Debt Collection Agency Russia
Amicable Debt Collections Russia
1. General information
Cosmopolite Collections handle every case with maximal care in order to ensure the achievement of the best results. Our staff pursue debtors verbally and in writing within the bounds of the state laws.
1.2. Local agents
We offer an extra service for visiting debtors at their premises.
The client will be represented by our local lawyers, who will conduct the negotiations of the case.
Taking into account the size of the country, it should be noted that the fee for visiting debtors will include transport and accommodation costs.
In case the debtor wishes to visit our office, we will gladly meet them to discuss possible solutions for your case face to face.
The Russian business culture is not to pay interest fees, so it is difficult to achieve an amicable solution and obtain payment.
If, however, an agreement is reached and the debtor is ready to pay the interest, as per the currency control and regulations, it is necessary:
- To sign an additional agreement on the matter of payment of the interests
- To confirm these changes in the currency deal passport
- To issue an invoice from the creditor in the amount of interest To reconcile the payment with the debtor’s bank.
1.4. Debt Collection Costs Russia
Debt collection costs are not chargeable to debtors in Russia, as there is no such law present for now.
So the payment of debt collection costs depends only on the contractual agreement between the creditor and the debtor.
2. Legal Debt Collections Russia
2.1. General information
It is mandatory to send a pre-legal warning to the debtor 30 days before legal actions are started. If this order is not followed, the claim will be rejected by the court.
2.2. Required documents
Here is a list of the necessary documents for legal action:
- The contract signed by the parties with all appendices
- All unpaid invoices
- A statement of account indicating payments and credit notes that have been booked regarding the outstanding invoices
- The transporting documents with the debtor’s mark proving the goods’ receipt and the customs declarations
- The correspondence and other documents related to the debt
- A registry extract of the client’s company
- A power of attorney.
2.3. Legal dunning procedure
The legislation of the Russian Federation does not cover the possibility of such a procedure.
2.4. Lawsuit in Russia
A claim is submitted to the court and the court checks the documents and the grounds of the claim. If the claim is prepared and submitted correctly, the court announces the date of a session, at which both parties have to be present.
If it is necessary, the court may postpone the session and announce a date for another hearing.
The parties will be informed about the outcome in writing by the responsible court.
In case the Commercial court solves the dispute, the parties have to select a judge from each side.
2.5. Debt Collection Costs Russia
Costs of the proceedings (court costs and fees) are determined by the provisions of the Commercial procedure code and are not subject to any negotiation.
All costs depend on the outstanding amount. There are different fees, which can apply during the proceedings.
It is difficult to declare the exact total sum of litigation costs.
An exact cost estimation will be provided case by case, should legal action become.
2.6. Expected time frame
The average duration of the court proceedings can take at least six months or longer depending on the complexity of the case, as well as the availability of the judges.
2.7. Interest and costs in the legal phase
Out-of-court interest and costs can be claimed as part of the outstanding amount during the legal proceedings.
The outcome is highly dependent on the court and the judge. A request for interest will increase the amount of the court fee.
The defendant has to bear the court fee of the legal proceedings in accordance with the Commercial procedural code, but only if the decision is made in favour of the claimant. Other expenses (e.g. expert’s fee) can be requested from the debtor.
However, the decision whether those are awarded from the debtor depends on the court.
3. Insolvency proceedings
3.1. General information
There are two stages of the insolvency proceedings:
The surveillance stage – the trustee checks the financial state of the debtor and decides if the rehabilitation of the debtor is possible.
The rehabilitation or the bankruptcy procedure – the rehabilitation is used to recover the financial state of the debtor company and to repay their debts; the debtor company continues operating after the rehabilitation is finished.
If the rehabilitation is not possible, the court appoints an administrator to sell the debtor company’s assets and recover debts. The recovered money is divided between the creditors in accordance with the creditors’ lines.
The company is deleted from the register after the procedure is finished.
The claims have to be submitted within one month to the court, as it is the court that makes the decision to start any insolvency proceedings.
If a claim is not submitted within this term: If the surveillance is started - The creditor’s claim is not rejected and the court makes decision on it only when the second stage is started.
If the surveillance procedure ends without a transformation into the second stage, then it is possible to submit the claim in the general order.
If the second stage is started - The court decides whether the claim can be accepted. If it happens, the claim will be last in the list of the creditors (5th line).
The lines of creditors:
- 1st line – Payments for damages to health and life
- 2nd line – Salary claims of the employees
- 3rd line – Other creditors
- 4th line – Payments to the creditors that arise if the deal
with the debtor is considered void
- 5th line (unofficial) – Other claims.
3.3. Required documents
The documents to lodge a claim are the same as those for the legal action.
3.4. Expected time frame and outcome
The whole duration of insolvency proceedings cannot be predicted exactly. The minimal term of the first stage is six months, but it can be prolonged. The second stage usually lasts for 12–24 months, but it can be longer. The outcome also cannot be predicted exactly and depends on the debtor company’s state at the moment when the insolvency starts.
Russia is a country located in Eastern Europe and Northern Asia. Its capital city is Moscow. Russia has 85 federal subjects, which includes 21 republics, 46 oblasts, 9 krais, 4 autonomous okrugs, 1 autonomous oblast, and 2 federal cities. The government system of Russia is a federal semi-presidential republic. The official language of Russia is Russian, and the currency is the Russian ruble.
It can be challenging for a foreign business to collect debts in Russia due to a number of factors, including the country's economic and political instability, the complexity of the legal system, and the difficulty of enforcing judgments. There are a number of debt collection agencies operating in Russia, and the industry has been in existence for several decades.
The national credit bureau in Russia is the National Bureau of Credit Histories, and some of the private credit reporting companies operating in the country include CRIF, Equifax, and Experian. Debt collection laws in Russia are generally uniform throughout the country, although local laws may sometimes apply.
There are several benefits to using commercial debt collection services for Russia:
- Expertise: Debt collection agencies have specialized knowledge and experience in recovering debts, which can be particularly useful for foreign businesses that may not be familiar with the local legal and cultural environment.
- Efficiency: Debt collection agencies can often recover debts more quickly and efficiently than businesses can on their own, as they have the resources and expertise to pursue multiple avenues for recovery.
- Cost-effectiveness: Using a debt collection agency can be more cost-effective than trying to recover debts on your own, as you can avoid the time and expenses associated with pursuing legal action.
- Risk reduction: Debt collection agencies can help to reduce the risk of non-payment by providing credit risk assessment and monitoring services.
- Language skills: Multi-lingual debt collectors can communicate effectively with Russian debtors, which can be particularly helpful for foreign businesses.
- Local presence: Debt collection agencies with local presence and knowledge of the local legal and cultural environment can be more effective at recovering debts in Russia.
- Online services: Many debt collection agencies offer online tools and services, such as 24/7 debt recovery report websites, which can be convenient and efficient for creditors.
Our debt recovery agency has a very high success rate in Russia thanks to our multi-lingual debt collectors located in the country and our 24/7 online debt recovery report website. We have local debt collection managers in the cities of Moscow, St. Petersburg, and Novosibirsk.