How to collect debt from the counterparty?

The sale of goods "on credit" is a common practice among entrepreneurs. The seller's goods do not have dust in the warehouse, and the buyer gets the opportunity to raise funds to pay for such goods. As a result, each party is satisfied and receives its profit. However, such an idyll can always be intervened by poor customer management, financial crisis, epidemic and so on. And instead of money, the seller receives numerous promises over the phone.

If you find yourself in this situation, you should be prepared for it. Therefore, we analyze the main steps towards debt collection from the debtor.

In general, the whole process should be divided into three stages:

Pre-trial.
Judicial.
Execution of a court decision.

Consider each of them in more detail.

Pre-trial stage

The first thing to do if the counterparty does not repay the debt - check and collect documents confirming the debt. Often at the stage of submitting documents to the court it turns out that the invoices are not signed or they indicate a smaller amount of goods that were actually taken by the buyer.

Make sure you have all the documents. If the contractor has not returned the invoice or deed - contact him. It is easier to collect documents from the buyer at this stage than after exchanging written claims.

After collecting all the documents, write or call the director or owner of the debtor company. We should not forget about the human factor in such processes: the manager or accountant responsible for payment could go on vacation and did not submit documents for payment. Unfortunately, no one is safe from such misunderstandings. In turn, if the conversation with the director does not bring results - go to the next steps.

Preparation and direction of the claim. The standard procedure for filing a claim is provided by the Commercial Codem of Ukraine. It is not mandatory, but this is how you formalize the requirements. In the claim you need to specify the requirements, as well as the calculation of debt. Penalties should also be calculated if they are provided for in the contract. We also recommend notifying the debtor of the possibility of litigation and additional costs that will be imposed on him: court fees, court costs, etc. It is advisable to involve a lawyer and file a claim on his behalf. This step will emphasize the seriousness of the intentions and persuade the debtor to make the right decision.

For some debtors, such a warning sign is enough. Anticipating further loss in court, they agree to pay the debt.

If even after the claim the position of the debtor has not changed, it is necessary to proceed to the court stage.

Judicial stage

The main purpose of the trial stage - get a document that will enforce the debt. Such a document will be issued in the form of a court decision.

But litigation can be lengthy and expensive. Therefore, before going to court you need to rationally approach this issue. Otherwise, you risk getting a court decision that will never be executed or additional costs that are not commensurate with the actual debt of the counterparty.

Therefore, before going to court you need at least:

and. Check the counterparty.

Realizing that the court decision will be up to you, debtors resort to unethical practices, avoiding liability.

Such techniques include: change of location and director, withdrawal of assets, liquidation, etc. The result of these actions is the impossibility of recovering debt from the debtor company.

To avoid such a situation, it is necessary to check the debtor before going to court. Information on the change of location, director, the beginning of the liquidation can be obtained from open sources: USR, Cabinet of electronic services. You can also contact the debtor's sales department or its counterparties to check if the company continues to operate.

The normal operation of the debtor company will increase the chances of debt collection. Conversely, suspicious changes can be a signal that it is no longer appropriate to go to court.

ii. Choose a way to go to court

You can apply to the court for a court order or a statement of claim. The application for the issuance of a court order is considered in the order of injunctive proceedings, the statement of claim - in the order of simplified or general claim proceedings.

Order proceedings

benefits	shortcomings
The court fee for filing an application is UAH 227.	The court revokes the court order if there is a dispute over the debt. For example: the buyer will declare that the goods are of poor quality and he should not pay for the part or that he did not receive the goods and in the invoices is not his signature.
The court considers the application for a court order within five days from the date of its receipt.	A written contract signed by the parties is required. The courts generally deny satisfaction if there is a public contract or a treaty of accession.
	Restrictions on the amount of debt - up to UAH 227,000.

Claim proceedings.

benefits	shortcomings
Consideration of cases in the absence of a written agreement.	The minimum term of consideration is 60 days in summary proceedings and 90 days in general proceedings.
Opportunity to correct deficiencies in the statement of claim, to provide additional explanations on all issues.	Court fee from 2270 hryvnias. up to UAH 794,000.
No restrictions on the price of the claim.

Depending on the circumstances, one or another option is more appropriate.

Order proceedings are suitable when there is no dispute between the parties or the debtor acknowledges the debt but refuses to pay. Also, the court order should be applied only in cases where there are no contradictions in the documents and the debtor will not be able to cancel the court order, inventing a contrived dispute.

For its part, a statement of claim must be filed if there are counterclaims or claims from the debtor. Or there were constant deliveries and payments between the parties and the presence of debt is not so obvious. In such cases, the court needs to evaluate all the evidence and possibly provide additional explanations from the parties.

Stage of execution of a court decision

After a court decision enters into force, there are two options for enforcing the decision: voluntary or coercive.

Before applying for enforcement of the decision, you should contact the debtor and offer to repay the debt again. Some debtors do not want to incur additional costs and risks associated with the enforcement of the decision agree to this option.

If the debtor does not enforce the decision voluntarily, it is required apply to the court for a writ of execution and after receiving it, apply to the state executive service or a private executor.

As a general rule, the writ of execution and the application for enforcement of the decision are filed at the location or place of residence of the debtor. The executor not later than the next working day from the date of receipt of the executive document makes the decision on opening of executive proceedings.

Note that enforcement of decisions private and state performers differ from each other.

Opening proceedings with a state executor will be free of charge. Regardless of the amount of money collected, the debtor will be required to pay an enforcement fee of 10% from the amount owed. But you can pay for such savings by the fact that the executor will not be in a hurry to carry out enforcement actions, which will have to be corrected by complaints to his management or even the court.

If we talk about the implementation of the decision of a private executor, then the situation is different. The private performer is personally interested in a positive result, and therefore will do everything necessary as soon as possible. Thus 10% from the collected sum will be paid as the basic reward to the executor. However, the agreement with the private executor may provide for the advance of the costs of enforcement proceedings and additional remuneration, which is already paid by the claimant.

Instead of a conclusion

Unfortunately, no one has a prescription that would always help to collect the debt from an unscrupulous counterparty. However, following these simple guidelines will help you avoid mistakes and increase your chances of a positive outcome.