Debt Collection in China - Best Practices

Date of event:

Debt collection is an unfortunate reality for most businesses. When customers are ultimately unable to pay for their purchases, the impact can be significant. For small businesses, especially, the failure to collect outstanding accounts receivable can have dire consequences.

 

Together with the German Centre Beijing and the AHK Greater China, WZR China has hosted a seminar on Debt Collection in China and their best practices. 

 

Thursday, October 26, 18:00-19:30h 

 

Location: German Centre, 11F, DRC Liangmaqiao Diplomatic Office Building

 

Key Note speakers:

 

 -  Mr. Dr. Florian Kessler

 

 -  Mr. Wei Guanpeng

 

 

 

 

 

 

 

Content of the Seminar: 

 

Non-performing assets lose value over time, which can be illustrated as "ice lolly effect", similar to how an ice lolly melts in the sun. The longer an account receivable is overdue, the lower outstanding payments in China based on case studies. In particular, the following topics will be highlighted:

 

1. Lawyer's Letter

 

In general, it makes sense for creditors to send a lawyer's letter before formally initiating legal proceedings. 

 

2.  Litigation vs. Arbitration

 

In some cases, arbitration can save a significant amount of time and cost compared to litigation in Chinese People's courts.

 

3. Fast-Track Process: Payment Order

 

The Payment Order is a legal order issued by the People's Court in accordance with the provisions of the Civil Procedure Law. It is not a formal lawsuit but a so-called special fast-track process, which can be compared to the “Mahnverfahren” in Germany. 

 

4. Measures for the Preservation of Property

 

To safeguard the enforcement of a judgment, the plaintiff can apply for litigation property preservation measures, even before the initiation of the litigation procedures. 

 

5. Debtor's Asset Situation

 

It is important to check the debtor’s asset situation in advance to determine the litigation strategy and especially to ensure that the judgment can actually be executed.

 

6. Typical Litigation Mistakes

 

The speakers will introduce the most frequent litigation mistakes: jurisdiction errors, limitation of statute and insufficient evidence.

 

To view more detailed information, please click here.