Recovery of debts

Our company offers assistance in solving the following problems:

• Advising on contract law issues
• Drafting contracts of various levels of complexity
• Analysis of contracts

• Analysis of issues of international law and international jurisdiction
• Preparation of claims and petitions for claims arising from contractual relations
• Representation of the Client’s interests in pre-trial and court proceedings.

In our economically unstable time quite often we face non-fulfillment of contractual obligations by partners. As part of this review, we will consider the procedure for recovering debts under loan agreements.

Loan agreements can be fixed-term or open-term. The fixed-term agreement specifies loan repayment final date with possible interest. And before reaching the specified date, it is very difficult to receive your money, unless otherwise stipulated in the terms of the agreement. In an open-term agreement, on the contrary, the loan repayment date is not defined and the money can be demanded back at any time, while following the procedure established by law.

Namely, according to the Law of Obligations Act, the borrower shall be notified 2 months in advance of his/her intention to withdraw from the agreement and indicate the exact date of repayment.

According to its form, a loan agreement can be concluded in any form: oral, written, notarial. However, you need to understand that in the event of a dispute, the entire burden of proof lies with the party that made the claim, and if there is a debt, it is the creditor who will have to prove that agreement took place.

Therefore, the oral form of agreement is the most problematic choice in the design of contractual relations. At the same time, unofficial receipt written indicating the amount and data of the parties is fully accepted by our judicial authorities as an agreement concluded in writing.

Regardless of the type of agreement, the algorithm of the Lender’s actions in the absence of voluntary fulfillment of obligations by the Borrower is absolutely identical:

• Handling a written claim and providing a time limit for the voluntary fulfillment of the obligation, with the description of the burdens and costs of litigation, as punishment for non-fulfillment of the said claim.
• Going to court in an expedited proceeding.
• Or as an alternative to going to court as part of a lawsuit. With the possibility to charge the Borrower/Debtor with all incurred procedural expenses.

What you need to know when going to court:

• litigation is not fast (other than expedited),
• the burden of proving the debt lies with the lender,
• a court decision on the recovery of a debt is not yet the money itself, but only an executive document for a bailiff.