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Debt Collection in Ukraine - 2024 Guide

Debt Collection in Ukraine

Updated on Tuesday 02nd April 2024

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If a company hasn’t worked under the prepayment regime, it may have to deal with debtors. Usually, the claimants are waiting for the debtors to pay their debts because of the actual economic context, in order to maintain a good relationship with them. Only after 3 or 6 months the claimants are forced to hire a debt collection agency or a law firm in Ukraine.
 
The pre legal procedure consists in the attempt to settle a program of payments with the debtor. The debtor is appealed several times by phone or in writing and a procedure of payment is decided. Sometimes, the claimants may choose to receive their debts in installments or in full after a longer period of time.
 
If the pre legal procedures don’t work and the debtor is not responding the attempts to settle the problem this way, legal measures may be taken. For this, the claimant must choose a court where the case will be heard. Usually, the general courts or the commercial courts are hearing this type of judgments. Our debt collection lawyers in Ukraine can help you recover a debt. 


Debt collection steps in Ukraine

 
The procedure of debt collection in Ukraine starts with the submission of the claim. The creditor must pay the filing costs (state duty and fees for technological support of the procedures). If an appeal is submitted, only a half of the state duty must be paid.
 
Usually, a term of two months is necessary to reach a decision, in case of the first instance courts but if the case is appealed at the Supreme Court and Superior Commercial Court and other appeal courts the whole process can reach a period of 12 months but also. The term may be extended to a period of three months.
 
The decisions taken by the courts of appeals can be appealed at the Supreme Court of Ukrainem, while the decision taken by the commercial courts of appeal may be appealed at the Superior Commercial Court of Ukraine.
 
If not appealed, the decisions of the first instance courts become effective in the 11th day from their announcement. If appealed, the decision becomes valid only after it is revised by the appeal courts.
 
If the decision for debt collection in Ukraine is taken in the advantage of the creditor, then the enforcement procedure may start. The following steps must be taken: an officer of the State Enforcement is reaching the debtor and asking him to respect the decision taken by the Court, the bailiff is searching for the debtor’s assets, the debtor’s property is seized, the debtor’s bank accounts are accessed in order to cover the claims and if necessary (if the funds are not sufficient) the goods of the debtor are offered in a public auction.

 

Enforcement of a court decision in Ukraine
 

Enforcement of a court decision in Ukraine refers to the legal act through which a competent entity decides, generally in the favor of a claimant, to seize certain assets from a party who has the quality of a debtor. The enforcement procedure in Ukraine is established based on the jurisdiction in which it was ruled, and thus, the local legislation makes a distinction between domestic enforcement and foreign enforcement. 
 
Our debt collection lawyers in Ukraine can provide to parties interested in this subject an in-depth advice on the legislation regulating the enforcement of a court decision. The latest modifications of the legislation were introduced in 2016 and, in the case of enforcement decisions that were taken by foreign entities, other regulations will apply as presented below. 

 

What are the main enforcement methods used in Ukraine?
 

Once the court has issued the a writ of execution concerning the enforcement decision, there are several procedures that can take place. The parties that can perform the execution of the court decision are the State Enforcement Service or the private executors, who can start one of the below mentioned actions: 
 
  • recover the debt from the debtor’s financial assets (they can refer to shares owned in a company, money held in bank accounts, intellectual property rights and others);
  • seizure of the debtor’s property (the seizure of the assets can refer to immovable and movable property);
  • attachment of various types of incomes (such as salary and even pension);
  • the interdiction to use a personal property and the interdiction to dispose of the respective property; 
  • the obligation to use the property in one of the ways that was specifically requested by the claimant. 
     
During debt collection in Ukraine, the enforcement can also refer to the interdiction of leaving the country. Considering that the enforcement legislation was recently modified, we invite persons interested in this legal matter to request legal assistance and advice from our debt collection lawyers in Ukraine


Recognition of EU Court Decision in Ukraine

 
Since Ukraine is not a member state of the European Union (EU), the recognition of a EU court decision is done following the national legislation on the recognition of foreign court judgments. The main rule of law which regulates the manner in which the recognition of EU and other foreign courts decisions is completed here is the Civil Procedural Code of Ukraine, Chapter VIII – On Recognition and Enforcement of Foreign Court Judgments in Ukraine. 
 
However, other procedures for the recognition of a foreign court decision in Ukraine can be applied under the treaties signed by the country with its partner states. Those who are involved in debt collection in Ukraine should study the provisions of the local legislation, in order to be able to understand the legal procedures on the recognition of a EU court decision; however, our team of debt collection lawyers in Ukraine may also provide investors advice on the Ukrainian law. 


How can one enforce a foreign court decision in Ukraine?
 

One of the first aspects foreigners should know on the recognition and the enforcement of a EU court decision in Ukraine is that the respective ruling can be brought in front of the Ukrainian courts in a period of maximum three years since the judgment entered into force; exemptions can apply on the recovery of payments and our team of debt collection lawyers in Ukraine can offer more details. 
 
In order to enforce the decision ruled by a EU court in Ukraine, the claimant has to file a petition that must be concluded in writing. The petition for permission to enforce a foreign court judgment has to contain a set of information, as follows: the claimant’s name and address, the name of the Ukrainian debtor (here, the Ukrainian authorities need additional details regarding the person’s domicile and property held in this country), as well as the legal grounds for which the petition is filed. 
 
As a general rule, the international treaties signed by the Ukrainian authorities specify the types of documents that have to be attached to the petition; however, not all treaties define the documents necessary for this procedure, and our team of debt collection lawyers can offer personalized assistance to those who are seeking to start the procedure of debt collection in Ukraine, depending on the nature of the claim. 
 
However, a compulsory document that has to be part of the application is a paper presenting the foreign court judgment (claimants can use a certified copy). Another official document necessary for the Ukrainian authorities is one that offers information on the fact that the foreign ruling entered into force, if this information is not already included in the foreign court judgment document. 
 
The recognition of a EU court decision is comprised of additional documents and those involved in this procedure are invited to contact our team of debt collection lawyers in Ukraine for legal representation and professional advice on the manner in which the proceedings can take place in the local courts.