Quite often we hear from a client that it is easier for him to admit a debt as hopeless than to sue for years. This mainly happens when the amount of debt is small, usually up to 100 thousand UAH. In such cases, so that the client does not really waste time and money, we recommend collecting the debt through a court order.
This procedure is quite fast and much cheaper than filing a lawsuit. However, few people know and use it, and in vain.
Therefore, in this article we decided to talk about the peculiarities of debt collection in the order of injunctive proceedings, as well as the pros and cons of this procedure.
We pay attention, that this article is devoted to the requirements under which a court order can be obtained in the order commercial litigation.
- The essence of the procedure
In order to obtain a court order, you prepare a statement to the court, which is very similar in content to a lawsuit. The similarity is that in this statement you have to indicate the reasons for the debt, justify its size and your right to receive funds.
In the application for a court order, you describe the facts, provide evidence of the amount of the debt and apply to the court. It does not even need to be sent to the debtor.
If all is well with your documents and the court has no doubts about the declared debt, the court issues an order, which sends to the debtor. The court hearing is not held. After that, you need to wait until the order comes into force, if the debtor does not declare its cancellation (this will be discussed below), get the order and contact the executor, who will collect the debt.
You can use this procedure only if:
- Sum requirements does not exceed 100 subsistence levels for able-bodied people (as of January 1, 2021 it is UAH 227,000).
- Your claims arose on the basis of written agreement.
- There is no dispute about the debt. If everything is clear with the previous paragraphs, then this point should be stopped.
Enforcement proceedings exist to simplify the procedure for recovering a debt for a person to whom such a right belongs. If there is a dispute, then here in the lawsuit the court must decide whether you have the right to receive funds or not.
Simply put, the debtor must admit that he owes you money. How to confirm this? First of all, you need to provide primary documents: the contract itself, signed by the debtor expense invoices, payment orders (bank statements), acts of services provided, and so on. It is also desirable to have a letter of guarantee from the debtor, in which he acknowledges the debt and promises to pay it within a certain period.
Collectors often attach a signed reconciliation statement, which records the amount of debt. However, the case law is ambiguous in this regard. Most judges claim that the reconciliation statement is only an accounting document and does not indicate the indisputability of the debt. If you still attach the act of reconciliation, it can be taken into account by the court only if the information reflected in the act is confirmed by the primary documents, which we mentioned above.
The court must consider the application within 5 days from the date of its receipt.
Only UAH 227 of court fee is required for filing an application, regardless of the amount of the debt.
Easier than a lawsuit.
Requirements for the application are provided in Art. 150 of the Code of Civil Procedure of Ukraine and are reduced only to the indication of the applicant's claims, the circumstances on which they are based and the list of evidence.
Simplified cancellation procedure.
If the debtor submits an application for cancellation of the order, the court does not find out whether the debtor's objections are justified, but immediately cancels the order. This is due to the specifics of this procedure, as it exists to simplify the recovery of debt by those debt collectors who undoubtedly have the right to claim. As mentioned above, if there is a dispute, it should be resolved only in litigation. Therefore, if the debtor applies for revocation of the order, the court immediately revokes the order. The debtor has 15 days from the date of service of the order to file such an application.
The order of entry into force of the order.
The legislation stipulates that the order enters into force 5 days after the expiration of the term for the debtor to submit an application for its cancellation. The debtor may file such an application only if he has received an order. If the debtor evades receiving the order or is simply not at the address of the location, legally the order cannot take legal effect.
The practice of courts in this situation is quite ambiguous. Some courts, after returning the order with the mark "not served", still issue an order to the claimant for execution, and some courts refuse and only explain to the claimant the right to go to court in a lawsuit.
Conclusions. A court order is indeed a convenient mechanism for protecting the undisputed claims of enterprises, especially when the amount of debt is small. You will be able to save time and money, as well as understand the position of the debtor and use it in litigation. If you are denied, you can always apply again or in litigation.
If you have doubts about the indisputability of your claims, we are always ready to analyze the primary documents and determine the prospects of applying for injunctive relief or prepare a statement.