Transactions Where Japanese Companies are Prone to Fail
  • Customer Analysis ~ 5 C's of Credit
  • Dangerous Signs
  • Five Principles of Debt Collection