Forced Levy

Judicial proceedings


Enforced debt collection procedure involves filing of legal complaint and subsequent enforcement of judgment. Each stage has its particularities and takes some time. The more complex a debt collection situation is the more time will be required to resolve it.
Collection of debt by filing a legal complaint, followed by enforcement proceedings, allows to collect debt even if a debtor refuses to pay. Debt collection is enforced by a court ruling. The debt amount owed, including penalties and late fees, will be debited from debtor’s accounts or, if the required amount is unavailable or account balance is insufficient, debtor’s property will be placed under collection. In addition, creditor’s enforcement-related expenses, including court fees, will be fully paid at the debtor’s expense.
Judicial debt collection procedure:
   preparation of documents proving existence of accounts payable (loan agreement, account statement and/or calculation of debt, cash advance application, etc.);
   lodging a complaint against debtor, if the agreement or law provide for complaint lodging procedure;
   preparing and filing an application to court for debt collection;
   participation in court hearings;
   entry of court ruling in the bank’s favor.
Therefore, the meaning of the judicial phase of debt collection procedure is to reaffirm a debtor’s obligation to repay debt and have it officially documented in the form of a court ruling.
In addition to instruments used in the course of court hearings, in the judicial phase of debt collection procedure the bank is able to apply to court for security of complaint. It may be done when the case is heard by court and also when the case is handed over to enforcement authorities.
The most widely-used and efficient method of securing a complaint is a court ruling placing a debtor’s property under arrest, which means that a debtor is temporarily deprived of the right to manage his property. The court may rule to arrest a debtor’s property on lawful grounds after hearing a creditor’s application for security of complaint, which must explain the circumstances necessitating, in the applicant’s opinion, the placement of arrest. The application must also meet other requirements of the procedural law. The degree of justification and commensurability of debt with the placement of debtor’s property under arrest is decided by court in every particular case.
Enforcement of court rulings in terms of both securing complaint by placing arrest and securing enforcement of court rulings belongs to the competence of the State Enforcement Service under the Justice Ministry of Ukraine.
Enforcement proceedings
Enforcement of court rulings on debt collection is the task of the State Enforcement Service (SES) under the Justice Ministry of Ukraine. Court rulings are enforced by state enforcers.
Under Article25 of the Law of Ukraine On Enforcement Proceedings a state enforcer is obliged to accept an enforcement writ for enforcement and open enforcement proceedings, if the deadline for enforcement of this writ has not expired yet, the writ meets the applicable requirements of law and was presented for enforcement to the appropriate body of SES. A resolution on the opening of enforcement proceedings must be issued within three business days after receiving an enforcement writ, and the copies thereof must be served to the collector and debtor by the following business day.
At collectors request, a state enforcer may, at the same time with issuing a resolution on the opening of enforcement proceedings, may place the debtor’s property and funds under arrest by issuing an appropriate resolution.
Itis important to remember that a state enforcer must enforce collection of debt within sixmonths after a resolution on the opening of enforcement proceedings was issued.
Under Article 32 of the Law of Ukraine On Enforcement Proceedings, measures of enforcing debt collection rulings include:
  •    collection of debtor’s funds and other property (proprietary rights), even if they are held by other persons;
  •    collection of debtor’s wages (earnings), income, pension, stipend;
  •    confiscation from debtor and handover to collector of certain items mentioned in a resolution;
  •    other measures provided by a resolution.
The state enforcer carries our enforcement action mostly at the debtor’s place of residence, stay or employment or where his property is located.
When initiating enforcement proceedings, the state enforcer also issues a resolution on the search for this property.
Considering the foregoing, collection of debt represents a package of measures aimed at repayment of a loan or debt: collection in court by creditor himself, or by transferring the right to demand payment of debt, using bankruptcy proceedings, and other. Every debt collection phase has its own legal regulations and particularities, knowledge of which will help protect creditor’s interests and repay the debt in the shortest possible time.

Therefore, if an obligation under loan agreement is not being fulfilled voluntarily, a debt will be collected forcibly, which will place additional costs upon debtor, such as: reimbursement of court fees, enforcement costs, enforcement charge, legal expenses, etc. In addition, time which will have to be spent on representing debtor’s interests in court and in the course of enforcement proceedings amounts to many months.