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Procedure on enforceable debt collection

Saturday, 29 November 2014 11:50
Procedure on enforceable debt collection

General provisions of enforceable debt collection and cooperation order

Having received a writ of execution the Bank as the Creditor/Mortgage holder/Collateral holder is acquiring a right to apply with a request on enforceable debt collection of the Customer to authorities of the State Executive Service.

In particular, these documents are:

  1. writs of execution of the court of general jurisdiction issued for fulfillment of appropriate decisions;
  2. orders of economic courts  issued for fulfillment of appropriate decisions;
  3. executive endorsements of notaries on repossession of collateralized property;
  4. other resolutions, decisions, court awards stipulating appropriate legal proceedings.

Within 3 (three) days after having received appropriate writ of execution by the Bank, an authorized representative of Distressed Assets Recovery Unit prepares and sends an application to authorities of the state executive service on starting court enforcement action on fulfilling received writ of execution.

While sending writs of execution, it is necessary to take into consideration a place of stay of the Customer/Guarantor (of their property) and dependence of category of received writ of execution on a certain unit of the state executive service.

The bodies of the state executive service fulfill writs of execution at the place of stay of the Customer/Guarantor (of their property). The Bank, as the Creditor, has a right to select bodies of the state executive service which can implement the regulation on fulfilling decision on territory where their functions are spread.

General term for executive actions conducted by the state executor is not to exceed 6 (six) months starting from the day of court enforcement action.

In order to fulfill a writ of execution in due time and accelerate this procedure, the Bank sends an application on seizure of the Customer’s/Guarantor’s property together with an application on enforcement.

In order to detect all assets of the Customer/Guarantor and in order to receive another necessary information, Distressed Assets Recovery Unit applies to Security Unit of the Bank (via e-mail of the Bank or in another way) with a request to provide information about the Customer/Collateral provider/Mortgage provider, their available assets, bank accounts, information about the founders, and also another information necessary for debt collection process.

Within 3 (three) days Security Unit of the Bank provides an answer to the received request, and as far as possible – copies of appropriate documents.

Besides, if additional information is necessary to be obtained (abstracts from the State Registers, etc.),  Distressed Assets Recovery Unit can apply with requests to official persons and bodies authorized to provide such information in order established by the current legislation.

Measures which can be taken by the state executive service during enforcement by writs of execution

During enforced measures oriented towards satisfying the Bank’s claims, representatives of the state executive service can conduct the actions which are under control of Distressed Assets Recovery Unit in order to prevent violations and protect the Bank’s interests.

Postponement of the executive actions

If there are circumstances obstructing executive actions or untimely receiving documents regarding court enforcement action by the parties, in the result of which they were deprived to use rights granted for them, the state executor can postpone executive actions in virtue of the Bank’s or the Customer’s application, or at own initiative for 10 (ten) days.

Having eliminated the mentioned obstacles, legal action will be continued.

Delay in execution

If there are circumstances complicating to fulfill the decision or make it impossible, the state executor at own initiative or under the parties’ application and also the parties have a right to apply to the court which issued a writ of execution with an application on delay in execution and on establishment or change of fulfillment way and order.

Cease of court enforcement action

In cases stipulated by the Law, court enforcement action is to be stopped. These cases are:

  1. when the party-legal entity ceases to exist if legal relations admit legal succession;
  2. debt collection ceased by the Bank in virtue of a writ of execution;
  3. claim admitted by the court for consideration against the actions of bodies (official persons) authorized to consider the claims concerning administrative violations;
  4. cease of fulfilling appropriate decision or court enforcement action by an official person to whom this right was granted by the law;
  5. submission of claim to the court on exclusion of the property from seizure and  inventory act;
  6. initiation of bankruptcy proceedings of the Customer by the economic court, if according to the law, at the Bank’s demand, moratorium action is spread being introduced by the economic court except cases, when court enforcement action is on stage of funds distribution collected from the debtor    (including funds received from selling of the customer’s property);
  7. cassation introduced by a public prosecutor for the court decision;
  8. delay in fulfilling decision provided by the court which issued a writ of execution;
  9. availability of the Customer’s funds on deposit and other accounts, from which the Customer can’t require withdrawal or writing off funds before expiring of a certain period if the last mentioned doesn’t have a property which can be repossessed;

 

The state executor is granted a right to cease court enforcement action in the next cases:

  1. appeal of the state executor to the court, which issued a writ of execution, with an application on explanation of the decision to be fulfilled, delay in fulfillment and also on establishment or changed of fulfillment order and way;
  2. acceptance of the claim against the actions of the state executor or refusal;
  3. expert examination.

Ceased court enforcement action is to be continued after elimination of obstacles resulted in its cease.  Decision on continuation of court enforcement action is formalized by a resolution.

Termination of court enforcement action

The current legislation stipulates cases of termination of court enforcement action. Thus, court enforcement action is to be terminated in the following cases:

  1. acknowledgment of the Bank’s refusal regarding enforceable fulfillment of the court decision;
  2. acknowledgment of amicable settlement by the court concerning termination of court enforcement action between the Bank and the Customer;
  3. liquidation of a legal entity-party of court enforcement action if fulfillment of obligations or requirements in court enforcement action doesn’t admit legal succession;
  4. cancellation of the court’s or other body’s (official person) decision that had to be fulfilled in virtue of a writ of execution or acknowledgment of a writ of document by the court as that one which is not liable to fulfillment;
  5. written refusal of the Bank concerning assets repossessed from the Customer while fulfilling decision on their transfer to the Bank or destruction of a thing that should have been transferred to the Bank;
  6. term expiration for this type of collection, stipulated by the law;
  7. transfer of a writ of execution to liquidation commission if the debtor-legal entity is liquidated or to the arbitrary if the debtor is declared bankrupt;
  8. actual fulfillment of the decision according to a writ of execution;
  9. returning of a writ of document without fulfillment of it at the request of the court or other body (official person) issued this writ of document or at the written request of the Bank;
  10. sending of a writ of document to other department of the state executive service.

The state executor is to provide a resolution on termination of court enforcement action.

Terminated court enforcement action can not be started again, except cases stipulated by the Law.

Returning of a writ of execution

Writ of execution, accepted by the state executor to fulfill it, and which was not used for debt collection or partially used, is returned to the Bank:

  1. in virtue of the written application of the Bank;
  2. if the Customer doesn’t have a property to be repossessed, and if measures took by the state executor regarding searching such property were unsuccessful;
  3. if the Bank refused to take the Customer’s property in its ownership which was not sold while fulfilling the decision, obtain certain Customer’s assets which are to be transferred to the Bank according to the court decision;
  4. if the Bank obstructs court enforcement action or doesn’t provide down payment for executive actions to be conducted, if their down payment is stipulated by the Law, not taking into account the warning of the state executor regarding returning a writ of document to him;
  5. if in the result of actions conducted by the state executor it is impossible to find out a place of stay of the Customer-legal entity,
  6. if the Customer doesn’t have a property which is to be transferred to the Bank according to the writ of execution, or property defined by the writ of execution which is to be repossessed in order to repay a debt (except funds).

The state executor is to provide a resolution on returning a writ of execution and down payment of the Bank.

Even if a writ of document is returned to the Bank, it doesn’t lose the right to provide a writ of execution to be fulfilled. Exceptions are the cases stipulated by the Law. 

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