Debt Collection Agency Ukraine
Amicable Debt Collections Ukraine
1. General information
As professionals in collection, Cosmopolite Collections are in a position to provide first-class services, individual treatment and analysis of each case in order to successfully recover the overdue debts.
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. 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 Ukrainian 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 interest
- To confirm these changes in the currency deal passport
- To issue an invoice from the creditor in the amount of the interest
- To reconcile the payment with the debtor’s bank.
1.4. Debt collection costs Ukraine
Debt collection costs are not chargeable to debtors in Ukraine, 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 Collections Ukraine
2.1. General information
Entering into legal proceedings is possible without a prior warning to the debtor. A letter informing the possibility of legal action can be sent to the debtor as the last and final reminder at the end of amicable collections and such a letter can be used as proof that all pre-court efforts are fruitless.
However, the presence of such a letter does not guarantee that a court decision will be received any faster.
2.2. Required documents
Here is a list of the necessary documents for legal action:
- The contract signed by the parties with all appendixes
- 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 Ukraine does not cover the possibility of such a procedure.
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 Ukraine
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 becomes necessary.
2.6. Expected time frame
The average duration of the court proceedings can take at least six months or longer.
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, although the outcome is highly dependent on the court and the judge.
Usually the court awards maximum interest amounting to 10% of the principal amount in cases where it is requested from the debtor, however, there is no 100% guarantee that the interest will be awarded.
A request for interest will increase the amount of the court fee. The defendant has to cover the court fee if the decision is made in favour of the claimant.
Other expenses (i.e. experts’ fees) can be requested from the debtor; however, the decision whether they 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 reorganisation procedure – The debtor company try to recover their financial situation and to cover debts in accordance with the plan.
- The liquidation procedure - The court appoints an administrator to prepare the creditor’s list, receive the documents, recover debts and sell assets.
The company is liquidated once the procedure is finished.
A claim has to be submitted within one month after the court making the decision to start insolvency proceedings.
If the claim is not submitted within this term, it can be accepted by the court but the claim will be included in the last line of the creditors.
3.3. Required documents
The documents to lodge a claim are the same as those for legal action.
3.4. Expected time frame and outcome
The deadline to lodge claims is one month and it starts from the date when the information about the court decision is published in official sources. The whole duration of insolvency proceedings cannot be predicted exactly.
Also, the outcome cannot be predicted exactly and depends on the debtor company’s state at the moment when the insolvency starts.