Head of practice
Attorney. Specialist in commercial and labor law. Over 16 years of experience in legal support of businesses - debt recovery, contract enforcement, recovery of damages, commercial property and lease disputes.
Collection of receivables
What is included in accounts receivable?
Accounts receivable collection is a key process for ensuring the cash flow and stability of a company. These debts arise when a company provides goods, services or loans with deferred payment and in other cases. They can be divided into different types, including:
- for purchased goods, works, services provided;
- issued to employees for business trips or other expenses for which they did not submit a report;
- debts of shareholders to the enterprise (for example, for loans received);
- debt funds from counterparties for their violation of the terms of contracts (in the form of penalties);
- other types of receivables, in particular any other debts that arose as a result of the taxpayer’s economic activity.
Accounts receivable arise in relation to the enterprise from buyers and customers (based on unpaid invoices under the contract, for example), employees (for advances issued), accountable persons. Accounts receivable also arise in the process of compensating for the company’s losses. It is worth noting: tax services have the right to collect various types of receivables from taxpayers to repay their tax debt (in accordance with the Procedure approved by the Ministry of Finance of Ukraine dated 16.06.2017).
Debt collection: procedure
The process of collecting receivables from debtors is called debt collection. It can be difficult for ordinary citizens because it requires strict adherence to the law. Below is a basic procedure for collecting receivables:
- first, pre-trial settlement. The first step is to conduct a detailed inventory of receivables (collecting information about debtors, amounts of debt, payment terms and availability of documents confirming the debt) and send claims demanding payment with the obligatory indication of the maturity date and possible consequences in case of non-fulfillment of the requirements. It will also be unnecessary to negotiate with the debtor, if he makes contact, to find a compromise solution, which may include debt restructuring, granting a payment deferral, etc.
- second, judicial settlement. If the pre-trial settlement did not yield results, it is necessary to prepare a statement of claim to the court, in which to indicate the circumstances of the case, the plaintiff’s claims and evidence confirming the receivables. After filing the statement of claim, the court opens proceedings in the case and makes a decision based on the evidence provided and the norms of the law;
- Thirdly, the execution of the court decision. After the decision is made, it is necessary to obtain a writ of execution for its forced execution. In the future, it is necessary to submit the writ of execution to the enforcement service, which opens enforcement proceedings and takes measures to collect the receivables.
Consultation with a specialized lawyer
Cases when collection of receivables becomes impossible
Collection of receivables may become impossible in a number of cases, including:
- expiration of the statute of limitations (the period established by law during which the creditor can apply to court to protect his rights has expired);
- bankruptcy of the debtor (debt collection in this case occurs in accordance with the procedure provided for by bankruptcy legislation and does not always lead to full repayment);
- force majeure circumstances (natural disasters, epidemics, military actions, etc.);
- disappearance or death of the debtor (debt collection is possible only from heirs if they have accepted the inheritance)
- absence of documents confirming the existence of the debt.
Legal assistance in debt collection
Legal support for debt collection may be necessary at various stages of this process. Here are the main aspects in which a lawyer from Prikhodko & Partners can assist a creditor:
- providing legal advice and legal analysis of documents. The lawyer will help analyze contracts, invoices, certificates of work performed and other documents confirming the debt, which will allow you to assess the prospects and determine a strategy of action;
- taking pre-trial settlement measures. The lawyer will draw up a legally competent claim against the debtor, which will increase the chances of voluntary repayment of the debt, and will be able to conduct high-quality negotiations.
- preparation of procedural documentation and judicial settlement. Our specialist will draw up a statement of claim to the court, ensure the correct execution of documents and increase the chances of success in court.
interaction with the enforcement service. A professional specialist will help obtain a writ of execution and monitor the enforcement proceedings and the actions of the executor.
So, accounts receivable is the amount of money owed to the company by customers, employees or other accountable persons (for goods, works, services, advances issued, loans, etc.). Collection of accounts receivable becomes impossible in the event of the expiration of the statute of limitations, bankruptcy of the debtor, force majeure, disappearance or death of the debtor, as well as the absence of documents confirming its existence.
Legal assistance from the specialists of “Prikhodko & Partners” will be very useful to you at all stages of debt collection. To find out the cost of legal support, fill out the form below.
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Is a subscriber form of service possible to quickly resolve issues as they arise?
Yes, of course, we take companies for permanent support.
The subscription form of service allows you to receive a full range of legal services on an ongoing basis for a fixed monthly fee.
Our lawyers will accompany all economic legal relations of your company: from drawing up contracts and solving corporate issues to representing interests during inspections by regulatory bodies and in court disputes.
We have very flexible pricing, so contact us and we will discuss your specific case.
Do you work only in Kyiv?
Fortunately, modern technologies allow us to effectively solve almost any legal issue online regardless of your location. In cases where personal presence is necessary, our lawyers are ready to travel to any point in Ukraine. Moreover, thanks to our network of reliable partners abroad, we can provide legal support even in international cases. Our goal is to provide you with quality legal assistance wherever you are.
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