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UKRAINE-PRIVATE ENFORCEMENT AGENTS

PRIVATE ENFORCEMENT AGENTS WILL COME FOR UKRAINIAN DEBTORS

As early as in autumn, private enforcement agents will become active in Ukraine. According to forecasts, private enforcement service will be much harsher than debt recovery firms which tried to find a joint decision with debtors as to the repayment of troubled debt. It should be noted that debt recovery firms are private entities which deal with debt repayment for a particular remuneration. Banks that are in a position to resolve problems with payment defaults request help from debt collectors. Debt recovery companies are generally interested in settling indebtedness issues at the prejudicial stage. Private enforcement agents institutionalized by the new law is formally a completely different thing.

If private enforcement agents fail to find compromise with debtors, they will be able to attach debtor’s property or prohibit the debtor to go abroad even for a debt of UAH 10,000. And only eviction from apartment or house still remains with the government enforcement agents.

Attachment of property

If a debtor after working with a debt recovery company fails to make payment in repayment of his/her debt, the matter is submitted to private enforcement agents. The private enforcement agent does not need to explain to the debtor the necessity to make payment. He will without any hesitation attach debtor’s flat, vehicle, deposit or even file a motion to court to prohibit debtor’s going abroad.

Where is danger?

There is a suspicion that the situation with private enforcement agents may be dangerous, since they are likely to be used in seizure of property schemes by receiving a court’s decision and initiating an enforcement proceeding. Or communicating with notaries who will collect money through enforcement agents. The new service will not have any territorial division, and an enforcement agent, e.g. from Kherson, will enforce decisions in Kharkiv or Chernihiv. The main problem may be that the debtor will lose much time to learn materials in the proceedings. And during that time he/she may lose everything.

 

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