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Debt Collection China we
ensure you get your money
With a different language, writing system and significantly different business practices, collecting your outstanding claims in China can seem like a daunting task. Add to that the fact that legal proceedings in China are very different from those in most countries, and it can feel disheartening.
Fortunately, as an international debt collection specialist Collection Company can assist you in collecting your outstanding claims in China. For our debt collection services we work with official Chinese law firms and bailiff offices. They are well-versed in the applicable laws and regulations and know their way around the Chinese legal system. This way, we can collect your outstanding debts in China for you.
- Nationwide coverage in China
- One dedicated English speaking contact
- Proven track record
- Tailor-made services for each case
- Expert advice and a transparent process
- 24/7 online access
Specialized in collecting debts in China
Do you do business in China and your customer isn’t paying the invoice? Are you still owed wages by a Chinese employer? Or do you have a damage claim in China? When collecting debts in China, you will encounter unfamiliar traditions and customs. Moreover, most creditors face a significant language barrier.
That’s why our international debt collectors are ready to assist you. They have an extensive network of Chinese lawyers and bailiffs. Together, they ensure that your outstanding claim is collected as quickly and efficiently as possible. If an amicable solution isn’t possible, our lawyers in China are prepared to start legal proceedings for you.
Would you like an estimate of the success rate of your claim? Request a free and non-binding consultation.
Why Collection Company for your debt collection in China?
- Global coverage
- One dedicated English speaking contact
- Experienced debt collection specialists with knowledge of Chinese legislation
- Extensive network with Chinese specialists (international lawyers and bailiffs)
- Seamless connection from extrajudicial to judicial action
- Effective local approach
- 24/7 tracking through your own Online Cockpit
Submit your claim now?
Do you have outstanding claims in China? Enter your details, and one of our debt collection specialists will contact you as soon as possible to discuss your claim.
How does debt collection work in China?
Just like in most countries, debt collection in China can roughly be divided into an extrajudicial (also called amicable or out-of-court) phase and a judicial phase. Because the amicable phase is usually the fastest and most efficient, we initially try to collect your claim without court intervention against your Chinese debtors. If that doesn’t work, we won’t hesitate to engage the local lawyers and attorneys we work with to initiate legal proceedings, using the Chinese court system. Below, we explain what both the extrajudicial and judicial phases of the debt collection case look like in China.
- Upload your invoice online
- We'll start your case
- We'll start with the debt collection process
- Together we decide the best strategy for collecting your debts
- Monitor the status of your case 24/7
- Any questions? Your personal accountmanager will answer them all!
- Your invoice is payed
Out-of-Court debt collection in China
During an out-of-court debt collection process, we contact your debtor. We send payment reminders and demand letters. However, experience shows that calling and emailing your debtor in China is more effective. So, we also do this. Over a period of three weeks, we contact your debtor 16 times.
We gradually increase the pressure. Finally, we warn your debtor that we will take legal action if the bill is not paid by the date mentioned in the warning, and that debt collection and legal costs will be charged to your debtor. In many cases, these efforts are sufficient to get your bill paid.
Legal procedures in China
Is it not possible to collect your invoice in the amicable phase? Then we will proceed to one of the local courts in China to recover your money. How the judicial procedure unfolds depends, among other things, on whether your debtor disputes the legitimacy of the claim.
For an undisputed claim, it is possible to initiate a so-called pre-court procedure (PRC civil procedure no. 189). In this case, the Primary People’s Court (基层人民法院) can issue a payment order. Your debtor then has 15 days to file an objection; otherwise, the payment order becomes enforceable.
If your debtor does dispute the claim, a regular judicial procedure will follow. We will need to file a case with the same court, providing an extensive complaint, your business license, contracts, delivery receipts, invoices, and all correspondence related to the case.
The court will examine this evidence. The judge will also attempt to persuade both parties to reach a settlement. If that fails, the judge will render a verdict. The judge can order the losing party to pay the debt and possibly damages.
How long does a legal procedure take?
Chinese law stipulates that the court must issue a first-instance judgment within 6 months of accepting the case. Subsequently, one can file an appeal. According to Chinese law, a judgment on the appeal must be made within 3 months after the acceptance of the appeal.
In practice, however, courts have the freedom to take longer for complex cases. Lawsuits involving foreign parties are considered complex cases and therefore typically take more time. It is not uncommon for a judicial collection in China to take two years or longer.
How much does a legal procedure cost?
The cost of initiating legal proceedings depends on the amount of the claim. The highest percentage is 2.5% (for claims under 100,000 CNY) and the lowest percentage is 0.5% (for claims over 20 million CNY).
The losing party may be ordered to pay the litigation costs, debt collection costs, and legal assistance fees. In China, it is permissible for lawyers and attorneys not to receive a fixed fee, but instead a percentage of the amount eventually awarded to the creditor.
Statute of Limitations
In China, claims must be brought before the court within a certain period of time, or they become invalid. For commercial claims, for example, a case must be filed within two years after the debtor is notified of default. For international delivery of goods, however, there is a four-year statute of limitations. For claims against government agencies, the limitation period is only three months.
