DEBT COLLECTION IN RUSSIA
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You have landed on the right page if you are looking for Russian debt recovery solutions in Russia or offshore. My services help you to recover your debt from your Russian partner in a legal way. I am an attorney and not a financial institution so I do not offer financial services related to debt collection in Russia like:
- Sale of Debts
- Purchase of Debts
- Organisation of Debt Auctions
- Property Auctions
- Debt Management
As Russia does not have a law on debt collection debt collectors are subject to the general norms of the Civil Code, Criminal Code and other fundamental laws along with special laws that regulate personal data, collateral, credit history, information protection and bankruptcy.
Any private company and individual entrepreneur can act as a debt collector in Russia. Don’t go to the agencies you do not know as their methods and resources can compromise you and yield no results.
The following steps can be recommended under the guidance of a Russian attorney.
- In a pre-trial period, very few legal methods are effective but all measures will be taken to solve the issue at this stage. I’ll try to find out what caused the debtor to get into arrears, mail and call the debtor, meet with him personally provided I am lucky to get his whereabouts and get through the corporate barriers made up of unfriendly secretaries and security briefed to cut off the creditors, collectors and their representatives. E-mails and registered or courier mails have low efficiency as they most often do not reach the addressee. The email details and delivery/ postal service receipts will not be considered by a court in Russia as evidence of your message delivered to the debtor. In rare cases when you get in contact with debtors they will tell you that they are not related to the actual entity which by the time has been probably dissolved without a trace. That’s why you need a good local solicitor, he can help you cut the corners without stepping over the line.
- Filing a legal suit is the next step. In this period legal actions are taken to ensure debt payment including property confiscation and the limitation of legal capacities to prevent debtors from undesirable action. Again collection is tricky even if you have a court decision in your hand, the attorney who handled your case will help you to collect your cash.
- Publicizing the court action and informing the debtor’s partners and colleagues as well as professional and financial institutions about his insolvency can be very effective. However, when using these methods, it is important not to overstep the degree allowed by the law that’s why you need a good Russian attorney.
- A criminal suit for fraud, illegal borrowing or debt evasion is the final option.
Among illegal methods or debt recovery there are blackmail and making threats against the debtor, his relatives and property. Debt collectors often use their ties with the authorities to start an investigation or bankruptcy procedure to prevent the indebted company from operating normally and gain control over it. In response to that, anti-collection agencies have appeared that advise debtors on how to evade debt payment, which is obviously an illegal activity.
For foreign entities going into business in Russia I recommend safety tips that are standard for any business partner i.e. checking the registration certificate of a company, its legal and actual address and contact details including website, emails, telephone and fax numbers, and investigating the list of shareholders. Avoid those with shady characters as shareholders however lucrative the business may look.
You don’t have to travel all the way to Moscow to present your case, contact me on +7-495-518-72-62 and send your initial query with basic details at maxim(at)arbitratus(dot)ru , I’ll analyze your case and we’ll work out the best strategy. You will send me a Presentation Letter to approach your debtor and scans of the documents supporting your claim. Before we work out and sign our service agreement the customer pays an hourly rate of USD200 or a daily rate of USD1,200 plus travel expenses (air fare, lodging, taxi, meals, phone) for my work outside Moscow. After the service agreement is signed I work for the success fee which in Russia is from 20% to 50% of the total debt, the actual figure depends on the complexity of the case, the time of the commission payment and the method of debt payment to the customer.
No need to say that all information provided by you will be treated as confidential.