North America

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The ultimate guide to debt collection in North America

Do you want to ensure that all of your debts are collected promptly and efficiently?

If so, you've come to the right place. In this ultimate guide to debt collection in North America, you will find everything from tips on effectively communicating with customers about unpaid invoices to best practices for collection agencies. Whether your business is big or small, mastering these methods can help reduce the time and money spent dealing with those pesky delinquent payers.

At Debitura, we make sure that you get paid on time by customers from all over North America. Our platform works with some of the top-tier debt collection lawyers and agencies in all 23 countries across North America, so you never miss a payment again!

By partnering with Debitura, you gain the convenience of a single point of entry while benefitting from local experts that possess an unparalleled comprehension of their respective markets.

‍Now that you know about our services let’s explore how debt collection works in North America.

The economic situation in North America 

North America is the world's third-largest continent and fourth most populous. Located in the northern hemisphere, it is bordered by the Arctic Ocean to the north, the Atlantic Ocean to the east, and the Pacific Ocean to the west and south. It has two giant countries - Canada and United States - and several smaller countries.

The economy of North America is one of the most powerful and advanced in the world. It is fueled by various factors, including rich natural resources, a highly educated and skilled labour force, strong government institutions, innovative businesses, dedicated entrepreneurs, and forward-thinking policymakers.

The United States is the largest economy in North America, with a GDP of more than $20 trillion USD. Canada follows with a GDP of approximately $1.7 trillion USD, making it the second-largest economy in North America and the tenth-largest economy globally. Mexico is the third-largest economy in North America at around $1.2 trillion USD.

The economies of North America are closely intertwined, with goods and services exchanged across borders through trade agreements such as NAFTA (North American Free Trade Agreement). The U.S., Canada, and Mexico all belong to the G-20 major economies, a group of countries that account for over 80% of global economic output.

The North American economy is diverse, emphasising high-tech manufacturing and services such as finance, technology, and health care. The region also has a strong agricultural sector and is a significant oil, gas, and mineral exporter. Additionally, the tourism industry is an essential contributor to economic growth in the region.

North America is one of the most developed regions in the world, and its economy plays a significant role in global economic activity. Its strong financial and institutional foundations, with favourable policies and innovative businesses, have enabled it to become a economic development and growth powerhouse.

By exporting goods and services around the globe, North America is helping to drive the world economy and create jobs for people in all corners of the world. With its dynamic economies, North America is well-positioned to continue leading global economic growth.

The challenge with late payments in North America

Late payments have been a long-standing challenge in North America, causing economic hardship for countless businesses and individuals.

It's pretty typical to sell goods and services on credit in North America - particularly B2B invoices, where most industries make more than half their sales through this method. Offering customers credit comes with many advantages for businesses: not only does it increase sales from existing clients, but it also allows them to win new ones and remain competitive in their market.

The downside of offering credit to customers can be late payments and the associated credit risk.

When selling on credit, the average payment term (average days) set for B2B customers varies from 36 days in Canada to 52 days in Mexico.

Over the last 12 months, more than 50% of North American businesses have been forced to accept longer payment terms, and only 10% have been able to shorten their payment terms.

The challenge with offering credit is that late payment of invoices has become a real problem for businesses in North America. The latest figures show that about 50% of all B2B invoices are paid late in Mexico, 47% in the US, and 43% in Canada.

The average payment delay in the US is 23 days; in Canada, it is 25 days; in Mexico, it is 23 days.‍

The other negative effect of late payments is that many of these invoices are written off as bad debt. Between 5% (Canada) and 7% (Mexico) of all invoices are written off, costing businesses their profits.

When businesses don't get paid, they have less money to use. This often causes them to go bankrupt and lose their business. This significantly impacts the economy and the people who work there and lose their jobs.

It's estimated that businesses in North America are owed an incredible $4.3 trillion in overdue payments, resulting in over $90 billion lost per year due to late payments alone.

The implications of this figure are clear: it's crucially important for businesses to ensure their invoices are paid on time, which is why debt collection is such an integral part of doing business.‍

Debt collection becomes a lot easier when you have the right tools and knowledge at your disposal. Here are some tips to help you get started:

  • Establish clear payment terms upfront with customers — ensure both parties understand the payment terms and have them documented.
  • Send regular invoices, and reminders — regular and friendly reminders can help keep customers on track with their payments.
  • Stay in contact with customers regarding overdue payments — ensuring you remain in communication with customers about overdue payments will help ensure timely resolution.

