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International Creditor Collections pose interesting question of Jurisdiction

With International trade increasing exponentially, especially with China, there is an increase in the request for collections against US companies who haven’t paid. But if a creditor is strictly foreign, there is a dilema in filing a collection action in the creditors name directly. It is generally preferable to have the foreign creditor assign the debt to a US assignee for suit. This does not subject the foreign entity to US jurisdiction by filing and mitigates any cross claims. The assignee might be subject to the same defenses if the assignee took the paper with notice but won’t be at risk on any cross claims.

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