COLLECTION OF DEBT FROM A LEGAL ENTITY (FROM COMPANY)

Debt collection from a legal entity (company) is a set of actions aimed at repaying the debtor’s financial obligations to the creditor for the delivered goods, work performed, services rendered.

In addition to the cases described above, debt collection from a legal entity may take place when collecting advance payments or prepayments from debtor enterprises in case of default on obligations assumed.

What does the set of actions for collecting debt from the enterprise include?

A set of measures to collect debts for the delivered goods, work done, services rendered or advance payments, prepayments includes a list of actions on the part of the creditor, the ultimate goal of which is to receive the funds claimed by the creditor, and whose rights are violated, as well as recovery from the debtor compensation for violation of obligations in the form of penalties, which includes a fine, a fine, 3% per annum, inflationary losses.

The set of actions to collect debt from an enterprise can be conditionally divided into stages, among which three main ones can be distinguished.

Claim (pre-trial) debt collection

This stage consists mainly in sending written claims to the debtor enterprise with a demand to repay the debt. The terms of the claim settlement of disputes between the parties to a contractual relationship are usually fixed in the contract, and, in fact, determine the procedure and conditions for submitting claims, as well as the procedure and terms for providing responses to such claims.

Basically, with large delays in the fulfillment of monetary obligations, which automatically pull the accrual of large penalties, claim recovery of debt is successful if the creditor refuses to pay the debtor penalties. In this case, the creditor “forgives” the debtor a certain amount of fines, and in return quickly, without additional effort, receives the main “body” of the debt.

Judicial debt collection

In its essence, it is the second stage of debt collection from a legal entity, which is resorted to by the creditor if the claim (pre-trial) debt collection has not yielded results. The essence of this stage is to file a lawsuit to recover a debt from a legal entity in a competent court.

This stage is more expensive than the claim work, as it requires, at a minimum, the payment of a court fee, expenses for the participation of lawyers, lawyers in the trial, etc. Also, this stage of judicial debt collection from a legal entity is quite lengthy and can take from six months to several years, depending on the complexity of the case. At the same time, when recovering a debt from a legal entity (firm) through the court, the creditor, in addition to the principal debt, has the opportunity to significantly increase the amount of recovery due to penalties. Sometimes there are cases when the amount of penalties significantly exceeds the amount of the principal debt. This stage ends with the receipt of a court decision on the collection of debt from a legal entity (company). In practice, there are cases when, after a court decision in favor of a creditor to collect a debt from a legal entity (firm), such a company, without waiting for the opening of enforcement proceedings (the third stage of collection), fulfills the court decision and completely pays off the debt.

Forced collection of debt from a legal entity

Forced debt collection from a legal entity is the third and final stage of debt collection from a counterparty. This stage begins with the opening by the state executive service or by a private executor of enforcement proceedings for the enforcement of a court decision to collect a debt from a legal entity.

Enforcement proceedings for the recovery of a debt from a legal entity are opened by a public or private executor at the request of the creditor, in whose favor the court decision has been made, after such a court decision has entered into legal force. Together with the application, the creditor submits to the executor a court order (executive) sheet, after which the executor opens enforcement proceedings for the forced collection of debt from the legal entity.

The opening of enforcement proceedings to collect a debt from a legal entity has a number of negative consequences for the debtor, which significantly complicate any economic activity of the debtor’s enterprise, in particular:

• arrest of all bank accounts of the enterprise;
• arrest of property and production capacities of the enterprise;
• entering the debtor enterprise into the register of debtors.

The above negative consequences of opening enforcement proceedings to recover a debt from a legal entity (from a company) can significantly negatively affect the work of the debtor enterprise, or even lead to its bankruptcy and are quite effective.

A separate way to collect a debt from a legal entity is to initiate a criminal case against the managers and / or owners of the enterprise on the fact of fraud, liability.

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