Amicable Debt Collections Russia

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 1. General information

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 Cosmopolite Collections handle every case with maximal care in  order to ensure the achievement of the best results. Our staff  pursue debtors verbally and in writing within the bounds of  the state laws.

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 1.2. Local agents

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 We offer an extra service for visiting debtors at their premises.

The client will be represented by our local lawyers, who will  conduct the negotiations of the case.

Taking into account the  size of the country, it should be noted that the fee for visiting  debtors will include transport and accommodation costs.

In case the debtor wishes to visit our office, we will gladly  meet them to discuss possible solutions for your case face  to face.

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 1.3. Interest

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 The Russian business culture is not to pay interest fees,  so it is difficult to achieve an amicable solution and obtain  payment.  

If, however, an agreement is reached and the debtor is  ready to pay the interest, as per the currency control and  regulations, it is necessary:  

- To sign an additional agreement on the matter of  payment of the interests

- To confirm these changes in the currency deal passport

-  To issue an invoice from the creditor in the amount of  interest  To reconcile the payment with the debtor’s bank.

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 1.4. Debt Collection Costs Russia

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 Debt collection costs are not chargeable to debtors in Russia,  as there is no such law present for now.

So the payment  of debt collection costs depends only on the contractual  agreement between the creditor and the debtor.

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 2. Legal Debt Collections Russia

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 2.1. General information

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 It is mandatory to send a pre-legal warning to the debtor  30 days before legal actions are started. If this order is not  followed, the claim will be rejected by the court.

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 2.2. Required documents

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 Here is a list of the necessary documents for legal action:

- The contract signed by the parties with all appendices

- All unpaid invoices

- A statement of account indicating payments and credit  notes that have been booked regarding the outstanding  invoices

- The transporting documents with the debtor’s mark  proving the goods’ receipt and the customs declarations

- The correspondence and other documents related to the  debt

- A registry extract of the client’s company

-  A power of attorney.

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 2.3. Legal dunning procedure

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 The legislation of the Russian Federation does not cover the  possibility of such a procedure.

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 2.4. Lawsuit in Russia

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 A claim is submitted to the court and the court checks the  documents and the grounds of the claim. If the claim is  prepared and submitted correctly, the court announces the  date of a session, at which both parties have to be present.  

If it is necessary, the court may postpone the session and  announce a date for another hearing.

The parties will be  informed about the outcome in writing by the responsible  court.

In case the Commercial court solves the dispute, the  parties have to select a judge from each side.

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 2.5. Debt Collection Costs Russia

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 Costs of the proceedings (court costs and fees) are  determined by the provisions of the Commercial procedure  code and are not subject to any negotiation.

All costs depend  on the outstanding amount. There are different fees, which  can apply during the proceedings.

It is difficult to declare the  exact total sum of litigation costs.

An exact cost estimation  will be provided case by case, should legal action become.

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 2.6. Expected time frame

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 The average duration of the court proceedings can take at  least six months or longer depending on the complexity of  the case, as well as the availability of the judges.

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 2.7. Interest and costs in the legal phase

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 Out-of-court interest and costs can be claimed as part of  the outstanding amount during the legal proceedings.

The  outcome is highly dependent on the court and the judge. A  request for interest will increase the amount of the court  fee.

The defendant has to bear the court fee of the legal  proceedings in accordance with the Commercial procedural  code, but only if the decision is made in favour of the  claimant. Other expenses (e.g. expert’s fee) can be requested  from the debtor.

However, the decision whether those are  awarded from the debtor depends on the court.

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 3. Insolvency  proceedings

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 3.1. General information

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 There are two stages of the insolvency proceedings:

The surveillance stage – the trustee checks the financial  state of the debtor and decides if the rehabilitation of the  debtor is possible.

The rehabilitation or the bankruptcy procedure – the  rehabilitation is used to recover the financial state of  the debtor company and to repay their debts; the debtor  company continues operating after the rehabilitation is  finished.

If the rehabilitation is not possible, the court  appoints an administrator to sell the debtor company’s  assets and recover debts. The recovered money is divided  between the creditors in accordance with the creditors’  lines.

The company is deleted from the register after the  procedure is finished.

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 3.2. Proceedings

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 The claims have to be submitted within one month to the  court, as it is the court that makes the decision to start any  insolvency proceedings.

If a claim is not submitted within this term:  If the surveillance is started - The creditor’s claim is not  rejected and the court makes decision on it only when  the second stage is started.

If the surveillance procedure  ends without a transformation into the second stage,  then it is possible to submit the claim in the general order.

If the second stage is started - The court decides whether  the claim can be accepted. If it happens, the claim will be  last in the list of the creditors (5th line).

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 The lines of creditors:

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 - 1st line – Payments for damages to health and life
 - 2nd line – Salary claims of the employees
 - 3rd line – Other creditors
 - 4th line – Payments to the creditors that arise if the deal
 with the debtor is considered void
 - 5th line (unofficial) – Other claims.

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 3.3. Required documents

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 The documents to lodge a claim are the same as those for  the legal action.

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 3.4. Expected time frame and outcome

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 The whole duration of insolvency proceedings cannot be  predicted exactly. The minimal term of the first stage is six  months, but it can be prolonged. The second stage usually  lasts for 12–24 months, but it can be longer. The outcome  also cannot be predicted exactly and depends on the debtor  company’s state at the moment when the insolvency starts.

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Russia is a country located in Eastern Europe and Northern Asia. Its capital city is Moscow. Russia has 85 federal subjects, which includes 21 republics, 46 oblasts, 9 krais, 4 autonomous okrugs, 1 autonomous oblast, and 2 federal cities. The government system of Russia is a federal semi-presidential republic. The official language of Russia is Russian, and the currency is the Russian ruble.

It can be challenging for a foreign business to collect debts in Russia due to a number of factors, including the country's economic and political instability, the complexity of the legal system, and the difficulty of enforcing judgments. There are a number of debt collection agencies operating in Russia, and the industry has been in existence for several decades.

The national credit bureau in Russia is the National Bureau of Credit Histories, and some of the private credit reporting companies operating in the country include CRIF, Equifax, and Experian. Debt collection laws in Russia are generally uniform throughout the country, although local laws may sometimes apply.

There are several benefits to using commercial debt collection services for Russia:

1. Expertise: Debt collection agencies have specialized knowledge and experience in recovering debts, which can be particularly useful for foreign businesses that may not be familiar with the local legal and cultural environment.
2. Efficiency: Debt collection agencies can often recover debts more quickly and efficiently than businesses can on their own, as they have the resources and expertise to pursue multiple avenues for recovery.
3. Cost-effectiveness: Using a debt collection agency can be more cost-effective than trying to recover debts on your own, as you can avoid the time and expenses associated with pursuing legal action.
4. Risk reduction: Debt collection agencies can help to reduce the risk of non-payment by providing credit risk assessment and monitoring services.
5. Language skills: Multi-lingual debt collectors can communicate effectively with Russian debtors, which can be particularly helpful for foreign businesses.
6. Local presence: Debt collection agencies with local presence and knowledge of the local legal and cultural environment can be more effective at recovering debts in Russia.
7. Online services: Many debt collection agencies offer online tools and services, such as 24/7 debt recovery report websites, which can be convenient and efficient for creditors.

Our debt recovery agency has a very high success rate in Russia thanks to our multi-lingual debt collectors located in the country and our 24/7 online debt recovery report website. We have local debt collection managers in the cities of Moscow, St. Petersburg, and Novosibirsk.

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