Debt collection is the practice of following through with unpaid debts or invoices from individuals or other businesses. Many companies in the Cayman Islands, when faced with a situation that implies this process, will usually request the services offered by a specialized agency. The goal is to collect the amount following an amicable procedure that will involve negotiation and a schedule for the payment. When this is not possible, the company that wishes to recover the debt can take the case to court.
Our team of Cayman Islands incorporation specialists can provide complete debt collection services. We offer a positive approach and handle each case with the due diligence it requires. The aim, whenever possible, is to settle the debt during a pre-legal phase, outside of court. This is the optimal solution for both of the parties involved and, in most situations, it will imply the fewer costs.
In this article, we answer some important questions about debt collection in the Cayman Islands. However, investors who are starting their business or who are interested in setting up a Cayman Islands company can reach out to us if their questions fall outside the scope of the discussed debt issue.
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What are the stages of debt collection in the Cayman Islands?
The debt collection process usually has two stages:
- the amicable phase that consists of an initial negotiation and mediation.
- the legal phase that is based on collecting the debt by taking the case to court.
As previously states, it is preferable to succeed in collecting the debt during the initial stage.
What is the amicable debt collection process?
When you decide to request specialized debt collection services, one of Cayman Islands incorporation agents who specializes in debt collection can guide you through these first steps. The first amicable phase will typically include:
- the first collection action: this usually takes place within 24 hours of receiving the case and it includes a formal notice sent to the debtor.
- the meeting: the aim will be to schedule a meeting with the debtor during which the parties will be able to negotiate the payment plan.
- the payment schedule: this is a tactic that aims to allow the debtor to be able to make the payment in installments.
- subsequent steps: when the debt is not 100% recovered, the creditor can resume the steps for a second time.
The debtor’s financial situation will be taken into account during the amicable debt collection phase. Because this is a process that will allow the debtor to pay in installments, the creditor will need to be prepared to receive his payment in this manner.
What is the legal debt collection phase?
Investors who are interested in Cayman Islands company formation should also know that, in some cases, the debt can only be recovered after a formal complaint is lodged with a Cayman Islands court. When the amicable debt collection process is inefficient, the case can be taken to a specialty court via enforcement of judgments. When the creditor has a judgment issued in his favor, he can then enforce the payment and the debtor will need to comply with the seizure of assets.
Debt collection for investors interested in Cayman Islands incorporation
Working with reliable business partners and clients is the goal of any company, however, in some cases, despite the best efforts of all the involved parties, debts may accumulate. When this happens, it is advisable to reach out to a team of specialists, like those from our team, who are experienced in handling the debt collection process throughout all of its phases. We recommend requesting specialized aid even more so when an initial attempt was made to notify the debtor of his undue payment and the approach was left unanswered. From this point on, a team of experts can handle the process and commence the pre-trial phase and the negotiation.
The Cayman Islands are a popular destination for offshore company formation, particularly for establishing investment vehicles such as funds and trusts. Below, we present a statistic issued by the Cayman Islands Monetary Authority for the number of funds in 2017. The total number of mutual funds at the end of 2017 was 10,559, out of which:
-7,331 registered funds;
-2,816 master funds;
-331 administered funds;
-81 licensed funds;
-6.936 trillion USD in total assets.
Our Cayman Islands company formation specialists can be your trusted partners for company formation matters as well as a company or business-related issues, such as debt collection. Please do not hesitate to contact us if you have any questions about our services.