The regulatory framework for debt collection in North America

North America consists of 23 individual countries, with individual laws regulating how you can collect a debt. 

O‍n this page, you will find links to country-specific guidelines for all 23 countries based on local regulation.

As the regulation is country-specific, we will keep this guide quite a high level.

It is worth mentioning that in the US, the DFCPA provides some debt collection guidelines on a federal level, but most regulation is made in each of the 50 member states. State law is often similar to the federal Fair Debt Collection Practices Act (FDCPA). However, some states cover the original creditor while others do not. Furthermore, each state has Unfair and Deceptive Acts and Practices laws that may be applicable in certain situations. 

Debt collectors are not legally allowed to utilise any unfair, deceptive or intimidating techniques when attempting to collect payments from you, according to the Fair Debt Collection Practices Act (FDCPA).

The FDCPA covers the collection of:

  • Mortgages
  • Credit cards
  • Medical debts
  • Other debts are typically incurred for personal and familial needs.

Contrary to popular belief, the FDCPA does not apply to business debts nor the initial collection of debt by a creditor.

Some of the key restrictions regulated by the FDCPA include the following:

  • Time and place: Debt collectors are restricted from contacting debtors before 8 a.m., after 9 p.m., or at any place and time that is inconvenient for the debtor, including the workplace.
  • Harassment: Debt collectors must not threaten or harass debtors or anyone else in any way over the phone, online, or through other forms of communication.
  • Representation by an attorney:  If a debt collector knows that the debtor has an attorney, the debt collector must contact the attorney instead of the debtor.
  • Misrepresentation: Debt collectors are prohibited from falsely representing themselves as attorneys, government representatives or credit reporting agencies.
  • False statements: Debt collectors must not make false statements or provide false information when attempting to collect a debt.
  • Unfair practices: Debt collectors cannot use unfair practices such as depositing post-dated checks

The debt collection process in North America

Each country has a different process for collecting debt. The image below explains our standard process for collecting debt in North America:

Debt collection process North America
Debt collection process North America

1 Upload your claim

If you want someone else to help you with your debt, you will start by finding a company that collects debts. You will give them some information about your case, and they will help you get your money back. If you use Debitura, we will give you 3 quotes from local partners in the North American country where your case is located. This service is free and risk-free.

2 Amicable collection

Debitura offers a no-cure-no-pay solution for amicable collection, meaning you only pay us if we recover your debt. To accomplish this, our team launches a "campaign" of gentle reminders to the debtor by email, SMS message and letter while also utilising all other available communication channels in that specific country. With Debitura's help, your goal is to receive payment or have them acknowledge the debt and establish an instalment plan—all with absolutely zero risk!

3 Evaluation:

Have you yet to receive payment from the debtor following attempts at a friendly resolution? If so, it may be prudent to evaluate your next course of action. We will assess certain factors, such as the size of your claim and the likelihood of payment, to determine which decision is best for you. Generally speaking, three options are available:

A Surveillance:

If your claim is under 2.000-5000 USD, further legal action may not be a worthwhile investment. As an alternative, we suggest debt surveillance as a solution - our team will continue attempting to contact and negotiate with your debtor to reach a mutually beneficial settlement.

B: Legal collections:

For larger claims, the commencement of a legal process is strongly encouraged. The precise approach varies depending on your location and the size of the claim. At Debitura, we have partnered with debt collection attorneys across North America who can provide you with tailored advice and an accurate quotation for your individual case.

C: Debt enforcement:

If you have an admission of debt or court order, the bailiff's court offers a viable option to enforce your claim.


Despite the challenges, businesses can receive payment on their past-due invoices in North America. Understanding the regulatory framework and working with a knowledgeable debt collection agency will increase your chances of success.

We are here to help you select the right debt-collection partner for your business. We have a network of local partners who can assist you with collecting your receivables in all 23 North American countries.

Get started today by contacting us for3 free quotes from local providers.

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