How is the collection of debts from individual entrepreneurs - a description of the procedure and requirements

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Collecting debts is not always a pleasant procedure for both the borrower and the lender. This situation can happen between friends, relatives and acquaintances, and sometimes there is a need to get back funds from individual entrepreneurs and organizations.

Debt collection from an individual entrepreneur is somewhat different from the procedure between individuals, as well as from a lawsuit against an entire company. In this article, we will consider the features of the procedure, as well as some tricks that will help protect yourself from fraud by the borrower.

What is IP?

In order to understand what is the peculiarity of debt collection from individual entrepreneurs, it is necessary to understand the concept itself. In judicial proceedings, a claim can be directed both to individuals and legal entities. An individual is any person from our environment, a citizen who has his own rights and obligations. A legal entity is an organization that carries out certain activities in the economic market. And to whom canattributed to a sole trader?

An individual entrepreneur also conducts economic activities, he registered his activities with the regulatory authorities and received the right to carry out commercial operations. At the same time, he still refers to individuals, since he can make his decisions quickly and independently, and is responsible for his obligations with all his property, unlike legal entities.

Debt collection from an individual entrepreneur is a process in which you contact a specific specific person, and not with the whole company and its numerous representatives.

How to resolve the dispute peacefully?

All disputes are more rationally resolved peacefully. Litigation always requires money, time and nerves. Sometimes it drags on so much that the creditor manages to forget about the debt, and the amount simply depreciates.

If the borrower agrees to negotiate before the court, it is better to really start with them. It is reasonable sometimes even to compromise and provide an additional delay than to start the mechanism of the court. All this depends on the type of the borrower, his character, the so-called "portrait". If he really always returned his debts, was responsible, got in touch, explained the reason for the delay, then peace negotiations would be appropriate.

After you come to a decision that suits both parties, do not forget to fix it on paper. If you are faced with a scammer, you still have to find a good lawyer. In any case, don't sit backhands and silently wait for the return of money. Debt collection from individual entrepreneurs must begin even before filing an application with the court.

Procedure for debt collection

Negotiations reached an impasse, no one answers your calls, there was no money from the debtor, and no - what to do? How to collect a debt from an individual entrepreneur?

First of all, write a written claim demanding the return of the debt. Send it to the address of the entrepreneur, to the work office, to any place where he can receive it. Keep a copy of the claim with you, send the letter with delivery notification, so that you know for sure that the defendant received it.

If reputation in the media is important to an entrepreneur, file a complaint there as well. Many entrepreneurs are not happy about this kind of information being leaked to potential customers.

In some situations, it is possible to win over larger business partners. If the work of the debtor depends on a company, it makes sense to send an information letter to its management.

If the measures taken did not have any effect, apply to the arbitration court. With it, you can recover the amount of the debt, the pen alty, compensation for losses and expenses for paying fees and services of a lawyer.

It is necessary to correctly draw up a statement of claim for the recovery of the IP debt, as well as attach all the evidence relevant to the case. You must also attach your letters demanding the return of funds that were sent to the defendant.

Initiation of IP bankruptcy

A positive outcome of a trial does not always mean a refund. The fact is that bailiffs often refer to employment, debt collection from individual entrepreneurs under a writ of execution has to be carried out by the plaintiff on their own.

If the debt is not repaid within three months, the creditor has the right to file a new claim. Only in this case, a petition for bankruptcy of the individual entrepreneur is already filed. This action is beneficial only if the debtor has valuable property, as a result of the sale of which debts on obligations will be returned.

The application is submitted to the arbitration court at the place of residence of the defendant. If the claim is successful, the defendant sells off all of his assets and possessions except for his only apartment and some inexpensive household items.

The bankruptcy procedure involves multiple creditors. After the completion of the procedure, an individual becomes "clean" before the law and according to his obligations, even if all his property was not enough to pay off debts. After that, it is impossible to submit claims for the return of the debt.

Debt collection from an individual entrepreneur who has ceased operations

The market is a changeable structure. New organizations are opened, others cannot continue their activities and are closed. It happens that an individual entrepreneur curtailed economic activity, properly executed the documents and went to worksomewhere in the factory. What if he was in debt? What will become of his debt?

Collection of debt from a former individual entrepreneur is no different from the standard procedure. All his debts and loans have not disappeared, he is still obliged to pay them. This means that you need to write a letter demanding repayment of the debt and, if this does not work, then go to court at the place of residence of the defendant.

What do you need to know?

How is the collection of debts from individual entrepreneurs, even from those who have already ceased economic activity, was discussed in the previous paragraphs. What to do if the entrepreneur not only closed the activity, but also began the bankruptcy procedure? The creditor must have time to enter a special list of persons to whom the entrepreneur owes. It's called a registry. If no measures were taken by the creditor before the end of the bankruptcy procedure, he will not be able to collect the debt in the future.

What to watch out for?

Even in a normal everyday environment, scammers come across almost on every corner. In the economic sphere, this is even more common: fly-by-night firms, fake charitable foundations, illegal entrepreneurship and more.

When starting a business as an individual entrepreneur, many people sell or transfer their property to friends and relatives in advance.

Before you give someone a loan, make sure that he has something to pay off in caseneed. If, after the court decision on debt recovery, the defendant has no personal property, official earnings or assets, the sale of which can satisfy obligations, then your funds will simply have nothing to return according to the law.

How to deal with fraud?

If your debtor announced the beginning of bankruptcy proceedings, while in the process of activity his property was sold at a dubious value or to organizations that raise suspicions of the legality of the activity, you can try to challenge the transactions and declare them invalid.

Deals between relatives and dubious organizations are disputed if they were carried out 3 months before the start of bankruptcy proceedings. In this case, the transferred property is confiscated and distributed among the creditors included in the register.

If an entrepreneur-debtor caused significant losses to his creditors, carried out fraud with the withdrawal of assets and other illegal activities, he can be held liable under articles 195, 196, 197 of the Criminal Code of the Russian Federation.