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Legal Judgements and Bankruptcy - PowerPoint

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									International Receivables
COHEAO Conference
Boston, MA U.S.A.
July 30th, 2007
Table of Contents


1. Situation Abroad


2. Differences to the U.S.


3. Options with Pros & Cons


4. Recommendations


5. Addresses



2   International Receivables
1. Situation Abroad




3
International Economic Data
                                         Population                                 Consumer Bankruptcies                                                                                        International Economic Growth
    Country*
                                          in million              2006                     2005             06 to 05           % of Pop.                                                                           ( 19 9 9 - 2 0 0 8 )
                                                                                                                                                                           4.5
Germany                                         82,310              121,800                 99,720                22.14%          0.1480%                                  4.0




                                                                                                                                               Change of real GDP (in %)
                                                                                                                                                                                                                                                                        USA
UK                                              60,210              116,929                 79,426                47.22%          0.1942%                                  3.5
                                                                                                                                                                                                                                                                        Japan
                                                                                                                                                                           3.0
Netherlands                                     16,367                  3,227                3,311                -2.54%          0.0197%
                                                                                                                                                                           2.5                                                                                          Germany
Norway                                              4,681               1,077                1,431               -24.74%          0.0230%
                                                                                                                                                                           2.0                                                                                          EU
Austria                                             8,309               7,583                6,462                17.35%          0.0913%                                  1.5
                                                                                                                                                                                                                                                                        OECD
Sweden                                              9,127                385                       455           -15.38%          0.0042%                                  1.0

                                                                                                                                                                           0.5
Switzerland                                         7,507               5,840                5,714                 2.21%          0.0778%
                                                                                                                                                                           0.0
Europe                                        188,510             256,841              196,519                   30.70%          0.1362%                             -0.5
                                                                                                                                                                                 1999     2000    2001   2002   2003     2004     2005    2006   2007   2008

                                                                                                                                                                                                                   Year
USA                                           300,889             572,696           2,039,214                    -71.92%         0.1903%
                                                                                                                                             Source: STATISTIK AUSTRIA, WIFO (as of June, 2007)
* European countries with a Cosumer Bankruptcy Law in force
Source: Creditreform, Insolvenzen in Europa (2006)


                                              OECD Composite Leading Indicators                                                                                                           International Unemployment Rates 2007
                                                                        (2006/ 2007)
                            3.0                                                                                                                                                                                                                     25.00%
                            2.5                                                                                                 EU 15
    Change to prior month




                            2.0                                                                                                                                                     4.20%
                                                                                                                                Germany
                            1.5                                                                                                                                                                                                                                South Africa
                                                                                                                                                                                                 7.80%
                                                                                                                                USA
                            1.0                                                                                                                                                                                                                                China (2005)
                                                                                                                                                                                        4.30%                                                                  India (2006)
                            0.5                                                                                                 M ajor
                                                                                                                                Five Asia*                                                                                                                     Australia
                            0.0                                                                                                 Brazil                                                       7.00%
                                                                                                                                                                                                                                                               European Union
                                  May




                                                                                                     Mar
                                                                        Nov




                                                                                                           Apr
                                                                  Oct
                                        Jun




                                                     Aug

                                                            Sep




                                                                                     Jan

                                                                                             Feb
                                              Jul




                                                                              Dec




                                                                                                                  May




                      -0.5                                                                                                                                                              4.50%                                                                  USA
                                                                                                                                Russia
                      -1.0
                                                                                                                        * China, India,
                      -1.5                                                                                              Indonesia, Japan
                                                                                                                        and Korea             0.00                                 0.05           0.10          0.15            0.20         0.25         0.30
                      -2.0
                                                                                                                                                                                                                       Rate
                                                                                                                                             Sources: www.businessinafrica.net; Australian Bureau of Statistics; CIA, The World Factbook; U.S.
Source: OECD                                                                                                                                 Department of Labor; OECD




4                           International Receivables
The Different Aspects Of The Legal Situation Abroad
Generally:                                   Law:
 Debt collections are governed by            System (Code Law -> e.g. Germany,
  national law!                                Case Law -> e.g. UK)
 Many countries = Many different laws        Statute of Limitation (e.g. EU 3 Years)
  and procedures                              Legal Action and Proceedings (e.g.
Collections:                                   simplified proc. for undisputed debts)
 Requirement of a License (in most           Acknowledgement of U.S.
  European countries necessary)                Judgements
 Collection Standards (e.g. set by a         Obtaining a Local Judgement
  National Association)                       Enforcement/Foreclosure/Bankruptcy
 Prerequisites to accept claims in            Procedures
  general (e.g. due, defaulting, unpaid,     Cultural and Political Restrictions:
  undisputed) and from abroad (e.g
  language, currency)                         Religion, Traditions, Class Systems
 Approach to Debtors (What is legal?         Exchange Control Regulations
  [e.g. calculation of interest; reporting    Form of Government (e.g.
  to the CB])                                  Dictatorship, Monarchy)

