Debt collection done right – Finance and Banking

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In everyday life, we all become involved in civil law relationships in one way or another, making verbal and written agreements. Despite the famous “pacta sunt servanda”, counterparties do not always behave well and sometimes fail in their obligations. A buyer does not pay for the goods delivered, or the debtor does not return the amount lent, resulting in debts. Here’s an overview of how these debts can be collected, what steps to take, and what to keep in mind to enforce the debt in a less costly and less inconvenient way.

There are two main ways to collect an unpaid debt:

a a notarial deed of execution

corn to research.

A notarized writ of execution is a non-judicial legal instrument, which is an order from a notary public to collect a certain amount of money owed to the debtor or to seize movable property. Creditors should note, however, that such recovery is possible only on indisputable claims (for example, on obligations resulting from notarial operations; obligations based on a written transaction, the maturity of which has arrived and the default is recognized by the debtor; obligations of seizure on the guarantee at the expiry of the loan payable by a pawnshop). Whatever the method chosen by the creditor, before recovering the debt, it is better to make sure…

  1. …the statute of limitations is active

The limitation period is the period during which the creditor can invoke the violation of his rights. The general statute of limitations is three years by law. For obligations of a certain duration, the limitation starts from the expiry date, that is, in our case, from the date of repayment of the debt specified by the agreement. If three years have passed since that date, try to find the last possible documentation, correspondence or partial payment that would confirm that the debtor acknowledges his debt. At the same time, non-compliance with the limitation period does not deprive the creditor of the possibility of taking legal action. If the debtor does not dispute and does not indicate the omission of the limitation period, the court is obliged to consider the dispute on the merits.

  1. … the debt claim procedure is followed

The notary and the judiciary require the mandatory presence of a settlement prior to the trial of the dispute. In other words, the creditor must send a pre-trial request to all known addresses of the debtor, which must contain: the reasons for the occurrence of the debt, the amount of the debt, the period of voluntary repayment of the debt and money transfer details. . Ignoring or refusing to repay the debt gives the green light to the creditor to enforce debt collection.

  1. …you have all the documents necessary for collection

Despite a seemingly simple debt collection procedure, in practice difficulties and obstacles constantly arise due to the absence of all the documents necessary for the creditor to substantiate his claims or the sums to be reimbursed. So, when collecting a debt with the help of a notary, the notary requires the original contract on the basis of which the debt was formed, as well as the document confirming that the debtor recognizes the debt (reconciliation act, repayment of the debt schedule, letter from the debtor with obligation to repay the debt, etc.). D.). The notary also requires an electronic charter, a certificate of state registration, a decision or protocol on the appointment of the director, an identity card or passport of the director, delivery notes confirming the release of goods, unpaid invoices and other documents required by the notary. . When collecting debts through the court, all documents on which the plaintiff relies as evidence to support his claims are also attached to the statement of claim.

  1. …the location of the notary/court is correct

Due to recent changes to the Law of the Republic of Kazakhstan on notaries, when drawing up a writ of execution by notaries, the requirements for the territorial nature of the activities of the chosen private notary must be observed . So, for example, if the creditor is registered in the Almaty region, he cannot request a writ of execution from the notary of the city of Almaty. Otherwise, this circumstance is the basis for the annulment of the writ. As for the jurisdictions, the request is filed before the court of the place of residence of the defendant:

  • for individuals, including individual entrepreneurs, the place of residence is the locality where the citizen permanently or mainly resides;

  • for legal persons – at the location of the legal person in accordance with the constituent documents and (or) at the address registered in the State Register of Business Identification Numbers. A claim against an organization without the constitution of a legal entity is presented at the location of the organization.

Also consider the service costs of the notary or a judicial authority. The costs of a notarial writ of execution are calculated according to the following formula: amount of debt * 1%1 (for legal persons) + 0.5 MCI2. The writ of execution fee cannot exceed MCI 100 (or KZT 306,300 for 2022). The state’s right to pay on real estate claims when filed in court, according to tax law, is as follows:

  • for individuals – 1% of the amount of the claim;

  • for legal persons – 3% of the amount of the claim;

Once the writ or court order has been issued, further debt collection actions are taken as part of the enforcement process.

Thus, the State grants the creditor the right to enforce the recovery of overdue debts by issuing an enforceable title or on the basis of a decision of a judicial authority. Compliance with these practical recommendations will prevent the creditors of a possible cancellation or refusal of the notary from issuing the writ of execution, the return or the refusal of a claim, and will save them time and money.

Footnotes

1. Subpar. 22-1) par. 1 Article 30-1 of the Law of the Republic of Kazakhstan “On Notaries”, a tax of 0.2% of the amount of recovery is levied from natural persons and 1% of the amount of recovery from legal entities;

2. Subpar. 23) Article 611 of the tax code of the Republic of Korea, a state duty of 0.5 MCI is payable for the notary brief of execution.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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