With more than 530 million consumers, North America remains a strategic hub for international trade and global exports. While the region offers significant business opportunities, commercial practices and payment cultures differ considerably between countries. Discover expert insights on how to adapt your debt collection strategy to each market and improve recovery rates on outstanding invoices.
One Integrated Economic Region, Three Distinct Debt Collection Strategies
The United States, Canada, and Mexico together represent a market of more than 530 million consumers, supported by one of the world's most dynamic economic regions and strong cross-border trade flows. However, payment practices vary widely, and each country operates under a distinct debt collection framework.
As a result, a standardized approach to debt recovery is rarely effective. Understanding the unique characteristics of each market can help businesses:
- increase debt recovery success rates;
- shorten payment collection timelines;
- strengthen and preserve long-term business relationships.
This is particularly important in North America, where 60% of debt collection cases involve balances below €20,000 and where late payments often stem from very different underlying causes.
United States: Supporting Documentation Often Matters More Than the Debt Itself
The challenges
As the world's largest economy and a key trading partner for businesses across the globe, the United States offers substantial opportunities in sectors ranging from manufacturing and services to technology and healthcare. However, client risk has increased significantly in recent years.
Business insolvencies rose by approximately 76% between 2022 and 2025, while debt collection remains subject to a highly complex legal environment that can differ considerably from one state to another.
Pitfalls to avoid
A recognized debt does not automatically result in payment. Debtors frequently request additional documentation, dispute invoice details, or enter negotiations to delay settlement. Creditors must therefore remain proactive throughout the collection process.
Purchase Orders, Demand Letters, Personal Guarantees, and Promissory Notes are commonly requested during debt recovery proceedings. US debtors often seek clarification on contractual terms, challenge individual invoice items, or allege partial non-compliance. In many cases, these tactics are designed not to deny the debt but to gain leverage over payment terms and timelines.
The strategy to adopt
One of the most common mistakes is treating a dispute as a routine administrative matter. Every delay in responding allows the debtor to maintain control of the conversation.
By contrast, a fast, well-supported response that includes complete documentation can quickly shift the negotiation back in the creditor's favour.
The real challenge is therefore to understand the debtor’s strategy: are they genuinely disputing the debt, or merely trying to buy time?
The success of the debt collection process hinges on this analysis. The more thoroughly documented the case, the sooner it is possible to regain control of the negotiation,
says Zach Spencer, Head of Debt Collection, Coface North America.
Canada: Navigating Multiple Legal Frameworks and Documentary Requirements
The challenges
Canada is one of the world's most stable economies and among the most open to international commerce. Its secure legal framework, transparent business practices, and trade agreements with major economic blocs such as the European Union make it an attractive destination for companies expanding internationally. Nevertheless, payment default risk remains a concern.
Businesses continue to face tighter financing conditions and ongoing pressure on liquidity. Insolvency levels therefore remain above pre-crisis averages, reaching 7.37 insolvencies per 10,000 businesses in 2025 after peaking at 9.85 in 2024.
Pitfalls to avoid
For creditors, the primary challenge is often not the debtor's willingness to pay, but understanding Canada's unique legal environment. The country operates under two distinct legal systems:
- Common Law across the English-speaking provinces;
- the Civil Code of Québec, which is closely based on French civil law.
This legal duality directly influences contract drafting, debt recovery procedures, and the resolution of commercial disputes.
The strategy to adopt
In Canada, communication with debtors is generally constructive and transparent. Negotiated settlements are typically preferred, while litigation is reserved for situations where amicable solutions fail. Strong business relationships can facilitate discussions, but they should never replace legal certainty.
A properly documented case file and a solid understanding of the applicable legal framework remain essential for successful debt recovery.
Mexico: The Critical Importance of Locating the Debtor Early
The challenges
Mexico is a strategic trading partner for advanced economies operating throughout North America. Growth in nearshoring initiatives, foreign direct investment, and integration into regional supply chains continues to drive economic activity. However, economic conditions remain challenging. Following GDP growth of 1.7% in 2024 and 1.5% in 2025, inflation continues to impact borrowing costs and put pressure on the cash flow of local businesses.
Pitfalls to avoid
Unlike companies in the United States and Canada, Mexican debtors rarely dispute the validity of a debt as a negotiation tactic. Instead, creditors face a different challenge. Financial pressure is often more severe, debtors can become unreachable very quickly, and legal proceedings tend to be lengthy, expensive, and highly procedural. In the most complex cases, court actions can take up to 15 years to conclude.
The strategy to adopt
The principal risk is that debtors gradually disappear from view by changing address, stopping communication, or becoming difficult to locate. Successful debt collection therefore relies heavily on identifying the debtor quickly, opening a dialogue, and securing an amicable settlement before legal action becomes necessary.
The real challenge is to maintain regular contact and take action before the business becomes difficult to locate.
The sooner contact is established, the greater the chances of reaching an amicable solution,
says Lorena Cervantes, Head of Debt Collection, Coface Mexico.
Expanding your business internationally? Make sure you understand the local debt collection landscape before unpaid invoices start affecting your cash flow:
Download our white paper to gain expert insights into payment delays, local debt recovery procedures, legal risks, and country-specific best practices.
Contact your local expert to discover tailored debt collection solutions, navigate regional legal requirements, and adapt your credit management strategy to each North American market.
