Protecting Business Interests in Court: Debt Collection from Counterparties

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Симиренко Ганна

Lawyer

Ukraine / Kyiv

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Publication date: 28.07.2024

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Protecting Business Interests in Court: Debt Collection from Counterparties

Introduction

Protecting business interests often requires the use of legal tools, particularly legal action for debt collection from counterparties. Timely resolution of debt issues is key to maintaining the financial stability and development of a company. This article discusses the main aspects of the debt collection process through the court, including the preparation of a claim, court practice, and executive proceedings on debt collection.

Claim to the Commercial Court for Debt Collection

The first step in the debt collection process is to prepare and file a claim to the commercial court for debt collection. The claim should include all necessary evidence confirming the existence of the debt, as well as the grounds for its collection. It is important to clearly state the amount of the debt, the date it arose, and the terms of the contract under which the debt originated.

Claim for Debt Collection by Receipt

If the debt arose on the basis of a receipt, the claim for debt collection by receipt should also include a copy of the receipt signed by the debtor.

A claim for debt collection by receipt is an important document used to restore the violated rights of the creditor in a situation where the debtor fails to fulfill their obligations to repay the loan. Such a claim is filed with the court to enforce the debt on the basis of the receipt, which is a document confirming the fact of the provision and receipt of funds. Court practice shows that the receipt is an important piece of evidence in debt collection cases, especially when no written contract has been concluded between the parties. It is important to strictly adhere to the formal requirements for the preparation and submission of the claim so that the court accepts it for consideration.

Structure of the Claim:

Introductory Part:

1. Name of the Court: The name of the court to which the claim is filed.
2. Information about the Plaintiff: Full name, address, contact details (phone, email).
3. Information about the Defendant: Full name, address of residence or registration, contact details.

Description of the Circumstances of the Case:

1. Date and Circumstances of the Receipt: Specify the date when the receipt was drawn up and the circumstances under which it happened (e.g., personal or business relations between the parties).
2. Loan Amount: Clearly indicate the amount that was transferred to the debtor.
3. Repayment Terms: If the receipt specifies repayment terms, they should also be indicated.
4. Non-fulfillment of Obligations: Describe how and when the debtor violated the terms of the receipt by not repaying the debt within the specified period.

Evidence Base:

1. Copy of the Receipt: Attach a copy of the receipt signed by the debtor. This is a key document confirming the existence of the debt.
2. Other Evidence: If available, add other documents or testimonies confirming the fact of the transfer of funds and the debtor's obligation to return them.

Plaintiff's Claims:

1. Main Claim: The claim for the recovery of the amount of debt specified in the receipt from the defendant.
2. Interest and Penalties: If the receipt provides for the accrual of interest or penalties for delay, these claims should also be specified.
3. Court Costs: The plaintiff may demand reimbursement of court costs incurred in connection with the filing of the claim.

Concluding Part:

1. Plaintiff's Signature: The claim must be signed by the plaintiff or their representative.
2. Date of Submission: Specify the date when the claim was filed with the court.

Practical Advice:

1. Legal Assistance: It is recommended to seek the help of a qualified lawyer to prepare the claim, which will increase the chances of a positive outcome.

Notarial Certification: If the receipt was not notarized, this may complicate the process of proving the fact of the transfer of funds. In such a case, additional testimonies may be useful.Debt Collection for Utility Services

Separately, it is worth considering the issue of debt collection for utility services. In cases where there is no written contract, debt collection for utility services without a contract is possible if there is evidence of the actual provision of services and their use by the debtor. In such a case, the utility debt collection lawsuit should include all evidence of the provision of services.

Executive Proceedings on Debt Collection

After obtaining a decision to the court on credit debt collection, the next stage is executive proceedings on debt collection. Executive proceedings for debt collection involve contacting the enforcement service for the compulsory execution of the court decision. The procedure for debt collection by the executive service includes several important stages.

First, the enforcement service seizes the debtor's property, which may include both movable and immovable property. This property can be sold at auction to pay off the debt. Next, restrictions are imposed on the debtor's bank accounts, allowing the necessary amount to be deducted directly from the accounts. In some cases, additional measures may be applied, such as restricting the right to travel abroad, restricting the use of vehicles, and other measures provided by law.

The main goal of executive proceedings is to ensure the full fulfillment by the debtor of their financial obligations to the creditor. This is an important stage in the process of protecting the creditor's rights, as it allows the debt to be forcibly recovered in case the debtor fails to fulfill their obligations voluntarily.

Forced Collection of Debt by the Executive Service

Forced collection of debt by the executive service is the final stage in the debt collection process. The executive service has the right to apply various methods to ensure the execution of the court decision, including forced debt collection under a credit agreement or other types of debt. This may include the sale of seized property at auctions, deduction of funds from the debtor's accounts, and other measures.

How to Record Debt Collection Through the Court

After obtaining a court decision and actual debt collection, it is important to correctly reflect this operation in the accounting records. Debt collection through the court is reflected in accounting as a decrease in accounts receivable and a corresponding increase in cash or other property received from the debtor.