5   International Receivables
2. Differences to the U.S.




6   International Receivables
What is different from the U.S.?
            Area                                   USA                                Abroad (e.g. Germany)
                                                                            All activities, including pre-legal, legal
    Collections in                Pre-legal activity; phoning the debtor,   action/litigation, enforcement and
    general                       avoidance of mail                         bankruptcy procedures, long-term
                                                                            monitoring (up to 30 years)
                                  Phoning the debtor in different ways      1. Writing letters
    Pre-legal
                                  (dialer campaigns, unattended             2. Phoning the debtors
    Collections
                                  messages etc.)                            3. Field Service
    Relationship
                                  Business -> Revenue and Success           Legal Matter -> Trust and Reputation
    Client-Servicer
    Competition of                Competitive Race of numerous              One-to-One Relationship still common
    Servicers                     Servicers                                 (although changing)
                                                                               Upfront Fee per Account
                                  Commission rate (Contingency, based          Commission Rate (Cont., Acc.)
    Charges
                                  on Accounts)                                 Refund of Expenses (CB, Skip Tracing,
                                                                                Court, Enforcement etc.)
                                                                            Accounts stays at Servicer; no Recalls and
    Length of                     1st: 6 Months
                                                                            new Placements; Collection Companies
    Collection                    2nd: 9 Months
                                                                            often refuse to accept Accounts which
    Efforts                       3rd: 12-18 Months
                                                                            have already been worked by another CA




7     International Receivables
3. Options with Pros & Cons




8   International Receivables
What are the potential partners?
                                  Options                      Pros                                   Cons
                                                                                      Not promising: Language barrier,
                       U.S. Attorneys doing       One contact partner who you
                                                                                      no on-site knowledge (e.g. skip-
                       the Job from the U.S.      know
                                                                                      tracing)
                                                                                       Expensive
                                                   One contact partner
    Attorney           International Law Firm                                          Int. law firms are not interested in
                                                   Covers many countries
                                                                                        collections
                       U.S. Attorney with an
                       international network of                                       Those Attorneys do not exist!
                       local Attorneys
                       U.S. Company                                                   Not promising: Language barrier,
                       addressing to debtors      Only one partner who you know       no on-site knowledge (e.g. skip-
                       abroad                                                         tracing)
                                                   Only one partner
    Collection                                     Standard commission rates for     Does not cover all countries, but
                       International Company
    Company                                         all countries possible            the most important
                                                   One statement for all countries
                                                                                       Many different ways of charging
                       U.S. Company with an
                                                  Covers many countries                Many different partners
                       international network
                                                                                       Many different languages
                                                                                       Expensive
                                                                                       Varying costs according to
    Chamber of Commerce                           One contact partner                   country
                                                                                       Often only one letter; then legal
                                                                                        action will have to take place



9     International Receivables
4. Recommendations




10   International Receivables
Who is your right partner?

 •     Be always aware of the variety and diversity of the world outside the U.S.
       So, choose a partner who is equal to the situation and has already
       established an international network.

 •     Think of all the administrative work you will have when dealing with
       different international partners. So, try to find a partner who can do this
       work for you like a clearing-office.

 •     You will never know in advance, and nobody will tell you honestly, which
       costs you will have to bear. So, if possible negotiate a standard
       commission rate with your partners, at best valid for all countries.

 •     Be aware that your international partners expect a long lasting
       relationship and will possibly need time to work your account successfully.
       So, choose a partner you trust.




11   International Receivables
5. Addresses




12   International Receivables
Who can help you with your international receivables?
                    USA / International                                      International
                    CCA                                                      EOS Holding GmbH & Co. KG
                    Peter Doolan                                             Steindamm 71
                    Vice President of Business Development                   20099 Hamburg                     U.S. Member:
                    700 Longwater Drive, 2nd Floor                           GERMANY                           CCB CREDIT SERVICES INC.
                                                                                                               5300 South Sixth St.
                    Norwell, MA 02061                                        Phone: +49-40-2850-0              Springfield, IL 62703
                    Phone: 1-800-866-9177 Ext. 14139                         Fax: +49-40-2850-1500             Phone: 217-786-4800
                    Fax: 781-681-5196                                        www.eos-solutions.com             www.ccbcreditservices.com
                    Email: peter.doolan@cca-us.com
                    www.cca-us.com

                                                                                            Australia and New Zealand
                                                                                            New Zealand Collectors Association
                                                     Europe                                 Keith Goodall, President
     USA                                             Federation of European National        P.O.Box 9664, Newmarket
     ACA International                               Collection Associations FENCA          Auckland / NEW ZEALAND
     P.O. Box 390106                                 Av. de la Gare 33                      Tel. :+ 64-800-505101
     Minneapolis, MN 55439                           1001 Lausanne                          Fax: + 64-800-808-09379
     Phone: 952-926–6547                             SWITZERLAND                            Email: keith.goodall@tcmgroup.co.nz
     www.acainternational.org                        Phone: +41-21-3492555
                                                     Fax: +41-21-3492556
                                                     www.fenca.org

                                                                                            South Africa
                                                                                            ADRA
     International                                   International                          (Association of Debt Recovery Agents)
     U.S. Chamber of Commerce                        TCM Group International, Ltd.          P O Box 13641
     1615 H Street, NW                               Secretarial Office:                    Humewood
     Washington, DC 20062-2000                       Brusselsesteenweg 6-16                 6013
     Main Number: 202-659-6000                       B-3020 Herent (Leuven)                 SOUTH AFRICA
     Customer Service: 1-800-638-6582                BELGIUM                                Phone: +27-41583-5396
     www.uschamber.com                               Tel: +57-1-3255500                     Fax: + 27-41583-5738
                                                     Fax: +57-1-3497300                     EMail: thurlw4@iafrica.com
                                                     www.tcmgroup.com                       www.adraonline.co.za



13   International Receivables

								
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