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Ugrin Svyatoslav

Head of problem debt practice, criminal lawyer

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Debt collection on a promissory note. What to do if the debtor does not return the money?

In life, there are often cases when you are approached by acquaintances, friends or relatives with a request to lend them money. Most people, when in debt, feel uncomfortable, unwilling to ruin a relationship, and try to repay the money as soon as possible.

However, recently, especially during the economic crisis caused by quarantine measures aimed at preventing the spread of acute respiratory disease COVID-19 caused by coronavirus SARS-CoV-2 in Ukraine, it is common practice when the debtor avoids debt repayment, or at all refuses to return the money on the grounds that he did not borrow money at all.
In the above circumstances, the creditor finds himself in a situation where he is forced to spend effort, time and money to return their own funds.
Do you want peace – prepare for war or what should be indicated in the promissory note?
As a rule, at the moment when the creditor begins to take measures aimed at repaying the debt, the first issue faced by the creditor is the correctness of the debt document.
As a general rule, the transfer of money in debt is made out by a promissory note, the execution of which, according to the majority of the population does not require special knowledge.
However, the promissory note law, namely Part 2 of Art. 1047 of the Civil Code of Ukraine, defines as confirmation of the loan agreement, and confirmation of the transfer of money from creditor to debtor.
As practice shows, most debt receipts are “written on the knee” and do not contain the necessary data that would allow in the future to collect money on such a receipt in court.

In general, the promissory note must contain the following information:

✅surname, name and patronymic of the debtor and creditor, information on their dates of birth, passport data, registration numbers of taxpayers’ registration cards, addresses of registrations and actual residence;
✅money amount transferred in debt (in numbers and words);
✅indication that the money is transferred in debt;
✅conditions for accrual and payment of interest for the use of the loan, if any;
✅conditions and term of return of funds;
An indication that the debtor has received the funds and that a receipt has been issued.

* The receipt is signed by the debtor and personally indicates his name, patronymic and surname, date and place of writing.

If possible, it is advisable to involve witnesses in the execution of the debt receipt and the transfer of funds, and, accordingly, to indicate information about them in the receipt, which they also certify with their own signatures.
A properly executed debt receipt significantly increases your chances of getting your money back.

What to do if the debtor refuses to return the money?
There are two main ways to repay a debt: civil law and criminal law.

The civil law method is to apply to the court with a statement of claim for recovery of funds (debt) under the loan agreement. With proper receipt of the receipt, as mentioned above, the creditor will most likely be able to obtain a court decision in his own favor and, in the future, apply to the enforcement service and collect the debt from the debtor’s funds or property. Moreover, at the same time as filing a statement of claim, it is advisable to apply to the court with a statement of security for the claim by seizing the debtor’s property.

The criminal law method is used when the debtor intentionally indicates incorrect or inaccurate data in the debt receipt, does not indicate the date of return of funds, etc. and subsequently refuses to return the funds or denies the fact of receiving money in debt. In such circumstances, the actions of the debtor may contain signs of fraud, ie criminal offense, liability for which is provided by Article 190 of the Criminal Code of Ukraine.
In this case, it is advisable to apply to the law enforcement agency with a statement about the commission of a criminal offense (crime) on the fact of fraud. However, each case requires a detailed analysis, formation of a legal position and development of an action plan, whether civil or criminal. In any case, it is advisable to use the services of a lawyer both when drawing up a promissory note and when negotiating with the debtor, as well as when collecting debt.

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