Our collection is done by Mexican attorneys and fully-trained pre-legal collectors who are knowledgeable about Mexican law, best known local collection strategies, and the HMH Legal unique collection process. Our business is credit & collections, and all of our staff is singularly selected for their demonstrated skills in this field.
Initial skip tracing process
In an effort to better prepare ourselves on each collection attempt, we do an initial skip tracing process to make sure that our debtor information is complete, accurate, and up to date, regardless of the information provided by our clients. We have to make sure that we are contacting the appropriate person within the debtor company (the decision maker), and that we know his full story (financially, economically, and legally, including finding out about their assets, locations, related companies, lawsuits, etc.).
Whenever possible and where the debtor's jurisdiction will not result in additional cost for the client, we will conduct a full search and investigation on special Mexican electronic databases (private and public), chambers of commerce, public registry, debtor's address and vendors, Internet, etc. When there is additional cost involved we will inform our clients and let them decide the extent of our investigation.
Collection strategy and process
- Our collection process is always first pursued out of court, in the following steps:
- We do an immediate personal visit when this is possible (either when the debtor is within our main location or a city where we have a local attorney), and we try to collect fully in amicably fashion, or at least get a written payment plan, a formal acknowledgment of debt, or a promissory note. After that visit and a conversation with the debtor we will be able to determine if suit will be necessary and worthwhile, and we will also determine the merits and urgency of any legal action.
- Despite preparing ourselves for litigation during this initial visit, we will make our best effort to resolve all disputes amicably, persuading the debtor to pay voluntarily in full or to make a settlement offer with a serious payment plan. These attempts will be supported by a series of demand letters. After these attempts are exhausted we will know if it is time to move on. Our objective is to try to get our clients the most cost-effective solution within a reasonable time period. That is definitely out of court. This process comprehends the first stage of collection. (This stage is sometime skipped at our client’s request, when he demands to immediately proceed with legal action.)
- If no recovery or formal settlement is reached during the first stage of collection, we will assess the possibility of collecting through litigation, based on the debtor's conditions observed during our general investigation and personal visit (while trying to find and confirming assets available, current company name and address, related lawsuits, etc.), and we will make our recommendations for suit. It is not our intention to have our clients investing in any legal action only to secure a worthless judgment.The strategy followed in litigation and all related costs are assessed on a case by case basis, depending on the nature of the transaction and the available supporting documents for each claim. (Please see our section on FAQ’s related to debt collection and litigation, or read our detailed article "Assessing and Reinforcing Litigation in Mexico").
- Generally, we give our first stage of collection from one to three weeks to reach a collection or a reasonable settlement agreement, depending on the response we get from the debtor and depending on his situation. This timing will also depend on the promptness of each response from our clients. All proposals from debtors are informed to our clients immediately and it is our clients, not us, who make the decisions for a settlement agreement.
- In litigation, timing will depend on several factors including our litigation strategy, the current situation of the debtor (if debtor is operating under the same corporate name or under a different company, has changed address during litigation, etc.), debtors’ defenses (problems within your transaction, weak counsel, weak defense), etc.
It is recognized by most lawyers in Mexico that most of these proceedings for recovery of debt (called juicios mercantiles) will last anywhere from one to three years, without adding any appeal process. Nonetheless, many collections are done immediately following suit when a debtor notices that the creditor is keeping his word in pursuing legal action and applying all means necessary to collect, or when an attachment or garnishment order is issued against the debtor for seizing its assets.