Exporting to the United States – A Team Canada Inc Publication

5.6 Dealing with non-payment

If you've delivered your goods to your U.S. customer but he hasn't paid you, what recourse do you have?

You can hire a lawyer or a collection agency, but it can still be very difficult for a Canadian exporter to recover payment from recalcitrant U.S. customers, especially if the customers have sought bankruptcy protection. Legal action can be exceedingly costly, so arbitration or mediation to settle out of court is much preferable, if you can arrange it. This, of course, presupposes that you wrote an arbitration/mediation clause into the contract with your buyer. If you didn't, your best course is to obtain legal advice and consider whether it's even worthwhile to pursue payment.

Hiring a licensed collection agency can also help to encourage payment. Although cheaper than hiring a lawyer, this is still expensive because collection agents usually take a percentage of the receivable as payment.