Perhaps the most common category of cases is debt collection from a counterparty in Ukraine (your buyer, customer, etc.). This category of cases is fairly typical and straightforward, provided that the key points that are important for this category of cases are taken into account and followed.
In this category of cases, it is important to pay attention to the following key elements:
- The current status of the debtor
- The statute of limitations
- Documents confirming the relevant business transaction that gave rise to the receivable (sale/delivery of goods, provision of services, performance of work, etc.).
Let us consider each of these key elements in more detail.
Current status of the debtor
It is very important to find out whether your debtor is in the process of termination/liquidation of the enterprise in Ukraine or liquidation of the individual entrepreneur, because then it is important not to miss the deadline within which it is possible to apply to the debtor to satisfy your claims (as a creditor) or to the debtor’s successor (if applicable during termination).
It is equally important to check the counterparty (debtor) who has not paid you for goods delivered or services provided/work performed, etc. in the Unified Register of Debtors, which will allow you to find out whether your counterparty is a debtor in other cases and whether there are any active enforcement proceedings against such debtor and their number.
It would also be useful to check whether your debtor is involved in other legal disputes and in what capacity (as a claimant or debtor).
All of the above measures are necessary if you want the process of collecting receivables from your debtor to be realistic and truly effective, rather than becoming a process “for the sake of the process.”
Statute of limitations
The statute of limitations is the period within which a person may apply to a court to protect their civil rights or interests. The general statute of limitations is three (3) years, calculated from the date when the person became aware or could have become aware of the violation of their rights or of the person who violated them.
Therefore, if your counterparty has violated its financial obligations to you for goods delivered, services provided, work performed, or other obligations, it is important not to delay in contacting the counterparty in a pre-trial manner or in court. For example, if you delivered a batch of goods to your counterparty on July 15, 2022, and the payment deadline under the contract was set within 2 (two) months after delivery (i.e., by September 15, 2022), then you, as the creditor (the party entitled to demand performance of the obligation from the debtor), have a breach of contract in terms of payments to you starting from July 16, 2022. That is, starting from July 16, 2022, the limitation period begins and you have 3 (three) years to contact the counterparty in a pre-trial procedure with a corresponding claim or with a corresponding lawsuit to the court and demand the recovery of the amount of debt for the delivered goods, annual interest and inflation increases, as well as other penalties, if specified in the contract (penalty, fine, etc.).
Documents confirming the relevant business transaction that gave rise to the debt
The main documents confirming the relevant business transaction (delivery of goods, performance of work, or provision of services) and which are mandatory for the recovery of debt from the counterparty both in pre-trial and in court proceedings are primary documents, i.e., the relevant delivery note for the goods delivered or the act of acceptance and transfer of the services provided or work performed. This is the main document certifying the fact that you have performed the relevant transaction (action) and the fact that it has been accepted by the other party (buyer, customer, etc.).
It is important that the primary documents are drawn up in full compliance with the requirements of the current legislation (Article 9 of the Law of Ukraine “On Accounting and Financial Reporting in Ukraine”), namely, they contain such mandatory details as: the name of the document (form); the date of compilation; the name of the enterprise on behalf of which the document is drawn up; content and scope of the business transaction, unit of measurement of the business transaction; positions and surnames of persons responsible for the business transaction and its correct execution; personal signature or other data enabling identification of the person who participated in the business transaction. Such primary documents may be drawn up in paper or electronic form.
!!! Always pay attention to the powers of the persons who signed the primary document if this person is someone other than the head of the business entity. In this case, you must have a power of attorney or other document (order, etc.) granting such person the authority to accept and sign for the relevant goods, work, or services.
Of course, if you have a contract with your counterparty for the supply of goods, performance of work, or provision of services, this will only increase your chances of recovering penalties (penalties, fines) in addition to the amount of the debt, if such penalties are specified in the contract. After all, the contract specifies clear payment terms, penalties for late payment, etc.
!!! But even if you have not signed a contract with your counterparty, this does not mean that you will not be able to collect the debt from your counterparty. The main thing is that the primary documents confirming the fact of the relevant business transaction between the two parties have been signed.
Therefore, if your counterparty is actually operating, has not been terminated and is not in liquidation, and the statute of limitations has not expired, you can safely prepare a claim to collect the debt in a pre-trial procedure or immediately prepare a lawsuit.
Even if your counterparty is simultaneously involved in other court cases or is a debtor in enforcement proceedings, this does not prevent you from recovering the debt. To ensure a real mechanism for debt collection, there are measures to secure a claim (such as seizure of property and/or funds belonging to the defendant; prohibition of the defendant from performing certain actions; etc.), which will help to further guarantee the actual collection of the debt from the debtor in your favor in the future.
The attorneys and lawyers at Persha Yuridichna Law Firm in Ukraine have extensive and successful experience in debt collection cases. We are familiar with all the legal intricacies of this type of case, so we will be happy to provide you with legal advice or prepare a claim and/or a lawsuit for you to best protect your interests.
Fill out the application form on the website right now or call one of the following numbers: +38 (044) 35-35-164, +38 (067) 306-89-89, +38 (063) 45-85-448, +38 (099) 367-89-89.