Interim measures
In China it is possible to take certain precautionary measures to prevent money or goods from being siphoned off during the legal proceedings. For example, a prejudgment attachment can be placed on bank accounts, real estate, stocks, and business inventories. The judge can also determine that the parties are not allowed to enter into new agreements.
To place a prejudgment attachment, a request must be filed with the local court. The creditor must justify why it is strictly necessary to impose this preventive attachment. The judge will weigh the risk against the potential damage the attachment may cause to, for example, the debtor’s business operations.
Enforcement procedures in China
Once the judge has upheld your claim, your debtor must pay the outstanding amount and any legal costs. In practice, this does not always happen immediately.
In that case, we must file a request for the execution of the judgment with the Primary People’s Court. This court can then freeze the delinquent party’s bank account. The account will remain frozen until the entire debt is paid.
Bankruptcy in China
If your debtor cannot meet their payment obligations, it is possible to request the bankruptcy of your debtor. This is a powerful leverage; to avoid bankruptcy, most debtors pay the outstanding debt immediately.
To start an insolvency procedure, we must file a bankruptcy petition with the court. If the court honors the bankruptcy petition, all creditors must submit their claims within a period announced by the court (up to 3 months).
All claims against the debtor are then temporarily suspended until a trustee is appointed. The trustee takes control of the business and tries to pay the various creditors from the bankrupt estate.
During the settlement of the bankruptcy, certain creditors are given priority over others. For instance, debts incurred during the bankruptcy procedure are paid first. Then, employees are paid, and employee-related taxes are remitted. Unsecured loans are repaid last.
Furthermore, most debtors pay the outstanding claim immediately when a bankruptcy petition is filed. In that case, we can stop the procedure.
Advice about your case?
Starting an amicable collection? Initiating legal proceedings in China? Or filing for the bankruptcy of your Chinese debtor? Our lawyers, May Leung (manager of the legal department) and Joeyin Tang (lawyer specialized in bankruptcy procedures), speak the language and are well-versed in local customs. They are happy to assist and advise you regarding your claim.
Legal fields of debt collection in China
At Collection Company, we assist creditors with various types of claims across borders. These often involve business clients who do not pay, but can also include rental disputes, payment conflicts with employers, rental or purchase disputes, or damage claims.
We can help you if you are dealing with non-payment in the following legal areas:
- Construction law
- Rental and leasing
- Purchase and sale
- Labor law
- Agency agreements
- Transport
- Damages and unlawful conduct
We work both directly for clients and for intermediaries (such as law and accounting firms).
Other professional services in China
- Reliable advice on contracts and terms
- Credit information about companies in China
- Disputes including issues like Retention of Title and Right of Recourse
Submit your claim in China
You can submit your claim directly to us via our debt collection registration form. Would you like to consult with one of our legal professionals first? Leave your details or call us at +31 70 – 762 0330.
Free advice on debt collection in China
Submit your personal information and plan your free consult.
FAQ: Frequently Asked Questions about Collection in China
FAQ: What do we need for a debt collection in China?
For a debt collection in China, we need some documents from you. Although we prefer to receive as much information as possible, we understand that the file is not always complete. That’s not a problem. We are happy to review with you which documents and evidence are available.
Documents we would like to receive from you include:
- A copy of the agreements made, such as a purchase agreement, but also email correspondence with your debtor, a fax confirmation, or a summary of what was agreed upon
- Copies of sent invoices
- Copies of sent reminders
- Your general terms and conditions that apply to the agreement
- Proof of delivery
FAQ: Is there a retention of title in China?
According to Chinese law, ownership of goods transfers to the buyer at the time of delivery. However, it is possible to include a limited retention of title in the purchase agreement. In this case, the buyer becomes the owner only once the full purchase amount has been paid.
In China, retention of title is generally used in cases of non-payment and not during bankruptcy proceedings. There is no comprehensive retention of title in China, for instance, for products that have already been incorporated into new products or have been resold.
FAQ: Why not hire a debt collection agency in China?
Collection Company works with the best lawyers, legal experts, and bailiffs in China. As a creditor, you have one dedicated English-speaking point of contact. This debt collection specialist maintains contact with the local collection experts, so you don’t have to worry about it yourself. Our specialists also handle all necessary paperwork and any translations. Unlike most local debt collection agencies we can handle the complete debt collection procedure, including the out-of-court phase, judicial proceedings and enforcement.
FAQ: Is an attorney required?
In China, it is not mandatory to have legal representation, but in some cases, it is advisable. The Chinese legal system is quite complex, making it important that your interests are represented by someone specialized in Chinese law. Therefore, Collection Company works with the best lawyers in China.
Why 40.000 customers tried our services
- The #1 collection company in the Netherlands and abroad
- Regional & local specialists
- Years of experience with international invoices
- Your own personal contact
- Extensive advice on the legal process
- Monitor the status of your case 24/7
Meet our specialized legal team
Joost Konings LLMLaw expert- May Leung LLMLaw expert
- Wesley Boeters LLMInterim lawyer
