Accounts payable are, as a matter of fact, regular money, either virtual or potential. We call them “virtual” because prior to actual payment, this money is nothing but an item on a balance sheet. You cannot use them to buy anything, except for selling the debt, and even then, at a discount. Now why is it referred to as “potential”? This is explained by the fact that you can get the money in cash form only in the long run. If your debtor is unwilling to pay, you have to use your best efforts to turn the accounts payable into real funds.
There is a number of ways to make the debtor pay. In terms of legal methods, the most frequently used ones are pre-action mechanisms, mediation and, of course, legal enforcement procedure. However, one must kept in mind that pursuing a litigation is not always enough. You have to win the case and most likely in three court instances. Moreover, getting the final effective court judgement in your favor is not necessarily the finish line. If the debtor has no assets, the judgement may just remain to be a text on stamped paper. State enforcement officer will most likely say that it is impossible to enforce the court decision given the lack of debtor’s property, yet a competent attorney will still attempt to find a solution in such challenging situation.
I remember there was this case in our legal practice. Having won the trial on recovery of the loan amount, interest and inflation losses totaling about UAH 1 million, our attorneys discovered that the defendant had no official property to impose a court-enforced collection on. This could make anyone give up. But not us! A further in-depth investigation revealed some unexpected information. As it turned out, over the last 5 years, the defendant has changed her last name not less than three times. In addition, she owned a portion of real estate in Kyiv registered in her maiden name. Since these data were not entered into the Unified State Register of Title to Real Estate, it was impossible to obtain the said information using the ID number, anywhere else but from the Register of the Technical Inventory Bureau.
Such an advanced investigation has justified itself. Unwilling to lose the house, the defendant was eventually forced to wipe off the debt.
There are many similar examples. If you use all available means for recovery, the number of successfully-enforced court judgements can be increased significantly. For example, very few people check whether corporate debtor has any authorized capital, even though if this is a limited liability company, the founders are liable for the company’s debts to the extent of the unpaid part of the contribution. Also, for instance, by verification of the property status of individual debtor, the spouse of the latter is rarely subject to the same procedure, regardless of the fact that the property accumulated during marriage is joint and therefore can be used for debt recovery. The list goes on...
When it comes to debt recovery, Jusguard makes the best use of all available tools and mechanisms to make sure that the clients obtain not just an official court judgement, but get an actual satisfaction of their monetary claims.