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Debt Collection
Engage a lawyer to collect debt
Engage a professional debt collector to collect debt
Set up your own in-house debt collection team
Engage a professional debt collector to collect debt
For information, it is illegal to operate a debt collection business
in China (law firms are exempted from the prohibition). Hence, in theory, your debt collection agreement
with a professional debt collector is void
under the law. However, the question is always how can I get my money back. Professional debt collectors
in China are definitely more effective than your lawyers. Sometimes, they work closely with different law
firms to collect debts. Because professional debt collectors and lawyers are not in direct competition,
it is easier for professional debt collectors to work with different law firms and different lawyers in
different cities. No matter what your lawyer tells you about his or her association with law firms in
other cities, there will always be a possibility that he or she wants to keep the business to himself
or herself. In China, a lawyer is qualified to practice in any province. If you have debts all over the
country, you may want to give some thought about hiring a professional debt collector.
There are two major risks engaging a professional debt collector:
1) If the professional debt collector commit a crime during the collection process (for example
injuring the debtor), the principal, i.e. you, may be implicated.
2) If the professional debt collector collects the debt and refuse to pay you back, you have no
recourse against them since your agreement is not protected by law.
As such, think carefully before engaging a professional debt collector and do your own investigation
on how honest is a professional debt collector. Again, we have to remind you that all professional debt
collectors (except law firms) are not legally licensed in China.